QUIZ 1
1. Which of the following is the most appropriate and modern definition of accounting?
A. The interconnected network of subsystems necessary to operate a business.
B. The information system that identifies, records, and communicates the economic events of an organization to interested users.
C. A means of collecting information.
D. Electronic collection, organization, and communication of vast amounts of information.
2. Which of the following external groups uses accounting information to determine whether the company can pay its obligations?
A. Marketing managers
B. Investors in common stock
C. Chief Financial Officer
D. Creditors
3. Which of the following groups uses accounting information to determine whether the company’s net income will result in a stock price increase?
A. Marketing managers
B. Chief Financial Officer
C. Investors in common stock
D. Creditors
4. Wildhorse Co. began the year by issuing $107000 of common stock for cash. The company recorded revenues of $1177000, expenses of $963000, and paid dividends of $72000. What was Wildhorse’s net income for the year?
A. $321000
B. $142000
C. $214000
D. $249000
5. If total liabilities decreased by $69000 and stockholders’ equity increased by $10000 during a period of time, then total assets must change by what amount and direction during that same period?
A. $69000 increase
B. $59000 decrease
C. $59000 increase
D. $79000 increase
6. The balance sheet
A. reports the assets, liabilities, and stockholders’ equity at a specific date.
B. presents the revenues and expenses for a specific period of time.
C. summarizes the changes in retained earnings for a specific period of time.
D. reports the changes in assets, liabilities, and stockholders’ equity over a period of time.
7. In a classified balance sheet, assets are usually classified as
A. current assets; long-term assets; property, plant, and equipment; and intangible assets.
B. current assets; long-term investments; property, plant, and equipment; and common stocks.
C. current assets; long-term investments; tangible assets; and intangible assets.
D. current assets; long-term investments; property, plant, and equipment; and intangible assets.
8. Liabilities are generally classified on a balance sheet as
A. present liabilities and future liabilities.
B. small liabilities and large liabilities.
C. tangible liabilities and intangible liabilities.
D. current liabilities and long-term liabilities.
9. Use the following data to determine the total dollar amount of assets to be classified as current assets.
10. Use the following data to determine the total dollar amount of assets to be classified as property, plant, and equipment.
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