In a classified balance sheet, assets are usually classified as:

current assets; long-term investments; PPE; intangibles

Paying an account payable with cash affects the accounting equation in the following way:

Decreases assets and decreases liabilities.

Generally accepted accounting principles are:

standards and rules that are recognized as a general guide

The correct order in a classified balance sheet for the following current assets is

cash, accounts receivable, inventory, prepaid insurance

•Net income will result during a time period when:

Revenues are greater than expenses

The effects on the basic accounting equation of performing services for cash are to:

increase assets and increase stockholders' equity.

A corporation's annual report that describes the corporation's accounting methods:

management discussion and analysis.

•Which is an advantage of corporations relative to partnerships and sole proprietorships?

Reduced Legal Liability for Investors

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Accounting 211 Team Cram Session

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Final Exam Cram Session

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Questions 20

Answers

1
In a classified balance sheet, assets are usually classified as:
current assets; long-term; tangible assets; Short Assets
current assets; long-term investments; PPE; common stock.
current assets; long-term assets; PPE; intangible assets.
current assets; long-term investments; PPE; intangibles
2
Paying an account payable with cash affects the accounting equation in the following way:
Decreases assets and decreases liabilities.
Decreases assets and increases stockholders' equity.
Increases assets and decreases liabilities.
Decreases stockholders' equity and decreases liabilities.
3
Generally accepted accounting principles are:
standards and rules that are recognized as a general guide
usually established by the Internal Revenue Service.
fundamental truths derived from the laws of nature
the guidelines used to resolve ethical dilemmas.
4
The balance in retained earnings is not affected by:
issuance of common stock.
dividends.
net income.
net loss.
5
Current assets are listed in order of:
longevity
alphabetically
Liquidity
by importance
6
presents an opinion fairness, presentation, and financial position and results of operations:
balance sheet.
Income statement.
comparative statements.
auditor's opinion.
7
Which of these measures is an evaluation of a company's ability to pay current liabilities?
A and B
None of the above
Earnings Per Share
Current Ratio
8
The correct order in a classified balance sheet for the following current assets is
cash, inventory, accounts receivable, prepaid insurance
cash, accounts receivable, inventory, prepaid insurance
inventory, cash, accounts receivable, prepaid insurance
accounts receivable, cash, prepaid insurance, inventory
9
•Which is not one of the three forms of business organization?
Sole Proprietorship
Partnership
Creditorship
Corporation
10
Stockholders' equity represents what?:
claims of employees.
claims of creditors.
the difference between revenues and expenses.
claims of owners.
11
•Which financial statement reports assets, liabilities, and stockholders' equity?
Retained Earnings Statement
Cash Flows Statement
Income Statement
Balance Sheet
12
•Which statement presents information as of a specific point in time?
The Income Statement
The awesome statement
The Point in Time Statement
The Balance Sheet
13
•Net income will result during a time period when:
Revenues are greater than expenses
Expenses are less than assets
Revenues are greater than assets
Revenues are greater than liabilities
14
The effects on the basic accounting equation of performing services for cash are to:
increase assets and increase liabilities.
increase liabilities and increase stockholders' equity.
increase assets and decrease stockholders' equity.
increase assets and increase stockholders' equity.
15
A corporation's annual report that describes the corporation's accounting methods:
management discussion and analysis.
auditor's report.
income statement.
notes to the financial statements.
16
Which is an indicator of profitability?
Free Cash Flow
Debt to Assets
Current Ratio
Earnings Per Share
17
•Which is an advantage of corporations relative to partnerships and sole proprietorships?
Harder to Transfer Ownership
Reduced Legal Liability for Investors
Lower Taxes
Most Common form of organization
18
characteristic of information that evaluates whether it is large enough to impact a decision.
Comparability
Cost
Consistency
Materiality
19
•Which of the following events is not recorded in the accounting records?
An employee is terminated.
A cash investment is made into the business.
Company pays dividend to stockholders.
Equipment is purchased on account.
20
•Genesis Company buys a $900 machine on credit. This transaction will affect the:
balance sheet only.
income statement, RE statement, and balance sheet.
income statement and retained earnings statement only.
income statement only.

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