Accounting > TEST BANK > BU 127 ACCOUNTING TESTBANK (580 PAGES) Questions With Answers Latest(VERSION) UPDATE 2020/2021 (All)

BU 127 ACCOUNTING TESTBANK (580 PAGES) Questions With Answers Latest(VERSION) UPDATE 2020/2021

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BU 127 ACCOUNTING TESTBANK (580 PAGES) Questions With Answers Latest(VERSION) UPDATE 2020/2021 1) What is the primary purpose of the statement of financial position? A) To measure the profit of a bu... siness up to a particular point in time. B) To report assets at their current market value at a particular point in time. C) To report the financial position of the reporting entity at a particular point in time. D) To report the difference between cash inflows and cash outflows for the period. Answer: C 2) On January 1, 20X1, two individuals invested $150,000 each to form Hornbeck Corporation. Hornbeck had total revenues of $15,000 during 20X1 and $40,000 during 20X2. Total expenses for the same periods were $8,000 and $22,000, respectively. Cash dividends paid out to shareholders totaled $6,000 in 20X1 and $12,000 in 20X2. What was the ending balance in Hornbeck's retained earnings account at the end of 20X1 and 20X2? A) $1,000 and $6,000 respectively. B) $7,000 and $19,000 respectively. C) $1,000 and $7,000, respectively. D) $301,000 and $306,000 respectively. Answer: C 3) The BAT Corporation had revenues of $110,000, expenses of $85,000, and an income tax rate of 20 percent in 20X2. What would profit after taxes be? A) $25,000. B) $15,000. C) $5,000. D) $20,000. Answer: D 4) Brown Corporation reported the following amounts at the end of the first year of operations, December 31, 20X1: Share capital $20,000; Sales revenue $95,000; Total assets $85,000, No dividends, and Total liabilities $35,000. What would shareholders' equity and total expenses be? A) Shareholders' equity, $80,000 and expenses $40,000. B) Shareholders' equity, $80,000 and expenses $85,000. C) Shareholders' equity, $50,000 and expenses $65,000. D) Shareholders' equity, $60,000 and expenses $75,000. Answer: C 5) Which of the following would not be considered an internal user of accounting data? A) A creditor of a company. B) The controller of a company. C) A salesperson of a company. D) The president of a company. Answer: A 6) If total liabilities increased by $25,000 and shareholders' equity increased by $5,000 during a period, then total assets must change by what amount and direction during that same period? A) $20,000 decrease. B) $25,000 increase. C) $30,000 increase. D) $20,000 increase. Answer: C 7) Which of the following activities involves raising the necessary funds to support the business? A) Operating. B) Marketing. C) Financing. D) Investing. Answer: C 2 8) Buying assets needed to operate a business is an example of a(n) A) purchasing activity. B) investing activity. C) operating activity. D) financing activity. Answer: B 9) The common characteristic possessed by all assets is A) tangible nature. B) long life. C) great monetary value. D) future economic benefit. Answer: D 10) Expenses are incurred A) to generate revenues. B) to produce assets. C) to produce liabilities. D) only on rare occasions. Answer: A 11) The financial statement that summarizes the changes in contributed capital and retained earnings for a specific period of time is the A) statement of earnings. B) statement of changes in equity. C) statement of cash flows. D) statement of financial position. Answer: B 12) Retained earnings at........................................................CONTINUED [Show More]

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