Multiple Choice Questions
1. If a publicly traded company is trying to maximize its perceived value to decision makers external to the corporation, the company is most likely to understate which of the following on its balance sheet?
c. Retained Earnings
d. Contributed Capital
2. Which of the following is not an asset?
c. Prepaid Expense
d. Contributed Capital
3. Total liabilities on a balance sheet at the end of the year are $40,000, retained earnings at the end of the year are $30,000, net income for the year is $10,000, and contributed capital is $25,000. What amount of total assets would be reported on the balance sheet at the end of the year?
4. The dual effects concept can best be described as follows:
a. When one records a transaction in the accounting system, at least two effects on the basic accounting equation will result.
b. When an exchange takes place between two parties, both parties must record the transaction.
c. When a transaction is recorded, both the balance sheet and the income statement must be impacted.
d. When a transaction is recorded, one account will always increase and one account will always decrease.
5. The T-account is a tool commonly used for analyzing which of the following?
a. Increases and decreases to a single account in the accounting system.
b. Debits and credits to a single account in the accounting system.
c. Changes in specific account balances over a time period.
d. All of the above describe how T-accounts are used by accountants.
6. Which of the following describes how assets are listed on the balance sheet?
a. In alphabetical order
b. In order of magnitude, lowest value to highest value
c. From most liquid to least liquid
d. From least liquid to most liquid
7. The Cash T-account has a beginning balance of $12,000. During the year, $78,000 was debited and $85,000 was credited to the account. What is the ending balance of Cash?
a. $ 5,000
c. $ 7,000
d. Cannot determine the ending balance from the information given.
8. How many of the following statements are true regarding the balance sheet?
One cannot determine the true fair market value of a company by reviewing its balance sheet.
Certain internally generated assets, such as a trademark, are not reported on a company's balance sheet.
A balance sheet shows only the ending balances, in a summarized format, of all balance sheet accounts in the accounting system as of a particular date.
9. At the end of a recent year, Apple Inc. reported an average total assets amount of $21,276 million, average total liabilities of $9,018 million, and average stockholders' equity of $12,258 million.
What is its financial leverage ratio and what does it suggest about the company?
a. The ratio of .74 suggests that Apple finances its assets primarily with debt.
b. The ratio of 1.74 suggests that Apple finances its assets primarily with stockholders' equity.
c. The ratio of .74 suggests that Apple finances its assets primarily with stockholders' equity.
d. The ratio of 1.74 suggests that Apple finances its assets primarily with debt.
10. Which of the following is not a financing activity on the statement of cash flows?
a. When the company lends money.
b. When the company borrows money.
c. When the company pays dividends.
d. When the company issues stock to shareholders.
This question was answered on: Jul 11, 2017
Need a similar solution fast, written anew from scratch? Place your own custom order
We have top-notch tutors who can help you with your essay at a reasonable cost and then you can simply use that essay as a template to build your own arguments. This we believe is a better way of understanding a problem and makes use of the efficiency of time of the student. New solution orders are original solutions and precise to your writing instruction requirements. Place a New Order using the button below.