The primary objective of financial reporting is to provide information
Useful for making investment and credit decisions
About the profitability of the enterprise
To the federal government
On the cash flows of the company
Which type of business organization provides the least amount of protection for bankers and other creditors of the company?
Partnership
Proprietorship
Corporation
Both a and be
Assets are usually reported at their:
Historical cost
Current market value
Appraised value
None of the above
During March, assets increased by $19.000 and liabilities increased by $6000. Shareholders' equity must have:
Increased by $13 000
Decreased by $13 000
Increased by $25 000
Decreased by $25 000
The amount a company expects to collect from customers appears on the
Statement of cash flows
Balance sheet in the current assets section
Income statement in the expenses section
Balance sheet in the shareholders' equity section
All of the following are current assets except
Inventory
Sales revenue
Cash
Accounts receivable
Revenues are
Decreases in liabilities resulting from paying off loans
Increases in paid-in capital resulting from the owners investing in the business
Increases in retained earnings resulting from selling products or perfoming services
All of the above
The financial statement that reports revenues and expenses is called the
Income statement
Balance sheet
Statement of changes in equity
Another name for the balance sheet is the
Statement of financial position
Statement of operations
Statements of profit and loss
Statement of earnings
Rainbow Corporation began the year with cash of $32,000 and other assets that totalled $22,000. During the year Rainbow earned sales revenue of $133,000 and had the following expenses: salaries: $56,000; rent: $10,000; and utilities: $5,000. At year-end Rainbow’s cash balance
$62 000
$ 12 000
$20 000
$43 200
Advanced Instruments had retained earnings of $150,000 at December 31, 20X5. Net income for 20X6 totaled $120,000, and dividends for 20X6 were $20,000. How much retained earnings should Advanced Instruments report at December 31, 20X6?
$150 000
$ 250 000
$130 000
$290 000
Which of the following is not an enhancing qualitative characteristic?
Materiality
Understandiblity
Verifability
Comparability
. Cash paid to purchase a building appears on the statement of cash flows among the
Financing activities
Investing activities
Shareholders equity
Operating activities
The shareholders’ equity of Diakovsky Company at the beginning and end of 20X6 totaled $16,000 and $21,000, respectively. Assets at the beginning of 20X6 were $25,000. If Diakovsky Company’s liabilities increased by $8,000 in 20X6, how much were total assets at the end of 20X6? Use the accounting equation.
$ 41 000
$ 46 000
$ 35 000
$ 38 000
Answer
a
b
c
d
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