151. Which of the following financial statements reports information as of a specific date?
A. income statement
B. retained earnings statement
C. statement of cash flows
D. balance sheet
152. Four financial statements are usually prepared for a business. The statement of cash flows is usually prepared last. The retained earnings statement (RE), the balance sheet (B), and the income statement (I) are prepared in a certain order to obtain information needed for the next statement. In what order are these three statements prepared?
A. I,RE, B
B. B, I, RE
C. RE, I, B
D. B,RE, I
153. Liabilities are reported on the
A. income statement
B. retained earnings statement
C. statement of cash flows
D. balance sheet
154. Cash investments made by stockholders in exchange for capital stock in a business are reported on the statement of cash flows in the
A. financing activities section
B. investing activities section
C. operating activities section
D. supplemental statement
155. The year-end balance of the retained earnings account appears in
A. both the retained earnings statement and the income statement
B. only the retained earnings statement
C. both the retained earnings statement and the balance sheet
D. both the retained earnings statement and the statement of cash flows
156. A financial statement user would determine if a company was profitable or not during a specific period of time by reviewing
A. the Income Statement.
B. the Balance Sheet.
C. the Statement of Cash Flows.
D. cannot be determined.
157. If stockholders want to know how money flowed into and out of the company, what financial statement would they use?
A. Income Statement
B. Statement of Cash Flows
C. Balance Sheet
D. None are correct.
158. The asset section of the Balance Sheet normally presents assets in
A. alphabetical order.
B. order of largest to smallest dollar amounts.
C. in the order what will be converted into cash.
D. no order.
159. The statement of cash flows is separately in three major sections. They are as follows:
A. Operating, Investing, and Financing
B. Revenues, Expenses, and Net Income
C. Assets, Liabilities, and Stockholders’ Equity
D. Capital Stock, Dividends, and Income
160. Which of the following is not a principle financial statement?
A. Income Statement
B. Statement of Resources Owned
C. Statement of Cash Flows
D. Balance Sheet
161. Countries outside the U.S. use financial accounting standards issued by the:
A. LLC
B. SEC
C. IASB
D. GAAP
162. All of the following statements regarding the ratio of liabilities to stockholders’ equity are true except:
A. A ratio of 1 indicates that liabilities equal stockholders’ equity.
B. Proprietorships can use this ratio but substitute total owner’s equity for total stockholders’ equity.
C. The higher this ratio is, the better able a business is to withstand poor business conditions and pay creditors.
D. The lower this ratio is, the better able a business is to withstand poor business conditions and pay creditors.
163. The unit of measure concept:
A. is only used in the financial statements of manufacturing companies.
B. is not important when applying the cost concept.
C. requires that different units be used for assets and liabilities.
D. requires that economic data be reported in yen in Japan or dollars in the U.S.
164. Give the major disadvantage of disregarding the cost concept and constantly revaluing assets based on appraisals and opinions.
165. On May 7, Carpet Barn Company offered to pay $95,000 for land that had a selling price of $110,000. On May 15, Carpet Barn accepted a counteroffer of $103,000. On June 5, the land was assessed at a value of $120,000 for property tax purposes. On December 10, Carpet Barn Company was offered $145,000 for the land by another company. At what value should the land be recorded in Carpet Barn Company’s records?
166. At the end of its accounting period, December 31, 2009, Miller’s Arcade has assets of $450,000 and liabilities of $125,000. Using the accounting equation, determine the following amounts:
a)
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Stockholder’s Equity as of December 31, 2009.
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b)
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Stockholder’s Equity as of December 31, 2010, assuming that assets increased by $65,000 and liabilities increased by $35,000 during 2010.
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