31.Which one of the following statements is true?
a.A company’s own stock is its most liquid asset.
b.Profits are normally kept in a company’s retained earnings until distributed as dividends.
c.Long-term investments will be used to pay current liabilities.
d.Current assets have no physical substance.
32.Cash reported on a company’s balance sheet represents
a.the profit a company made during the current year.
b.the amount the President of the Company has in his or her personal account.
c.the amount collected from customers during the current year less the amount paid for expenses.
d.the currency a company has access to at the balance sheet date.
33.The amount a company expects to collect from its customers is:
a.accounts receivable.
b.short-term equity securities.
c.inventory.
d.accounts payable.
34.As used in accounting, “notes” may be reported:
a.only as company debt offerings.
b.only as assets on the balance sheet.
c.as either assets or liabilities.
d.on the income statement or the balance sheet.
35.Property, plant and equipment may include which of the following?
a.Intangible assets and land.
b.Inventory and equipment.
c.Buildings and cash.
d.Land and office buildings.
36.On the balance sheet, a company should report the cost of intangible assets:
a.in the current assets section.
b.as an amount owed to shareholders.
c.as an amount that is estimated by the CFO.
d.at acquired cost less any accumulated amortization.
37.A partnershipand a corporation differ in that:
a.a partnershipis a legal entity, while a corporation is not.
b.the equity sectionsof partnership and corporation balance sheets report different items.
c.partnerships always have more cash than corporations.
d.a corporation has an income statement and a partnership does not.
38.Below are several accounts from Norel Company’s accounting records.
Total assets, end of year $100,000
Total liabilities, end of year 36,000
Contributed capital, end of year 12,000
Retained earnings, beginning of year18,000
Dividends for the period 31,000
Net income65,000
The amount of retained earnings at the end of the year is:
a.$34,000.
b.$40,000.
c.$52,000.
d.$64,000.
39.The most common revenue account is:
a.cash.
b.sales.
c.shareholders’ equity.
d.liabilities.
40.Your bank loaned ten million dollars to Hamilton Stores to finance the construction of a manufacturing plant. In which section of Hamilton’s statement of cash flows would you be able to determine whether the company used the cash to build the new plant?
a.Operating activities
b.Owner activities
c.Financing activities
d.Investing activities