Multiple Choice Questions
1.Which one of the following events is an operating transaction?
a.Purchase of equipment
b.Payment for equipment rental
c.Purchase of land
d.Issuing bonds for cash
2.Which one of the following events is an operating transaction?
a.Payment of office supplies
b.Change in depreciation accounting principle
c.Purchase of another company for stock
d.Disposal of a business segment
3.On the income statement, the result of changing from double-declining-balance to straight-line depreciation is found in
a. operating revenues and expenses.
b. other revenues or expenses.
c. extraordinary gains or losses.
d. cumulative effects.
4.Financing transactions include
a.exchanges with shareholders.
b.revenues.
c.expenses.
d.most transactions that impact the income statement.
5.On the income statement, the loss of equipment caused by the eruption of a volcano in the Northeastern United States is found in
a. operating revenues and expenses.
b. extraordinary gains or losses.
c. disposal of a business segment.
d. other revenues or expenses.
6.Which one of the following events is
notan operating transaction related to a company’s primary activity?
a. Disposal of a business segment
b.Purchase of equipment
c.Payment for equipment maintenance
d. Purchase of inventory
7.All of the following are termed considered to be operating revenues or expenses that are usual and frequent
except
a. the sale of furniture by a furniture company.
b. interest expense related to financing with bonds.
c. depreciation expense on machinery.
d.delivery cost of goods .
8.Which one of the following is a nonoperating event that must be reported on the income statement?
a. Acquisition of a plant asset to be used in operations
b. Extraordinary items
c. Recognition of inventory expense
d. Consumption of office supplies
9.Non-operating items are found in the
a. asset section of the balance sheet.
b. liability section of the balance sheet.
c. cash flows from operations section of the cash flow statement.
d. income statement.
10.A summary of operating events is found
a. only in the asset section of the balance sheet.
b. only in the investment and financing sections of the cash flow statement.
c.only in the cash flows from operations section of the cash flow statement.
d.only in the income statement.
e.in the cash flows from operations section of the cash flow statement,
and
in the income statement.