Test bank for financial ACCT asia pacific 1st edition

Statement of financial position for the Year Ended 30 June 2013 2.. Statement of comprehensive income for the Year Ended 30 June 2013 4.. Statement of changes in equity at 30 June 2013 W

Test Bank for Financial ACCT Asia Pacific 1st Edition

Which of the following statements is true regarding economic events?

1 a The signing of a service contract is an example of an external event that is recorded in the accounting records

2 b Every event which affects an entity can be identified from a source

document

3 c All internal and external events must be measured with sufficient reliability

4 d External events involve exchanges between an entity and another entity outside the company

Which of the following underlying assumptions of the conceptual framework

is the reason the dollar is used in the preparation of financial

The time period assumption is necessary because:

1 a inflation exists and causes confusing swings in financial statement

amounts over time

2 b business owners and interested parties want periodic measurements of thebusiness’s success or failure

3 c business owners and interested parties expect full disclosure of all

economic events throughout the entire time period

4 d it is required by the federal government

The going concern assumption is concerned with:

1 a the company's ability to continue operations long enough to carry out its existing obligations

2 b any information that is capable of influencing the decisions of anyone using the financial statements

3 c measuring ongoing business activities at their exchange price at the time

of the initial external transaction

4 d offsetting management's natural optimism by providing a prudent

approach to uncertainty in financial statement items

‘Revenues’ are best described as:

1 a a decrease in resources resulting from the sale of goods or the provision of services

2 b an increase in resources resulting from the sale of goods or the provision ofservices

3 c assets used or consumed in the sale of products or services

4 d an increase in the financing activities

‘Expenses’ are best described as:

1 a an increase in resources resulting from the sale of goods or the provision ofservices

2 b the amount of interest or claim that the owners have in the business

3 c the future economic resources of a business entity

4 d a decrease in resources resulting from the sale of goods or provision of services

Which statement demonstrates the financial success or failure of the

company over that specific period of time?

1 a The statement of cash flows

2 b The statement of changes in equity

3 c The statement of financial position

4 d The statement of comprehensive income

The resources used to generate revenues during a period are called:

1 a Statement of financial position for the Year Ended 30 June 2013

2 b Statement of comprehensive income at 30 June 2013

3 c Statement of comprehensive income for the Year Ended 30 June 2013

4 d Statement of changes in equity at 30 June 2013

Which of the following terms best describes a distribution of the profit of a company to its owners?

1 a Retained earnings

2 b Dividends

000 Accounts payable 200 000 Retained earnings ? Inventory 350 000 What is IPOD’s retained earnings balance at the end of the current year?

comprehensive income for Peck will report profit for the current year in the amount of:

1 a $ 45 000

is the first year of operations?

1 a $45 000

2 b $55 000

3 c $85 000

4 d Not enough information is provided

Ponzi Corporation reported the following information for the year ended 30 June 2013 Profit $100 000 Dividends 6 000 Retained earnings at 30 June 2013

$120 000 What was the balance of retained earnings at 1 July 2012?

2 b The dividend should be added to profit if the company's accounting

equation is in balance

3 c The dividend reduced total retained earnings

4 d The dividends must be paid whenever Ponzi Corp reports profit

You are a potential creditor and are concerned that a particular company you are ready to give a loan to might have too much debt Which financial

statement would provide you with the information needed to evaluate your concern?

1 a The statement of financial position

2 b The statement of comprehensive income

3 c The statement of changes in equity

4 d The statement of public accounting

Which financial statement would you refer to in order to determine how many resources (assets) the company owned?

1 a The statement of financial position

2 b The statement of changes in equity

3 c The statement of comprehensive income

4 d The statement of public accounting

Businesses engage in which of the following three main activity

categories?

1 a Financing, investing, operating

2 b Cash, credit, non-cash

3 c Financing, credit, operating

4 d Financing, management, operating

Which one of the following is not one of the three business activities?

1 a The statement of financial position

2 b The statement of changes in equity

3 c The statement of comprehensive income

4 d The statement of public accounting

Which one of the following financial statements shows the end of the year cash balance for a business entity?

1 a The statement of comprehensive income and the statement of changes in equity

2 b The statement of financial position and the statement of cash flows

3 c The statement of changes in equity and the statement of cash flows

4 d The statement of financial position and the statement of changes in equity

Which one of the following involves a liability for a business?

1 a An obligation to pay for goods purchased on credit from a supplier

2 b Inventories purchased for cash

3 c Amounts invested by the owners

4 d Shares sold to the general public

Which one of the following is a correct fundamental accounting equation?

1 a Assets + Liabilities = Equity

2 b Assets + Retained Earnings = Equity

3 c Assets + Equity = Liabilities

4 d Assets = Liabilities + Equity

How is the statement of financial position linked to the other financial

3 c Retained earnings are reported on the statement of financial position

4 d There is no link between the statement of financial position and other statements, as each contains different accounts and provides different

information

On 1 July 2012, Blackstone Company reported assets of $1 000 000 and

liabilities of $600 000 During 2013 assets decreased by $200 000 and equity decreased $250 000 What is the amount of equity at 30 June 2013?

1 a $650 000

2 b $150 000

3 c $400 000

4 d $800 000

Which of the following best describes the term ‘retained earnings’?

1 a The amount of total profits earned by a company since it began operations

2 b The amount of claim that the owners have on the assets of the company

3 c The future economic resources of a company

4 d The accumulated profit of a company that has not been distributed to owners in the form of dividends

Which one of the following items appears on a statement of financial

Which of the following invests funds into a business and is considered an owner?

1 a The statement of financial position

2 b The statement of changes in equity

3 c The statement of comprehensive income

4 d Both the statement of comprehensive income and the statement of

financial position

Bailout Corp reported the following information for the year ended 30 June

2013 Revenues $2 500 000 Expenses 2 000 000 Retained earnings at 30 June

2012 100 000 Retained earnings at 30 June 2013 450 000 How much was paid out in dividends in 2013?

1 a $500 000

2 b $150 000

3 c $350 000

4 d $250 000

Jetson Corp reported the following information for the year ended 30 June

2013 Revenue $14 000 000 Expenses 11 500 000 Dividends 1 000 000

Retained earnings at 30 June 2013 1 750 000 What was the retained earnings balance at 30 June, 2012?

1 a $ 250 000

2 b $2 500 000

3 c $1 500 000

4 d $ 350 000

On 1 July 2012, Money Company's balance in retained earnings was $10 000

000 At the end of the year, 30 June 2013, the balance in retained earnings was $9 400 000 During 2013, the company earned profit of $440 000 How much were dividends?

1 a $150 000

2 b $250 000

3 c $300 000

4 d $350 000

Which of the following statements is true regarding economic events?

1 a The signing of a service contract is an example of an external event that is recorded in the accounting records

2 b Every event which affects an entity can be identified from a source

document

3 c All internal and external events must be measured with sufficient reliability

4 d External events involve exchanges between an entity and another entity outside the company

Which of the following underlying assumptions of the conceptual framework

is the reason the dollar is used in the preparation of financial

The time period assumption is necessary because:

1 a inflation exists and causes confusing swings in financial statement

amounts over time

2 b business owners and interested parties want periodic measurements of thebusiness’s success or failure

3 c business owners and interested parties expect full disclosure of all

economic events throughout the entire time period

4 d it is required by the federal government

The going concern assumption is concerned with:

1 a the company's ability to continue operations long enough to carry out its existing obligations

2 b any information that is capable of influencing the decisions of anyone using the financial statements

3 c measuring ongoing business activities at their exchange price at the time

of the initial external transaction

4 d offsetting management's natural optimism by providing a prudent

approach to uncertainty in financial statement items

‘Revenues’ are best described as:

1 a a decrease in resources resulting from the sale of goods or the provision of services

2 b an increase in resources resulting from the sale of goods or the provision ofservices

3 c assets used or consumed in the sale of products or services

4 d an increase in the financing activities

‘Expenses’ are best described as:

1 a an increase in resources resulting from the sale of goods or the provision ofservices

2 b the amount of interest or claim that the owners have in the business

3 c the future economic resources of a business entity

4 d a decrease in resources resulting from the sale of goods or provision of services

Which statement demonstrates the financial success or failure of the

company over that specific period of time?

1 a The statement of cash flows

2 b The statement of changes in equity

3 c The statement of financial position

4 d The statement of comprehensive income

The resources used to generate revenues during a period are called:

2 b Statement of comprehensive income at 30 June 2013

3 c Statement of comprehensive income for the Year Ended 30 June 2013

4 d Statement of changes in equity at 30 June 2013

Which of the following terms best describes a distribution of the profit of a company to its owners?

000 Accounts payable 200 000 Retained earnings ? Inventory 350 000 What is IPOD’s retained earnings balance at the end of the current year?

1 a $100 000

comprehensive income for Peck will report profit for the current year in the amount of:

is the first year of operations?

Ponzi Corporation reported the following information for the year ended 30 June 2013 Profit $100 000 Dividends 6 000 Retained earnings at 30 June 2013

$120 000 What was the balance of retained earnings at 1 July 2012?

1 a The dividend reduced profit for 2013

2 b The dividend should be added to profit if the company's accounting

equation is in balance

3 c The dividend reduced total retained earnings

4 d The dividends must be paid whenever Ponzi Corp reports profit

You are a potential creditor and are concerned that a particular company you are ready to give a loan to might have too much debt Which financial

statement would provide you with the information needed to evaluate your concern?

1 a The statement of financial position

2 b The statement of comprehensive income

3 c The statement of changes in equity

4 d The statement of public accounting

Which financial statement would you refer to in order to determine how many resources (assets) the company owned?

1 a The statement of financial position

2 b The statement of changes in equity

3 c The statement of comprehensive income

4 d The statement of public accounting

Businesses engage in which of the following three main activity

categories?

1 a Financing, investing, operating

2 b Cash, credit, non-cash

3 c Financing, credit, operating

4 d Financing, management, operating

Which one of the following is not one of the three business activities?

1 a The statement of financial position

2 b The statement of changes in equity

3 c The statement of comprehensive income

4 d The statement of public accounting

Which one of the following financial statements shows the end of the year cash balance for a business entity?

1 a The statement of comprehensive income and the statement of changes in equity

2 b The statement of financial position and the statement of cash flows

3 c The statement of changes in equity and the statement of cash flows

4 d The statement of financial position and the statement of changes in equity

Which one of the following involves a liability for a business?

1 a An obligation to pay for goods purchased on credit from a supplier

2 b Inventories purchased for cash

3 c Amounts invested by the owners

4 d Shares sold to the general public

Which one of the following is a correct fundamental accounting equation?

1 a Assets + Liabilities = Equity

2 b Assets + Retained Earnings = Equity

3 c Assets + Equity = Liabilities

4 d Assets = Liabilities + Equity

How is the statement of financial position linked to the other financial

3 c Retained earnings are reported on the statement of financial position

4 d There is no link between the statement of financial position and other statements, as each contains different accounts and provides different

information

On 1 July 2012, Blackstone Company reported assets of $1 000 000 and

liabilities of $600 000 During 2013 assets decreased by $200 000 and equity decreased $250 000 What is the amount of equity at 30 June 2013?

1 a $650 000

2 b $150 000

3 c $400 000

4 d $800 000

Which of the following best describes the term ‘retained earnings’?

1 a The amount of total profits earned by a company since it began operations

2 b The amount of claim that the owners have on the assets of the company

3 c The future economic resources of a company

4 d The accumulated profit of a company that has not been distributed to owners in the form of dividends

Which one of the following items appears on a statement of financial

2 b The statement of changes in equity

3 c The statement of comprehensive income

4 d Both the statement of comprehensive income and the statement of

financial position

Bailout Corp reported the following information for the year ended 30 June

2013 Revenues $2 500 000 Expenses 2 000 000 Retained earnings at 30 June

2012 100 000 Retained earnings at 30 June 2013 450 000 How much was paid out in dividends in 2013?

1 a $500 000

2 b $150 000

3 c $350 000

4 d $250 000

Jetson Corp reported the following information for the year ended 30 June

2013 Revenue $14 000 000 Expenses 11 500 000 Dividends 1 000 000

Retained earnings at 30 June 2013 1 750 000 What was the retained earnings balance at 30 June, 2012?

1 a $ 250 000

2 b $2 500 000

3 c $1 500 000

4 d $ 350 000

On 1 July 2012, Money Company's balance in retained earnings was $10 000

000 At the end of the year, 30 June 2013, the balance in retained earnings was $9 400 000 During 2013, the company earned profit of $440 000 How much were dividends?

1 a $1 040 000