3A Midterm Questions

Which of the following is not an external user of financial information?

• Company Management

• IRS

• Stockholders

• Creditors

An organization that provides a loan to a business entity and expects repayment of the funds is referred to as a(n):

• partner

• stockholder

• owner

• creditor

Which of the following is not one of the three activities included in the definition of accounting?

• communicating

• operating

• identifying

• measuring

Which of the following financial statements reports an entity's financial position as of a specific date?

• balance sheet

• income statement

• statement of Retained Earnings

• All the above

Which of the following is a correct expression of one of the three basic financial statement model?

• A-L=Net Income

• A-L=E

• Revs+Expenses=Net Income

• Beg. RE + NI+ Dividends = Ending RE

If a company has assets of $350,000, liabilities of $130,000, and retained earnings of $180,000, investments by the stockholders must be...

• 220k

• 295k

• 310k

• 40k

Which of the following is the reason the dollar is used in the preparation of financial statements?

• Monetary Unit

• Going concern

• Time Period

• Legal Entity

Which of the following statements is true concerning assets?

• Assets are recorded at cost and adjusted for inflation

• Assets are recorded at Fair Value as historical cost in arbitrary

• Accounting principles require that companies report assets on the Income Statement

• Assets are measured at historical cost

Neill and Associates purchased land for $1,200,000 in 1982. In 2004, the land was appraised at $1,795,000. The land would appear on the company's books in 2004 at

• 595k

• 2.995 M

• 1.795 M

• 1.2 M

The qualitative characteristics of accounting information do not include...

• relevance

• reliability

• comparability

• favorability