Introductory to Financial Accounting - Chap 1 - additional

Which financial statement would you use to determine a company's earnings performance during an accounting period?

• Balance sheet

• Statement of stockholders' equity

• Income statement

• Statement of cash flows

Which of the following is considered to be an expense on the income statement?

• Accounts payable

• Notes payable

• Wages payable

• Cost of goods sold

Which of the following accounts is not a liability on the balance sheet?

• Retained earnings.

• Notes payable.

• Accounts payable.

• Interest payable.

Which of the following accounts would not be reported on the balance sheet?

• Retained earnings.

• Inventory.

• Accounts payable.

• Dividends.

Which of the following correctly describes the various financial statements?

• An income statement covers a period of time.

• The cash flow statement is a financial statement at a specific point in time.

• The balance sheet is a financial statement that covers a period of time.

• The statement of stockholders' equity is a financial statement at a specific point in time.

Which financial statement would you utilize to determine whether a company will be able to pay liabilities which are due in 30 days?

• Income statement

• Balance sheet

• Statement of stockholders' equity

• Statement of cash flows

Which of the following would not be found on the statement of cash flows?

• Cost flow from manufacturing activities.

• Cash flow from operating activities.

• Cash flow from investing activities.

• Cash flow from financing activities.

Which of the following statements is correct?

• Assets on the balance sheet include retained earnings.

• Retained earnings includes common stock.

• The balance sheet equation states that assets equal liabilities.

• A corporation's net income does not necessarily equal its net cash flow from operations.

Which of the following describes the primary objective of the balance sheet?

• To measure the net income of a business up to a particular point in time.

• To report the difference between cash inflows and cash outflows for the period.

• To report the financial position of the reporting entity at a particular point in time.

• To report the market value of assets, liabilities, and stockholders' equity at a particular point in time.

Willie Company's retained earnings decreased $20,000 during the current year. What was Willie's current year net income or loss given that Willie declared $25,000 of dividends during this year?

• Net income was $5,000

• Net income was $45,000

• Net loss was $45,000

• Net loss was $5,000