ACC561 ACC 561 WEEK 1 QUIZ

Question. 1. The proprietorship form of business organization
combines the records of the business with the personal records of the owner
generally receives favorable tax treatment relative to a corporation
is classified as a separate legal entity
must have at least two owners in most states
Question 2. 	Most business enterprises in the United States are
government units
proprietorships and partnerships
partnerships
corporations
Question 3. A business organized as a separate legal entity is a
corporation.
proprietor.
partnership.
government unit.
Question 4. Which of the following is the best definition of an internal user of accounting information?
Creditors like banks that use accounting information to evaluate the risk of lending money
Investors who use accounting information to decide whether to buy or sell stock
Labor unions who use accounting information to examine the ability of the company to pay increased wages and benefits.
Managers who use accounting information to plan, organize, and run a business.
Question 5. Which of the following groups uses accounting information primarily to insure the entity is operating within prescribed rules?
Taxing authorities
Regulatory agencies
Labor Unions
Management
Question 6. Which of the following groups uses accounting information to determine whether the company can pay its obligations?
Chief Financial Officer
Investors in common stock
Creditors
Marketing managers
Question 7. Which of the following financial statements is divided into major categories of operating, investing, and financing activities?
The balance sheet.
The income statement.
The retained earnings statement.
The statement of cash flows.
Question 8. Ending retained earnings for a period is equal to:
Beginning retained earnings + Net income - Dividends
Beginning retained earnings - Net income - Dividends
Beginning retained earnings - Net income + Dividends
Beginning retained earnings + Net income + Dividends
Question 9. The financial statement that summarizes the changes in retained earnings for a specific period of time is the
income statement.
balance sheet.
statement of cash flows.
retained earnings statement.
Question 10. To show how successfully your business performed during a period of time, you would report its revenues and expense in the
balance sheet.
retained earnings statement.
income statement.	
retained earnings statement.
statement of cash flows.
Question 11. Which financial statement is prepared first?
Balance sheet
statement of cash flows.
income statement.
Question 12. An income statement shows
assets, liabilities, and stockholders’ equity.
revenues, liabilities, and stockholders’ equity.
expenses, dividends, and stockholders’ equity.
revenues, expenses, and net income.
Question 13. Dawson Corporation has the following information available for 2011:
	(in millions)
Issued common stock	$45
Retired common stock	$65
Paid dividends	$75
Net income	$130
Beginning common stock balance	$575
Beginning retained earnings balance	$425

Based in this information, what is Dawson's Common Stock balance at the end of the year?
$555
$630
$685
$195
Question 14. Declaring a cash dividend will
increase retained earnings.
decrease retained earnings.
increase common stock.
decrease common stock.
Question 15. At December 31, 2012 Lowery Company had retained earnings of $2,184,000. During 2012 they issued stock for $98,000, and paid dividends of $34,000. Net income for 2012 was $402,000. The retained earnings balance at the beginning of 2012 was:
$2,454,000
$1,914,000
$2,552,000
$1,816,000
Question 16. Which of the following organizations issues accounting standards for countries outside the United States?
IASB
GAAP
FASB
SEC
Question 17. Generally accepted accounting principles
are accounting rules that are recognized as a general guide for financial reporting.
have eliminated all errors in accounting..
are sound in theory but rarely used in real life.
are accounting rules formulated by the Internal Revenue Service.
Question 18. The agency of the United States Government that oversees the U.S. financial markets is the
Security Exchange Commission
Internal Revenue Service
Financial Accounting Standards Board.
International Auditing Standards Committee.
Question 19. What organization issues U.S. accounting standards?
International Auditing Standards Committee.
Financial Accounting Standards Board.
Security Exchange Commission.
International Accounting Standards Committee.
Question 20. Two of the major characteristics that make accounting information useful are
Comparability and flexibility.
Relevance and Faithful representation.
Understandability and consistency.
Verifiability and timeliness.
Question 21. If accounting information has relevance, it is useful in making predictions about
the future events of a company.
new accounting principles.
future IRS audits.
foreign currency exchange rates.