ACC 561 WileyPLUS Assignment: Week 1 Practice Quiz

Multiple Choice Question 41

The proprietorship form of business organization

must have at least two owners in most states.

is classified as a separate legal entity.

generally receives favorable tax treatment relative to a corporation.

combines the records of the business with the personal records of the owner.

Multiple Choice Question 45

Most business enterprises in the United States are

government units.

proprietorships and partnerships.

corporations.

partnerships.

Multiple Choice Question 46

A business organized as a separate legal entity is a

partnership.

proprietor.

government unit.

corporation.

Multiple Choice Question 57

Which of the following is the best definition of an internal user of accounting information?

Managers who use accounting information to plan, organize, and run a business.

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.

Creditors like banks that use accounting information to evaluate the risk of lending money.

Multiple Choice Question 63

Which of the following groups uses accounting information primarily to insure the entity is operating within prescribed rules?

Labor Unions

Taxing authorities

Regulatory agencies

Management

Multiple Choice Question 65

Which of the following groups uses accounting information to determine whether the company can pay its obligations?

Investors in common stock

Marketing managers

Chief Financial Officer

Creditors

Multiple Choice Question 99

Which of the following financial statements is divided into major categories of operating, investing, and financing activities?

The balance sheet.

The statement of cash flows.

The retained earnings statement.

The income statement.

Multiple Choice Question 101

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

Multiple Choice Question 105

The financial statement that summarizes the changes in retained earnings for a specific period of time is the

income statement.

statement of cash flows.

balance sheet.

retained earnings statement.

Multiple Choice Question 106

To show how successfully your business performed during a period of time, you would report its revenues and expense in the

balance sheet.

income statement.

statement of cash flows.

retained earnings statement.

Multiple Choice Question 116

Which financial statement is prepared first?

Balance sheet

Retained earnings statement

Income statement

Statement of cash flows

Multiple Choice Question 117

An income statement shows

assets, liabilities, and stockholders’ equity.

revenues, liabilities, and stockholders’ equity.

revenues, expenses, and net income.

expenses, dividends, and stockholders’ equity.

Multiple Choice Question 103

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?

$195

$630

$555

$685

Multiple Choice Question 109

Declaring a cash dividend will

decrease retained earnings.

increase retained earnings.

decrease common stock.

increase common stock.

Multiple Choice Question 113

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:

$1,914,000

$2,552,000

$2,454,000

$1,816,000

Multiple Choice Question 158

Which of the following organizations issues accounting standards for countries outside the United States?

SEC

FASB

IASB

GAAP

Multiple Choice Question 159

Generally accepted accounting principles

are accounting rules that are recognized as a general guide for financial reporting.

are sound in theory but rarely used in real life.

are accounting rules formulated by the Internal Revenue Service.

have eliminated all errors in accounting.

Multiple Choice Question 160

The agency of the United States Government that oversees the U.S. financial markets is the

International Auditing Standards Committee.

Internal Revenue Service

Financial Accounting Standards Board.

Security Exchange Commission

Multiple Choice Question 161

What organization issues U.S. accounting standards?

Security Exchange Commission.

Financial Accounting Standards Board.

International Accounting Standards Committee.

International Auditing Standards Committee.

Multiple Choice Question 164

Two of the major characteristics that make accounting information useful are

Understandability and consistency.

Comparability and flexibility.

Relevance and Faithful representation.

Verifiability and timeliness.

Multiple Choice Question 171

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.

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Week 1 Practice Quiz : ACC 561 WileyPLUS Assignment