- The primary goal of the Income Statement is to report:
A. What a firm owns and what it owes at a point in time
B. The economic performance of a firm over a period of time
C. Transactions between a firm and its owners over a period of time
D. The change in a firm’s Cash account over a period of time
B. The economic performance of a firm over a period of time
- Which of the following statements about stock splits is true?
A. Stock splits reduce Retained Earnings
B. Stock splits require a journal entry
C. Stock splits do not affect total stockholders’ equity
D. Stock splits increase the company’s contributed capital
C. Stock splits do not affect total stockholders’ equity
- Which of the following events DOES NOT affect a company’s retained earnings account?
A. Issuing new shares of common stock
B. Reporting positive net income for the year
C. Declaring dividends
D. Reporting a net loss for the year
C. Declaring dividends
- You are conducting financial analysis of Netflix and you want to calculate Netflix’s times interest earned ratio. Which financial statement provides the necessary information to calculate this ratio?
A. Income Statement
B. Statement of Cash Flows
C. Balance Sheet
D. Statement of Stockholder’s Equity
A. Income Statement
- Kenyon Noble has provided the following data about its common stock:
* Par value is $10 per share
* 1,000,000 authorized shares
* 400,000 shares are outstanding
* 450,000 shares are issued
How many shares of treasury stock does Revelry have?
A. 0
B. 600,000
C. 400,000
D. 50,000
D. 50,000
- Suppose that during 2023, Beagle Bites had $75,000 of cash sales, $200,000 of credit sales, and sales returns of $15,000. Beagle Bites estimates bad debt expense assuming that 1.5% of credit sales will be uncollectible. What is Beagle Bites’ bad debt expense for 2023?
A. $3,000
B. $4,125
C. $15,000
D. $18,000
A. $3,000
- At the beginning of 2023, FedEx purchased a new delivery truck with a purchase price of$75,000. FedEx also had to pay $5,000 of transportation costs to transport the truck to their facilities.FedEx estimates the truck will have a $20,000 residual value and estimated useful life of 10 years. Assuming FedEx uses straight-line depreciation, what is the annual depreciation expense FedEx will record for this truck?
A. $7,500
B. $8,000
C. $5,500
D. $6,000
D. $6,000
- Which of the following transactions will increase a company’s debt-to-equity ratio?
A. Issuing bonds
B. Issuing common stock
C. Providing services for a customer who paid cash in a previous period
D. Purchasing inventory with cash
A. Issuing bonds
- Apple provided Lucy Inc. provided the following information for 2023:
Operating expenses were $225,000
Cost of sales were $376,000
Net sales were $940,000
Interest expense was $32,000
Income tax expense was $151,000
What was Lucy’s 2023 gross profit?
A. $156,000
B. $564,000
C. $339,000
D. $715,000
B. $564,000
- Which of the following correctly describes the impact of paying cash in advance for an insurance policy?
A. Assets decrease and expenses increase
B. Assets and liabilities increase
C. Assets and net income decrease
D. Total assets are not affected
D. Total assets are not affected
- The primary responsibility for the accuracy of a company’s financial statements lies with the company’s ______. (fill in the blank)
A. board of directors
B. external auditor
C. Chief Executive Officers (CEO) and Chief Financial Officer (CFO)
D. accounting staff
C. Chief Executive Officers (CEO) and Chief Financial Officer (CFO)
- Which of the following statements is correct?
A. FIFO reports lower net income amounts than LIFO when unit costs are increasing
B. LIFO reports the same amount of inventory on the balance sheet as FIFO when unit costs are increasing
C. LIFO reports a higher net income amount than FIFO when unit costs are decreasing
D. LIFO reports the same amount of net income as FIFO when unit costs are increasing.
C. LIFO reports a higher net income amount than FIFO when unit costs are decreasing
- At the beginning of the year, Cedar Corp’s Retained Earnings balance was $1,170,000. Net income for the year was $470,000 and Cedar Corp declared and paid $70,000 of cash dividends during the year. At the end of the year, Cedar Corp has total assets of $4,500,000, and total contributed capital of $1,600,000. Given what you know about Cedar Corp, what is the amount of Cedar Corp’s retained earnings at the end of the year?
A. $1,030,000
B. $1,570,000
C. $1,640,000
C. $1,640,000
B. $1,570,000
- Suppose you are conducting financial analysis of Amazon and you want to know the amount of obligations the company must repay its creditors within the next 12 months. Which financial statement provides this information?
A. Income Statement
B. Statement of Cash Flows
C. Balance Sheet
D. Statement of Stockholder’s Equity
C. Balance Sheet
- What type of account is Accounts Receivable?
A. Revenue
B. Asset
C. Expense
D. Liability
B. Asset
