Download LSU ACCT 2000 Exam 1 questions with answers and more Exams Accounting in PDF only on Docsity!
ACCT |\ 2000 |\Lowe-Ardoin |\Exam |\ 1 |\with |\well |\
answered |\questions
A. |\Increased |\difficulty |\of |\raising |\funds B. |\Harder |\to |\transfer |\ownership |
C. |\Reduced |\legal |\liability |\for |\investors D. |\Most |\common |\form |\of |\organizationWhich |\is |\an |\advantage |\of |
corporations |\relative |\to |\partnerships |\and |\sole |\proprietorships? |- |
CORRECT |\ANSWERS |\✔✔C. |\Reduced |\legal |\liability |\for |\investors Which |\forms |\of |\business |\organization |\are |\considered |\to |\be |\separate |\accounting |\entities? A. |\Sole |\proprietorships |\and |\partnerships |\only B. |\Partnerships |\and |\corps |\only C. |\only |\corps D. |\Sole |\proprietorships, |\corps, |\and |\partnerships |- |\CORRECT |
ANSWERS |\✔✔D. |\Sole |\proprietorships, |\corps, |\and |\partnerships Which |\of |\the |\following |\did |\not |\result |\from |\the |\Sarbanes-Oxley |\Act? A. |\Top |\management |\must |\now |\certify |\the |\accuracy |\of |\financial |
information B. |\Penalties |\for |\fraudulent |\activity |\increased. |\
C. |\Increased |\independence |\of |\the |\outside |\auditors D. |\Tax |\rates |\on |\corps |\increased. |- |\CORRECT |\ANSWERS |\✔✔D. |\Tax |
rates |\on |\corps |\increased The |\payment |\of |\dividends |\is |\an |\example |\of |\a A. |\operating |\activity B. |\financing |\activity C. |\investing |\activity D. |\delivery |\activity |- |\CORRECT |\ANSWERS |\✔✔B What |\kind |\of |\classification |\is |\cost |\of |\goods |\sold? A. |\Asset |
B. |\Expense |
C. |\Liability D. |\Revenue |- |\CORRECT |\ANSWERS |\✔✔B. |\Expense What |\section |\of |\a |\cash |\flow |\statement |\shows |\the |\cash |\spent |\on |
new |\equipment |\during |\the |\past |\accounting |\period? A. |\the |\investing |\section B. |\the |\operating |\section C. |\the |\financing |\section
Ease |\of |\transferring |\ownership |\is |\a |\characteristic |\of |\which |\form |\of |
business |\organization? A. |\sole |\proprietorship B. |\partnership C. |\Corp D. |\All |\of |\the |\above |- |\CORRECT |\ANSWERS |\✔✔C In |\which |\forms |\of |\business |\organizations |\are |\the |\owners |\personally |\liable |\for |\all |\debts |\of |\the |\business? A. |\sole |\proprietorships |\and |\corps B. |\sole |\proprietorships |\and |\partnerships C. |\Partnership |\and |\corp D. |\All |\of |\the |\above |- |\CORRECT |\ANSWERS |\✔✔B The |\sole |\proprietorship |\form |\of |\business |\org |
A. |\must |\have |\at |\least |\ 2 |\owners |\in |\most |\states B. |\generally |\receives |\favorable |\tax |\treatment |\relative |\to |\a |\corp C. |\Combines |\the |\records |\of |\the |\business |\with |\the |\personal |\records |
of |\the |\owner |
D. |\is |\classified |\as |\a |\separate |\legal |\entity |- |\CORRECT |\ANSWERS |\✔✔B
Which |\forms |\of |\business |\org |\are |\considered |\to |\be |\separate |
accounting |\entities? A. |\sole |\proprietorships |\and |\partnerships |\only B. |\partnerships |\and |\corps |\only C. |\only |\corps |
D. |\sole |\proprietorships, |\corps, |\and |\partnerships |- |\CORRECT |
ANSWERS |\✔✔D To |\which |\of |\the |\following |\questions |\will |\internal |\users |\want |
answers? A. |\what |\selling |\price |\for |\our |\product |\will |\maximize |\the |\company's |
net |\income? B. |\Which |\product |\line |\is |\most |\profitable? C. |\Is |\cash |\sufficient |\to |\pay |\dividends |\to |\stockholders? D. |\All |\of |\the |\above |- |\CORRECT |\ANSWERS |\✔✔D Which |\of |\the |\following |\is |\not |\an |\external |\user |\of |\accounting |\data? A. |\labor |\unions |
B. |\customers C. |\economic |\planners |
D. |\CFO |- |\CORRECT |\ANSWERS |\✔✔D Which |\statement |\about |\users |\of |\accounting |\info |\is |\incorrect?
Paying |\interest |\expense |\and |\receiving |\interest |\revenue |\are |
examples |\of |
A. |\operating |\activities |
B. |\financing |\activities C, |\investing |\activities D. |\delivery |\activities |- |\CORRECT |\ANSWERS |\✔✔A The |\payment |\of |\dividends |\is |\an |\example |\of |\a |
A. |\operating |\activity B. |\financing |\activity C. |\investing |\activity D. |\delivery |\activity |- |\CORRECT |\ANSWERS |\✔✔B Which |\of |\the |\following |\is |\not |\one |\of |\the |\three |\primary |\business |
activities? A. |\Financing B. |\Operating C. |\Advertising D. |\Investing |- |\CORRECT |\ANSWERS |\✔✔C Which |\of |\the |\following |\is |\an |\example |\of |\a |\financing |\activity? A. |\issuing |\shares |\of |\common |\stock
B. |\selling |\goods |\on |\account C. |\buying |\delivery |\equipment D. |\buying |\inventory |- |\CORRECT |\ANSWERS |\✔✔A Resources |\owned |\by |\a |\business |\are |\referred |\to |\as |
A. |\stockholders' |\equity B. |\liabilities C. |\assets D. |\revenues |- |\CORRECT |\ANSWERS |\✔✔C In |\terms |\of |\the |\principal |\types |\of |\business |\activities, |\paying |\salaries |\expense |\is |\an |\example |\of |\an |
A. |\operating |\activity B. |\Financing |\activity |
C. |\investing |\activity |
D. |\advertising |\activity |- |\CORRECT |\ANSWERS |\✔✔A What |\kind |\of |\classification |\is |\cost |\of |\goods |\sold? A. |\asset |
B. |\expense |
C. |\liability |
D. |\revenue |- |\CORRECT |\ANSWERS |\✔✔B
Which |\of |\the |\following |\would |\not |\appear |\in |\the |\income |\statement? A. |\Service |\revenue B. |\Interest |\expense |
C. |\Net |\income D. |\Dividends |\paid |- |\CORRECT |\ANSWERS |\✔✔D Which |\of |\the |\following |\would |\not |\appear |\on |\the |\retained |\earnings |
statement? A. |\beginning |\retained |\earnings |\balance |
B. |\Dividends C. |\Service |\revenue |
D. |\Net |\income |- |\CORRECT |\ANSWERS |\✔✔C Net |\income |\will |\result |\during |\a |\time |\period |\when A. |\assets |\exceed |\liabilities B. |\assets |\exceed |\revenues C. |\expenses |\exceed |\revenues D. |\revenues |\exceed |\expenses |- |\CORRECT |\ANSWERS |\✔✔D The |\financial |\statements |\for |\Harold |\Corporation |\contained |\the |
following |\information: Accounts |\receivable: |$5,
Sales |\revenue: |$75, Cash: |$15, Salaries |\and |\wages |\expense: |$20, Rent |\expense: |$10, How |\much |\was |\Harold's |\income? A. |\60, B. |\15, C. |\65, D. |\45,000 |- |\CORRECT |\ANSWERS |\✔✔D In |\which |\of |\the |\following |\sequences |\are |\the |\financial |\statements |
usually |\prepared? A. |\income |\statement, |\balance |\sheet, |\retained |\earnings |\statement, |
and |\statement |\of |\cash |\flows B. |\balance |\sheet, |\retained |\earnings |\statement, |\statement |\of |\cash |
flows, |\and |\income |\statement C. |\Balance |\sheet, |\statement |\of |\cash |\flows, |\income |\statement |\and |
retained |\earnings |\statement D. |\income |\statement, |\retained |\earnings |\statement, |\balance |\sheet, |
and |\statement |\of |\cash |\flows |- |\CORRECT |\ANSWERS |\✔✔D
What |\section |\of |\a |\cash |\flow |\statement |\shows |\the |\cash |\spent |\on |
new |\equipment |\during |\the |\past |\accounting |\period? A. |\the |\investing |\section |
B. |\the |\operating |\section C. |\the |\financing |\section D. |\the |\cash |\flow |\statement |\does |\not |\give |\this |\information |- |
CORRECT |\ANSWERS |\✔✔A Which |\financial |\statement |\reports |\assets, |\liabilities, |\and |
stockholders' |\equity? A. |\income |\statement |
B. |\retained |\earnings |\statement C. |\balance |\sheet D. |\statement |\of |\cash |\flows |- |\CORRECT |\ANSWERS |\✔✔C The |\ending |\retained |\earnings |\balance |\appears |\on A. |\the |\retained |\earnings |\statement |\only B. |\the |\balance |\sheet |\only C. |\the |\income |\statement |\and |\the |\retained |\earnings |\statement D. |\both |\the |\retained |\earnings |\and |\the |\balance |\sheet |- |\CORRECT |
ANSWERS |\✔✔D
Saira's |\Maid |\Service |\began |\the |\year |\with |\total |\assets |\of |$120,000 |
and |\stockholders' |\equity |\of |$40,000. |\During |\the |\year |\the |\company |
earned |$90,000 |\in |\net |\income |\and |\paid |$20,000 |\in |\dividends. |\The |
company |\did |\not |\issue |\any |\additional |\shares |\of |\stock |\during |\the |
year. |\Total |\assets |\at |\the |\end |\of |\the |\year |\were |$215,000. |\How |\much |
are |\total |\liabilities |\at |\the |\end |\of |\the |\year? A. |$80, B. |$90, C. |$110, D. |$105,000 |- |\CORRECT |\ANSWERS |\✔✔D The |\balance |\sheet A. |\summarizes |\the |\changes |\in |\total |\equity |\for |\a |\specific |\period |\of |
time B. |\reports |\the |\changes |\in |\assets, |\liabilities, |\and |\stockholders' |\equity |\over |\a |\period |\of |\time C. |\reports |\the |\assets, |\liabilities, |\and |\stockholders' |\equity |\at |\a |
specific |\date |
D. |\presents |\the |\revenues |\and |\expenses |\for |\a |\specific |\period |\of |\time |- |\CORRECT |\ANSWERS |\✔✔C If |\total |\liabilities |\decreased |\by |$15,000 |\and |\stockholders' |\equity |
increased |\by |$5000 |\during |\a |\period |\of |\time, |\then |\total |\assets |\must |
change |\by |\what |\amount |\and |\direction |\during |\that |\same |\period?
B. |\management |\discussion |\and |\analysis C. |\auditor's |\reports D. |\income |\statement |- |\CORRECT |\ANSWERS |\✔✔A The |\segment |\of |\the |\annual |\report |\that |\presents |\an |\opinion |
regarding |\the |\fairness |\of |\the |\presentation |\of |\the |\financial |\position |
and |\results |\of |\operations |\is/are |\the A. |\income |\statement B. |\auditor's |\opinion C. |\balance |\sheet D. |\financial |\statements |- |\CORRECT |\ANSWERS |\✔✔B When |\the |\auditor |\is |\satisfied |\that |\the |\financial |\statements |\provide |\a |\fair |\representation |\of |\the |\company's |\financial |\position |\and |\results |
of |\operation |\in |\accordance |\with |\generally |\accepted |\accounting |
principles, |\the |\auditor |\will |\express A. |\a |\qualified |\opinion B. |\a |\disclaimer |\of |\opinion C. |\an |\unqualified |\opinion D. |\an |\adverse |\opinion |- |\CORRECT |\ANSWERS |\✔✔C An |\annual |\report |\includes |\all |\of |\the |\following |\except A. |\a |\management |\discussion |\and |\analysis |\section
B. |\notes |\to |\the |\financial |\statements C. |\an |\auditor's |\report |
D. |\a |\listing |\of |\all |\of |\the |\stockholders |- |\CORRECT |\ANSWERS |\✔✔D Which |\section |\of |\the |\annual |\report |\presents |\highlights |\of |\favorable |
or |\unfavorable |\trends |\and |\identifies |\significant |\events |\and |
uncertainties |\affecting |\a |\company's |\ability |\to |\pay |\near-term |
obligations, |\and |\a |\company's |\ability |\to |\fund |\operations |\and |
expansion? A. |\financial |\statements B. |\management |\discussion |\and |\analysis C. |\notes |\to |\the |\financial |\statements D, |\Auditor's |\report |- |\CORRECT |\ANSWERS |\✔✔B Which |\is |\not |\one |\of |\the |\three |\forms |\of |\business |\orgs? A. |\sole |\proprietorship B. |\creditorship C. |\Partnership D. |\corp |- |\CORRECT |\ANSWERS |\✔✔B In |\terms |\of |\the |\principal |\types |\of |\business |\activities, |\paying |\salaries |\expense |\is |\an |\example |\of A. |\operating |\activity
B. |\companies |\that |\go |\bankrupt |\must |\repay |\shareholders |\for |\loss |
investments |
C. |\all |\shareholders |\now |\have |\an |\oversight |\role |\of |\the |\company's |
financial |\activities D. |\top |\management |\must |\certify |\the |\financial |\statements |\for |\their |
company |- |\CORRECT |\ANSWERS |\✔✔D In |\terms |\of |\the |\principal |\types |\of |\business |\activities, |\paying |\salaries |\expense |\is |\an |\example |\of A. |\operating |\activity B. |\financing |\activity C. |\investing |\activity D. |\advertising |\activity |- |\CORRECT |\ANSWERS |\✔✔A Which |\of |\the |\following |\is |\a |\useful |\way |\to |\measure |\the |\ability |\of |\a |
company |\to |\survive |\over |\a |\long |\period |\of |\time? A. |\debt |\to |\assets |\ratio B. |\earnings |\per |\share |
C. |\working |\capital D. |\current |\ratio |- |\CORRECT |\ANSWERS |\✔✔A What |\does |\the |\debt |\to |\assets |\ratio |\measure? A. |\the |\long-term |\ability |\of |\the |\company |\to |\pay |\its |\obligations
B. |\the |\liquidity |\of |\the |\company's |\assets C. |\the |\short-term |\ability |\of |\the |\company |\to |\pay |\its |\obligations D. |\the |\total |\financing |\provided |\by |\creditors |- |\CORRECT |\ANSWERS |
✔✔D When |\preparing |\financial |\statements. |\Ripa |\Industries |\uses |\a |\one- year |\operating |\cycle. |\If |\Ripa |\pays |\its |\insurance |\premiums |\one |\year |
in |\advance, |\how |\should |\it |\list |\prepaid |\insurance |\on |\a |\classified |
balance |\sheet? A. |\as |\an |\intangible |\asset B. |\as |\stockholders' |\equity C. |\as |\a |\long-term |\investment D. |\as |\a |\current |\asset |- |\CORRECT |\ANSWERS |\✔✔D Good |\Buys |\has |\current |\assets |\of |$2.5 |\mill |\and |\current |\liabilities |\of |
$1 |\mil. |\If |\they |\issue |$50,000 |\of |\new |\stock, |\what |\will |\their |\new |
current |\ratio |\be? A. |\1.5: B.3.2: C.3: D.2.55:1 |- |\CORRECT |\ANSWERS |\✔✔D
