This preview has intentionally blurred parts. Sign up to view the full document

View Full Document

Unformatted Document Excerpt

Multiple Choice QuestionsCHAPTER 1 REVIEW 42. On January 1, 2006, two individuals invested $500,000 each to form Jordan Corporation. Jordan had total revenues of $200,000 during 2006 and $250,000 during 2007. Total expenses for the same periods were $120,000 and $140,000 respectively. Cash dividends paid out to stockholders totaled $20,000 in 2006 and $25,000 in 2007. What was Jordans total stockholders' equity at the end of 2006 and 2007? A) $1,000,000 and $1,065,000 respectively. B) $1,060,000 and $1,145,000 respectively. C) $1,100,000 and $1,170,000 respectively. D) $1,210,000 and $1,410,000 respectively. Answer: B Difficulty: Hard L.O.: 1 44. Atlantic Corporation reported the following amounts at the end of the first year of operations, December 31, 2006: contributed capital $100,000; sales revenue $400,000; total assets $300,000; $20,000 dividends; and total liabilities $160,000. Retained earnings and total expenses would be A) retained earnings $40,000 and expenses $340,000. B) retained earnings $60,000 and expenses $320,000. C) retained earnings $140,000 and expenses $240,000. D) retained earnings $160,000 and expenses $220,000. E) None of the above. Answer: A Difficulty: Hard L.O.: 1 45. The financial statement that reports the financial position of a business is the A) income statement. B) balance sheet. C) statement of cash flows. D) footnotes to the financial statements. E) auditor's opinion. Answer: B Difficulty: Easy L.O.: 1 46. Barker Corporation reported the following for 2007; total assets, $270,000; total liabilities, $105,000; contributed capital, $120,000. Therefore, retained earnings was A) $15,000. B) $120,000. C) $60,000. D) $45,000. E) None of the above is correct. 1 Answer: D Difficulty: Medium L.O.: 1 47. Which of the following reports the cash inflows, cash outflows, and change in cash for period? A) Income statement. B) Balance sheet. C) Statement of cash flows. D) Auditor's report. E) None of the above is correct. Answer: C Difficulty: Easy L.O.: 1 55. Which of Chaos financial statements would you look at to determine whether Chao will be able to pay for the goods when payment is due in 30 days? A) income statement. B) balance sheet. C) statement of retained earnings. D) statement of cash flows. Answer: B Difficulty: Hard L.O.: 1 56. Which financial statement shows the financial position of a business as of a given date? A) balance sheet. B) income statement. C) statement of cash flows. D) statement of retained earnings. E) None of the above is correct. Answer: A Difficulty: Easy L.O.: 1 57. Which of the following is not considered to be a liability? A) accounts payable B) notes payable C) wages payable D) cost of goods sold Answer: D Difficulty: Medium L.O.: 1 2 58. Michael Company owes you $800 on account due within 15 days. Which of the following amounts on its balance sheet would help you to determine the likelihood that you will be paid in full and on time? ... View Full Document

End of Preview

Sign up now to access the rest of the document