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

View Full Document

Unformatted Document Excerpt

MULTIPLE CHOICE 1. The balance sheet reports: a. the assets, liabilities, gains, and losses for a period of time b. the changes in assets, liabilities, and equity for a period of time c. the assets, expenses, and liabilities as of a certain date d. the probable future benefits, probable future sacrifices, and residual interest for a period of time e. the financial condition of an accounting entity as of a particular date ANS: E PTS: 1 2. Which of the following would not appear on a conventional balance sheet? a. income taxes payable b. funds from operations c. cash surrender value of life insurance d. appropriation for contingencies (restriction of retained earnings) e. patents ANS: B PTS: 1 3. At the beginning of the year, Execon Company had total assets of $200,000, total liabilities of $110,000, and shareholders' equity of $90,000. For the year, Execon Company earned net income of $75,000 and declared cash dividends of $30,000. At the end of the year, the company had total assets of $300,000 and its shareholders' equity was at $135,000. At the end of the year, Execon Corporation had total liabilities of: a. $0 b. $45,000 c. $50,000 d. $165,000 e. none of the answers are correct ANS: D PTS: 1 4. Ownership of debt instruments of the government and other companies that can be readily converted to cash are best reported as: a. long-term investments b. cash c. marketable securities d. intangibles e. inventory of near-cash items ANS: C PTS: 1 5. Tangible assets on the balance sheet should include: a. equipment b. taxes payable c. trademarks d. bonds payable e. none of the answers are correct ANS: A PTS: 1 6. The current asset section of the balance sheet should include: a. land b. trademarks c. investment in C Company (for purposes of control) d. dividends payable e. work in process inventory ANS: E PTS: 1 7. The current liability section of the balance sheet should include: a. buildings b. goodwill c. land held for speculation purposes d. accounts payable e. none of the answers are correct ANS: D PTS: 1 8. Which of the following is not a current asset? a. marketable securities b. material inventory c. unearned rent income d. prepaid interest e. prepaid insurance ANS: C PTS: 1 9. If a parent has some control over a subsidiary but the subsidiary is not consolidated, the subsidiary is accounted for as: a. a marketable security b. an investment c. a liability d. a fixed asset e. none of the answers are correct ANS: B PTS: 1 10. Which of the following is not a proper use of notes? a. To describe the nature and effect of a change in accounting principle, such as from FIFO to LIFO. b. To indicate the basis for asset valuation. c. To indicate the method of depreciation.... View Full Document

End of Preview

Sign up now to access the rest of the document