Exam_1_Review - CHAPTERS 1 AND 2 Multiple Choice...

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CHAPTERS 1 AND 2 Multiple Choice Instructions: Designate the best answer for each of the following questions. _c__ 1. Which of the following is a separate legal entity? a. Proprietorship b. Sole proprietorship c. Corporation d. Partnership _b__ 2. Indicate which of the following items would not be reported in the operating section of the Statement of Cash Flows 3. A financial statement that reports accounting data at a specific date is the 4. Which of the following is not considered an external user of accounting information? 5. GAAP refers to a. General Accounting and Auditing Principles. b. Guidelines for American Accounting Procedures. c. General Association of Accounting Practitioners. d. Generally Accepted Accounting Principles. _b__ 6. Which is an indicator of profitability? 7. Which of the following is false ?
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increased by $35,000 during the same period, the amount and direction (increase or decrease) of the period’s change in total assets is a: 9. Current assets are listed a. alphabetically. b. by importance. c. by longevity. d. by liquidity. _a__10. To be relevant, accounting information must a. be capable of making a difference in a decision. b. be presented on the balance sheet. c. be recorded at historical cost. d. improve the company’s internal control. . __b_11. In accounting, which of the following is not a description of reliability as it relates to accounting information? a. Verifiable b. Be the least likely to overstate assets or income c. A faithful representation d. Neutral _b__12. Financial statements combining the operations of Kohls and Target would violate the a. monetary unit assumption. b. economic entity assumption. c. cost principle. d. full disclosure principle. _a__13. Limited liability (no liability beyond investment) is not enjoyed by the owner(s) of a a. partnership and proprietorship. b. partnership and corporation. c. proprietorship and corporation. d. corporation. _b__14. The Retained Earnings account had a beginning balance of $60,000 and an ending balance of $70,000. If $20,000 of dividends were declared and paid during the period, net income must have been a. $20,000. b. $30,000. c. $10,000. d. $50,000.
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Matching: Financial Statement Analysis Match the terms given below with the definitions or descriptions that follow by placing the appropriate letter in the space provided. A. Liquidity E. Profitability B. Earnings per share F. Dividends C. Debt to total assets ratio G. Working capital D. Current ratio H. Solvency _____d
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