Exam 1 solution - Exam 1 September 22, 2008 I....

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
1 Exam 1 September 22, 2008 I. Multiple-Choice Questions (6 points) 1. Which of the following business decisions is least likely to require financial information? a. Citizens’ Bank reviews a loan application for Lamprey Corp. b. Lamprey Corp. attempts to sell its common stock to the public. c. Lamprey Corp. evaluates its current employees to identify a replacement for a retiring employee. d. Lamprey Corp. considers purchasing stock in another corporation. c (moderate / LO: 2 / comprehension) 2. Financial accounting a. provides information primarily for managers of a company b. is required for corporations but not for other types of businesses c. provides information primarily for external decision makers d. is exclusively created for internal users of an organization c (easy / LO: 1 / comprehension) 3. A company would report a net loss when a. liabilities increase during an accounting period b. assets decrease during an accounting period c. dividends are paid to the stockholders d. expenses exceed revenues during an accounting period d (easy / LO: 3 / comprehension) 4. Which of the following equations represents the claims on a company’s net assets? a. Assets Liabilities b. Common Stock + Retained Earnings c. Liabilities + Owner’s Equity d. Assets Owner’s Equity c (moderate / LO: 3 / comprehension) 5. Which of the following is not a financial statement? a. Liability statement b. Balance sheet c. Income statement d. Statement of changes in owner’s equity a (difficult / LO: 3 / comprehension) 6. All of the following are balance sheet accounts except a. cash b. inventories c. expenses d. retained earnings c (difficult / LO: 3 / knowledge) 7. During the year, the assets of Weber Consulting increased by $145,000 and the liabilities decreased by $35,000. If stockholders’ equity is $395,000 at the end of the year, the stockholders’ equity at the beginning of the year must have been a. $285,000 b. $215,000 c. $575,000 d. $505,000 b (difficult / LO: 3 / comprehension) 8. During the year, the assets of SJC, Inc., increased by $100,000 and the liabilities increased by $50,000. If the owners’ equity in the business is $250,000 at the end of the year, the owners’ equity at the beginning of the year must have been a. $25,000 b. $50,000 c. $200,000 d. $125,000 c (difficult / LO: 3 / application) 9. How does the balance sheet differ from the income statement? a. The income statement covers a period of time and the balance sheet is for a specific moment in time.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
2 b. The income statement is for a specific moment in time and the balance sheet covers a period of time. c.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 11/24/2009 for the course BA 2301 taught by Professor Mattpolze during the Fall '08 term at University of Texas at Dallas, Richardson.

Page1 / 4

Exam 1 solution - Exam 1 September 22, 2008 I....

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online