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Exam 1 solution - Exam 1 I Multiple-Choice Questions(6...

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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 c (easy / LO: 1 / comprehension) 3. A company would report a net loss when d (easy / LO: 3 / comprehension) 4. Which of the following equations represents the claims on a company’s net assets? 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 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 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 c (difficult / LO: 3 / application)
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