201exam1 - Kimmel, Weygandt & Kieso - Sample Exam 1 Name: _...

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Name: __________________________ Date: _____________ 1. Which financial statement would best indicate whether the company relies on debt or stockholders' equity to finance its assets? A) Statement of Cash Flows B) Retained Earnings Statement C) Income Statement D) Balance Sheet 2. Stockholders' equity A) is usually equal to cash on hand. B) is equal to liabilities and retained earnings. C) includes retained earning and common stock. D) is shown on the income statement. 3. Which of the following activities involves collecting the necessary funds to support the business? A) Operating B) Investing C) Financing D) Delivering 4. Issuing shares of stock in exchange for cash is an example of a(n) A) delivering activity. B) investing activity. C) financing activity. D) operating activity. 5. Which of the following is not a principal type of business activity? A) Operating B) Investing C) Financing D) Delivering 6. Which of the following is not a common way that managers use the balance sheet? A) To analyze the balances of assets, liabilities, and stockholders' equity throughout the accounting period B) To determine if the cash balance is sufficient for future needs C) To analyze the balance between debt and common stock financing D) To analyze the balance of accounts receivable on the last day of the accounting period Page 1
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7. Ashton Company began the year with retained earnings of $210,000. During the year, the company recorded revenues of $300,000, expenses of $228,000, and paid dividends of $24,000. What was Ashton's retained earnings at the end of the year? A) $306,000 B) $258,000 C) $486,000 D) $282,000 8. Net income will result during a time period when: A) assets exceed liabilities. B) assets exceed revenues. C) expenses exceed revenues. D) revenues exceed expenses. 9. An annual report includes all of the following except A) management discussion and analysis section. B) notes to the financial statements. C) an auditor's report. D) salary information for all the executives. 10. Stockholders' equity can be described as claims of A) creditors on total assets. B) owners on total assets. C) customers on total assets. D) debtors on total assets. 11. Jennner Corporation began the year with retained earnings of $155,000. During the year, the company issued $210,000 of common stock, recorded expenses of $600,000, and paid dividends of $40,000. If Jenner's ending retained earnings was $165,000, what was the company's revenue for the year? A) $610,000 B) $650,000 C) $820,000 D) $860,000 12. The balance sheet A) summarizes the changes in retained earnings for a specific period of time. B)
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This note was uploaded on 05/08/2011 for the course ACCT 101 taught by Professor Miller during the Spring '11 term at Arizona Western College.

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201exam1 - Kimmel, Weygandt & Kieso - Sample Exam 1 Name: _...

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