ACC 201 - Points Awarded 19.00 Points Missed 5.00...

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Unformatted text preview: Points Awarded 19.00 Points Missed 5.00 Percentage 79.2% 1. A company's ability to attract and hold investment capital ultimately depends on its A) Profitability B) Planning C) New product development D) Budgeting Feedback: Investors are concerned about the return on their investments. Hence, profitability is important. New product development does not guarantee its profitability. The role of Budgeting is to coordinate and control the business activities. Points Earned: 1.0/1.0 2. Here is the balance sheet for Abbot Box Company, Inc.: Abbot Box Company, Inc. Balance Sheet December 31, 20xx Assets Liabilities Cash $ 8,000 Accounts payable $16,000 Accounts receivable 1,000 Land 14,000 Stockholders' Equity Building 44,000 Common stock $40,000 Equipment 13,000 Retained earnings 24,000 Total stockholders' equity 64,000 Total liabilities and Total assets $80,000 stockholders' equity $80,000 If the balance in the Cash account were used to buy more equipment, then the total assets would A) remain unchanged B) increase by $8,000 C) decrease by $8,000. D) increase by $21,000 Feedback: Cash will go down and equipment will go up for the same amount The effect is only limited to asset exchange. No effect on "Total" Assets. Points Earned: 0.0/1.0 3. Which of the following is the most appropriate and modern definition of accounting? A) Electronic collection, organization, and communication of vast amounts of information B) The interconnected network of subsystems necessary to operate a business C) A means of recording transactions and keeping records D) The measurement, processing, and communication of financial information about an identifiable economic entity Points Earned: 1.0/1.0 4. 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. Feedback: Net income = revenues - expenses Points Earned: 1.0/1.0 5. Which of the following items has no effect on stockholders' equity? A) Land purchased B) Revenue C) Expense D) Dividend declared and paid Feedback: Revenues and expenses taken together will generate income, which will increase retained earnigs and stockholders' equity. Dividend declared and paid will reduce retained earnings as well as stockholders' equity. Land purchased by cash does not affect the contributed capital or retained eanings becuase it is only an asset exchange transaction. capital or retained eanings becuase it is only an asset exchange transaction....
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This note was uploaded on 06/19/2011 for the course ACC 201 taught by Professor - during the Fall '10 term at Sam Houston State University.

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ACC 201 - Points Awarded 19.00 Points Missed 5.00...

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