February 24, 2011
Important: Bubble in your responses in the spaces provided next to each question on the Scantron sheet.
MULTIPLE CHOICE QUESTIONS: Identify the letter of the choice (A,B,C or D) that best completes the statement or answers the question,
and darken the corresponding on the Scantron sheet.
Which one of the following groups is considered an internal user of financial statements?
A bank reviewing a loan application from a corporation.
The labor union representing employees of a company that is involved in labor negotiations
The financial analysts for a brokerage firm who are preparing recommendations the firm’s brokers
on companies in a certain industry
Factory managers that supervise production line workers.
Peerless Corporation purchased land in 2000 for $150,000.
In 2010, it purchased a nearly identical parcel of land for
In its 2010 balance sheet, Peerless valued these two parcels of land at a combined value of $700,000.
Reporting the land in this manner violated the:
Fair Value Principle
Monetary Unit Asumption
Economic Entity Assumption
Common Stock, as shown in the balance sheet of a corporation, always represents:
The amount invested in the business by stockholders when shares of stock were initially issued by a
The total owners' equity for a business organized as a corporation.
The owners' equity accumulated through profitable operations that has not been paid out as
Price paid by corporation to purchase shares of stock in the corporation from other stockholders.
A transaction caused a $55,000 increase in both assets and total liabilities. This transaction could have been:
Purchase for office equipment for $55,000 cash.
Purchase of office equipment for $120,000, paying $65,000 cash and issuing a note payable for the
Repayment of a $55,000 bank loan.
Investment of $55,000 cash in the business by the owner
As of December 31, 2010, the Balance Sheet of Sparkling Products, Inc. contain the following items (in random order):
Determine the amount of Equipment.