ACCT Answers CH 1-4 - VILLANOVA UNIVERSITY School of...

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VILLANOVA UNIVERSITY School of Business VSB2010-4 Accounting Exam (Chapters 1-4) NAME______________________ Row ____ As a community committed to the Augustinian ideals of truth, unity and love, Villanova University prides itself on maintaining the highest standards of academic integrity and does not tolerate any forms of academic dishonesty or misconduct. Accordingly, each student who takes an examination is expected to sign the following statement: I _______________________(sign your name) have not had any unsanctioned prior access to this examination and will conduct myself in an honest manner in regard to all aspects of this examination. PART 1 – MULTIPLE CHOICE 1. Which of the following is not an advantage of the corporate form of business organization? A) No personal liability B) Easy to transfer ownership C) Favorable tax treatment D) Easy to raise funds 2. Which of the following is the most appropriate and modern definition of accounting? A) The information system that identifies, records, and communicates the economic events of an organization to interested users B) A means of collecting information C) The interconnected network of subsystems necessary to operate a business D) Electronic collection, organization, and communication of vast amounts of information. 3. Ending retained earnings for a period is equal to: A) Beginning retained earnings + Net income + Dividends B) Beginning retained earnings – Net income – Dividends C) Beginning retained earnings + Net income – Dividends D) Beginning retained earnings – Net income + Dividends 4. Which of the following is not a satisfactory statement of the accounting equation? A) Assets = Stockholders' Equity – Liabilities. B) Assets = Liabilities + Stockholders' Equity. C) Assets - Liabilities = Stockholders' Equity. D) Assets - Stockholders' Equity = Liabilities. 5. If total liabilities increased by $15,000 and stockholders' equity increased by $5,000 during a period of time, then total assets must change by what amount and direction during that same period? Page 1
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A) $20,000 decrease B) $20,000 increase C) $25,000 increase D) $30,000 increase 6. 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. 7. N3 Corporation has assets of $2.7 million, common stock of $702,000, and retained earnings of $428,000. What are the creditors' claims on their assets? A) $2,426,000 B) $1,130,000 C) $1,570,000 D) $2,974,000 8. How can a company improve its current ratio? A) Work with a creditor to reclassify some current debt into long-term debt B) Use cash to reduce current liabilities C) Nothing can ethically be done to improve the current ratio D) Use excess cash to buy new equipment 9. If total liabilities increased by $5,000, then A) assets must have decreased by $5,000. B)
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This note was uploaded on 03/30/2012 for the course ACCT 101 taught by Professor Rives during the Spring '12 term at Coastline Community College.

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ACCT Answers CH 1-4 - VILLANOVA UNIVERSITY School of...

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