Week 1 questions
blteeyesv8041n1 In which forms of business organization are the owners personally liable for all the debts of the business?
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Sole proprietorships and corporations�
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Sole proprietorships and partnerships�
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Partnership and corporation�
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All of the answer choices are correct�
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2 Which of the following is not an external user of accounting data?
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Customers�
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Economic planners�
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Chief Financial Officer�
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Labor unions�
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3 The financial statements for Harold Corporation contained the following information:
Accounts receivable�
$ 5,000�
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Sales revenue�
75,000�
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Cash�
15,000�
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Salaries and wages expense�
20,000�
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Rent expense�
10,000�
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�How much was Harold’s net income?
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$45,000�
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$15,000�
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$65,000�
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$60,000�
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4 In which of the following sequences are the financial statements usually prepared?
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Balance sheet, statement of cash flows, income statement and retained earnings statement.�
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Income statement, retained earnings statement, balance sheet, and statement of cash flows.�
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Income statement, balance sheet, retained earnings statement, and statement of cash flows.�
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Balance sheet, retained earnings statement, statement of cash flows, and income statement.�
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5 Which of the following are not considered to be primary users of financial statements in countries outside the U.S.?
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Central government planners�
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Tax authorities�
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Economic advisors�
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Private investors�
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6 For 2017, Stoneland Corporation reported net income, $24,000; net sales, $400,000; and average shares outstanding, 6,000. There were no preferred stock dividends. How much was the 2017 earnings per share
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$4.00�
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$0.06�
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$16.67�
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$66.67�
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7 The following ratios are available for Leer Inc. and Stable Inc.
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Current Ratio�
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Debt to Assets Ratio�
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Earnings per Share�
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Leer Inc.�
2:1�
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75%�
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$3.50�
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Stable Inc.�
1.5:1�
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40%�
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$2.75�
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��Compared to Stable Inc., Leer Inc. has
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lower liquidity, higher solvency, and higher profitability.�
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higher liquidity, lower solvency, and higher profitability.�
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higher liquidity, higher solvency, but profitability cannot be compared based on information provided.�
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higher liquidity and lower solvency, but profitability cannot be compared based on information provided.�
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8 At December 31, 2017, Shorts Company had retained earnings of $2,184,000. During 2017, the company issued stock for $98,000, and paid dividends of $34,000. Net income for 2017 was $402,000. How much was the retained earnings balance at the beginning of 2017?
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$1,816,000�
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$2,454,000�
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$1,914,000�
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$2,552,000�
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9Which of the following ratios measures the ability of the company to survive over a long period of time?
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Current ratios�
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Liquidity ratios�
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Profitability ratios�
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Solvency ratios�
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10 What are the accounting rules that have substantial authoritative support and are recognized as a general guide for financial reporting purposes in the U. S.?
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Generally accepted accounting standards�
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Generally accepted accounting principles�
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Generally accepted auditing principles�
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General accounting principles�
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