2023年财务会计题库TheFinancialStatements.doc

Financial Accounting, 7e
Harrison/Horngren
Test Item File
CHAPTER 1: THE FINANCIAL STATEMENTS

1.1-1 Bookkeeping is a type of accounting used primarily by proprietorships.
Answer: False LO: 1-1 Diff: 2 EOC: QC 1
1.1-2 The three forms of business organizations are proprietorships, partnerships, and for-profit organizations.
Answer: False LO: 1-1 Diff: 1 EOC: E1-13
1.1-3 To convince an investor to invest money in a particular company, relevant and reliable accounting information is required.
Answer: True LO: 1-1 Diff: 1 EOC: E1-14
1.1-4 Limited Liability Companies (LLCs) have members instead of stockholders.
Answer: True LO: 1-1 Diff: 1 EOC: E1-13
1.1-5 All business owners are personally liable for the debts of their businesses.
Answer: False LO: 1-1 Diff: 1 EOC: E1-13
1.1-6 A proprietorship is a distinct and separate entity from the proprietor, from both an accounting and a legal viewpoint.
Answer: False LO: 1-1 Diff: 2 EOC: E1-13
1.1-7 The two types of accounting are:
A. profit and nonprofit.
B. financial and managerial.
C. internal and external.
D. bookkeeping and decision-oriented.
Answer: B LO: 1-1 Diff: 2 EOC: E1-13
1.1-8 According to the author, potential investors need information that is:
A. relevant and reliable.
B. fair and future-oriented.
C. accurate and truthful.
D. audited and complete.
Answer: A LO: 1-1 Diff: 2 EOC: E1-14
1.1-9 Who ultimately controls a corporation?
A. Board of Directors
B. The Chief Executive Officer (CEO)
C. The stockholders
D. The President
Answer: C LO: 1-1 Diff: 2 EOC: E1-13
1.1-10 Financial statements are:
A. standard documents issued by outside consultants who are hired to analyze key operations of the business in financial terms.
B. standard documents that tell us how well a business is performing and where it stands in financial terms.
C. reports created by management that states it is responsible for the acts of the corporation.
D. reports issued by outside consultants who are hired to analyze key operations of the business.
Answer: B LO: 1-1 Diff: 1 EOC: E1-26
1.1-11 For which form of business ownership are the owners of a business legally distinct from the business?
A. Corporation
B. Partnership
C. Proprietorship
D. All of the above
Answer: A LO: 1-1 Diff: 1 EOC: E1-13
1.1-12 All of the following are forms of business organizations EXCEPT:
A. proprietorship.
B. limited partnership.
C. limited proprietorship.
D. limited liability company.
Answer: C LO: 1-1 Diff: 1 EOC: E1-13
1.1-13 The largest organization of professional accountants in the United States is the:
A. Financial Accounting Standards Board.
B. Securities and Exchange Commission.
C. American Institute of Certified Public Accountants.
D. Auditing Standards Board.
Answer: C LO: 1-1 Diff: 2 EOC: P1-53B
1.2-1 Generally accepted accounting principles, or GAAP, are the rules and procedures established by the Financial Accounting Standards Board, or the FASB.
Answer: True LO: 1-2 Diff: 1 EOC: QC 1
1.2-2 The entity concept is the most basic accounting concept.
Answer: True LO: 1-2 Diff: 1 EOC: S1-3
1.2-3 The stable monetary unit concept means that the type of currency used for the financial statements is NOT expected to change.
Answer: False LO: 1-2 Diff: 2 EOC: E1-14
1.2-4 Since cost is a reliable measure to use in financial accounting, the objectivity principle states that assets and services should be recorded at their actual cost.
Answer: False LO: 1-2 Diff: 2 EOC: E1-14
1.2-5 The Financial Accounting Standards Board is responsible for establishing:
A. the code of professional conduct for accountants.
B. the Securities and Exchange Commission.
C. generally accepted accounting principles.
D. the American Institute of Certified Public Accountants.
Answer: C LO: 1-2 Diff: 2 EOC: QC 1
1.2-6 The acronym GAAP stands for:
A. generally acceptable authorized pronouncements.
B. government authorized accountant principles.
C. generally accepted accounting principles.
D. government audited accounting pronouncements.
Answer: C LO: 1-2 Diff: 2 EOC: E1-27
1.2-7 All of the following are characteristics of useful accounting information EXCEPT:
A. informative.
B. relevant.
C. consistent.
D. reliable.
Answer: A LO: 1-2 Diff: 2 EOC: E1-14
1.2-8 The objectivity principle of accounting:
A. holds that the entity will remain in operation for the foreseeable future.
B. enables accountants to ignore the effect of inflation in the accounting records.
C. maintains that each organization or section of an organization stands apart from other organizations and individuals.
D. ensures that accounting records and statements are based on the most reliable data available.
Answer: D LO: 1-2 Diff: 2 EOC: E1-14
1.2-9 The stable-monetary-unit concept of accounting:
A. ensures that accounting records and statements are based on the most reliable data available.
B. holds that the entity will remain in operation for the foreseeable future.
c. maintains that each organization or section of an organization stands apart from other organizations and individuals.
d. enables accountants to ignore the effect of inflation in the accounting records.
Answer: D LO: 1-2 Diff: 2 EOC: E1-14
1.2-10 The going-concern concept of accounting:
A. enables accountants to ignore the effect of inflation in the accounting records.
B. holds that the entity will remain in operation for the foreseeable future.
c. maintains that each organization or section of an organization stands apart from other organizations and individuals.
d. ensures that accounting records and statements are based on the most reliable data available.
Answer: B LO: 1-2 Diff: 2 EOC: P1-43A
1.2-11 The principle which states that assets acquired by the business should be recorded at their actual price is the:
A. cost principle.
B. objectivity principle.
C. reliability principle.
D. stable dollar principle.
Answer: A LO: 1-2 Diff: 1 EOC: Q1-30
1.2-12 The reliability principle is also called the:
A. relevance concept.
B. truthfulness concept.
C. objectivity principle.
D. full and fair principle.
Answer: C LO: 1-2 Diff: 2 EOC: E1-14
1.2-13 Which of the following statements is FALSE?
A. Reliable data may be supported by objective evidence.
B. The informed opinion of owners is an important source of objective evidence.
C. An independent appraisal, conducted by a licensed professional, is usually considered reliable.
D. Reliable data are verifiable.
Answer: B LO: 1-2 Diff: 2 EOC: E1-14
1.2-14 The relevant measure of the value of the assets of a company that is going out of business is the:
A. book value.
B. current market value.
C. historical cost.
D. recorded value.
Answer: B LO: 1-2 Diff: 2 EOC: P1-43A
1.2-15 The CEO of a business owns a residence in Flagstaff. The company the CEO works for owns a residence in Chandler used for strategic planning meetings by its executives. Which of these properties is considered an asset(s) of the business?
A. The Flagstaff residence only
B. The Chandler residence only
C. Both the Flagstaff and Chandler residences
D. Neither the Flagstaff nor Chandler residences
Answer: B LO: 1-2 Diff: 2 EOC: S1-3
1.2-16 An Oklahoma City business paid $15,000 cash for equipment used in the business. At the time of purchase, the equipment had a list price of $20,000. When the balance sheet was prepared, the value of the equipment later rose to $22,000. What is the relevant measure of the value of the equipment?
A. Historical cost, $15,000
B. Fair market cost, $20,000
C. Current market cost, $22,000
D. $15,000 on the day of purchase, $22,000 on balance sheet date
Answer: A LO: 1-2 Diff: 2 EOC: Q1-30
1.3-1 The accounting equation expresses the idea that Resources - Insider claims = Outsider claims.
Answer: True LO: 1-3 Diff: 3 EOC: S1-5
1.3-2 The accounting equation must always be in balance.
Answer: True LO: 1-3 Diff: 1 EOC: S1-1
1.3-3 Liabilities are divided into "outsider claims" and "insider claims."
Answer: False LO: 1-3 Diff: 2 EOC: S1-5
1.3-4 "Net assets", as stockholders’ equity is often referred to, represents the residual amount of business assets which can be claimed by the owners.
Answer: True LO: 1-3 Diff: 2 EOC: QC 12
1.3-5 Common stock and retained earnings are the main components of paid-in capital.
Answer: False LO: 1-3 Diff: 2 EOC: S1-10
1.3-6 Retained earnings do not represent cash that is available to a company for future operations and expansion.
Answer: True LO: 1-3 Diff: 3 EOC: E1-27
1.3-7 Net income appears on both the income statement and the statement of retained earnings.
Answer: True LO: 1-3 Diff: 2 EOC: Q1-39
1.3-8 The statement of cash flows is organized in terms of the organization’s operating, investing, and financing activities.
Answer: True LO: 1-3 Diff: 2 EOC: E1-25
1.3-9 Expenses are increases in retained earnings that result from operations.
Answer: False LO: 1-3 Diff: 2 EOC: S1-7
1.3-10 Dividend payments are NOT classified as expenses.
Answer: True LO: 1-3 Diff: 2 EOC: S1-9
1.3-11 The calculation of ending retained earnings considers current net income or net loss and dividends.
Answer: True LO: 1-3 Diff: 2 EOC: S1-9
1.3-12 The owners’ equity of proprietorships and partnerships is the same.
Answer: False LO: 1-3 Diff: 2 EOC: S1-9
1.3-13 The accounting equation can be stated as:
A. Assets + Stockholders’ Equity = Liabilities
B. Assets - Liabilities = Stockholders’ Equity
C. Assets = Liabilities - Stockholders’ Equity
D. Assets - Stockholders’ Equity + Liabilities = Zero
Answer: B LO: 1-3 Diff: 1 EOC: QC 3
1.3-14 Which of the following best describes a liability? Liabilities are:
A. a form of paid-in capital.
B. future economic benefits to which a company is entitled.
C. payables of the corporation.
D. economic obligations to owners to be paid at some future date by the corporation.
Answer: C LO: 1-3 Diff: 1 EOC: S1-5
1.3-15 The owners’ interest in the assets of a corporation is known as:
A. common stock.
B. stockholders’ equity.
C. long-term assets.
D. operating expenses.
Answer: B LO: 1-3 Diff: 2 EOC: S1-5
1.3-16 Claims held by the stockholders of a corporation are also known as:
A. retained earnings.
B. paid-in capital.
C. paid-in capital plus retained earnings.
D. net income.
Answer: C LO: 1-3 Diff: 3 EOC: S1-5
1.3-17 Payables are classified as:
A. increases in earnings.
B. decreases in earnings.
C. liabilities.
D. assets.
Answer: C LO: 1-3 Diff: 1 EOC: S1-6
1.3-18 Receivables are classified as:
A. increases in earnings.
B. decreases in earnings.
C. liabilities.
D. assets.
Answer: D LO: 1-3 Diff: 1 EOC: S1-6
1.3-19 The sum of "outsider claims" plus "insider claims" equals:
A. net income.
B. total liabilities.
C. total assets.
D. total stockholders’ equity.
Answer: C LO: 1-3 Diff: 3 EOC: S1-5
1.3-20 Revenues are:
A. decreases in assets resulting from delivering goods or services to customers.
B. increases in liabilities resulting from delivering goods or services to customers.
C. increases in retained earnings resulting from delivering goods or services to customers.
D. decreases in retained earnings resulting from delivering goods or services to customers.
Answer: C LO: 1-3 Diff: 2 EOC: S1-4
1.3-21 How do revenues for a period relate to the beginning and ending balances in retained earnings?
A. Revenues will increase the beginning balance of retained earnings for the period.
B. Revenues will increase the ending balance of retained earnings for the period.
C. Revenues less expenses will either increase or decrease the beginning balance of retained earnings for the period.
D. None of these answers are correct.
Answer: C LO: 1-3 Diff: 2 EOC: S1-9
1.3-22 Expenses are:
A. increases in liabilities resulting from purchasing assets.
B. increases in assets resulting from operations.
C. increases in retained earnings resulting from operations.
D. decreases in retained earnings resulting from operations.
Answer: D LO: 1-3 Diff: 2 EOC: S1-4
1.3-23 Dividends:
A. are expenses.
B. always affect net income.
C. are distributions to stockholders of assets (usually cash) generated by net income.
D. are distributions to stockholders of assets (usually cash) generated by a favorable balance in retained earnings.
Answer: C LO: 1-3 Diff: 2 EOC: E1-16
1.3-24 A corporation’s paid-in capital consists of
A. revenues and expenses.
B. assets and liabilities.
C. common stock.
D. net income.
Answer: C LO: 1-3 Diff: 2 EOC: S1-10
1.3-25 Net income is computed as:
A. revenues – expenses – dividends.
B. revenues + expenses.
C. revenues – expenses.
D. revenues – expenses + dividends.
Answer: C LO: 1-3 Diff: 2 EOC: QC 8
1.3-26 Which of the following must be added to beginning Retained Earnings to compute ending Retained Earnings?
A. Net income
B. Expenses
C. Dividends
D. All of these answers are correct.
Answer: A LO: 1-3 Diff: 2 EOC: P1-44A
1.3-27 At the end of the current accounting period, account balances were as follows: Cash, $180,000; Accounts Receivable, $75,000; Common Stock, $20,000; Retained Earnings, $65,000. Liabilities for the period were:
A. $ 70,000.
B. $170,000.
C. $190,000.
D. $210,000.
Answer: B LO: 1-3 Diff: 2 EOC: S1-1
1.3-28 On January 1, 2023, total assets for Liftoff Technologies were $125,000; on December 31, 2023, total assets were $145,000. On January 1, 2023, total liabilities were $110,000; on December 31, 2023, total liabilities were $115,000. What is the amount of the change and the direction of the change in Liftoff Technologies' stockholders’ equity for 2023?
A. Decrease of $15,000
B. Increase of $15,000
C. Increase of $30,000
D. Decrease of $30,000
Answer: B LO: 1-3 Diff: 2 EOC: QC 12
1.3-29 Revenues were $170,000, expenses were $90,000, and cash dividends were $30,000. What was the net income and the change in retained earnings for the period?
A.Net income was $50,000; change in retained earnings was $50,000
B. Net income was $80,000; change in retained earnings was $50,000
C. Net income was $80,000; change in retained earnings was $80,000
D. Net income was $250,000; change in retained earnings was $250,000
Answer: B LO: 1-3 Diff: 2 EOC: E1-23
1.3-30 At the beginning of the period, assets were $490,000 and stockholders’ equity was $240,000. During the year, assets increased by $60,000, liabilities increased by $40,000, and stockholders’ equity increased by $20,000. Beginning liabilities must have been:
A. $230,000.
B. $250,000.
C. $280,000.
D. $300,000.
Answer: B LO: 1-3 Diff: 3 EOC: S1-1
1.3-31 If assets increase $210,000 during a given period and liabilities increase $65,000 during the same period, stockholders’ equit