Accounting: Exam Questions
GBA 521
Multiple Choice
Identify the choice that best completes the statement or answers the question.
__C__ 1. Raymond Corporation reported the following information for the year ended December 31, 2012:
| Net income | $ 10,000 | | Dividends | 6,000 | | Retained earnings at December 31, 2012 | 25,000 |
What was the economic effect of the payment of Raymond’s dividends? a. | The dividend reduced net income for 2012. | b. | The dividend should be equal to net income if the company’s accounting equation is in balance. | c. | The dividends reduce total retained earnings for the year. | d. | The dividends must be paid whenever Raymond Corp. reports net income. |
__B__ 2. If a company has $152,000 of revenues, declares and pays $55,000 in dividends, and has net income of $89,000, how much were expenses for the year? a. | $ 8,000 | b. | $ 63,000 | c. | $144,000 | d. | Unable to determine the amount due to incomplete information. |
__C__ 3. T. Price Company has assets of $350,000, liabilities of $130,000, and retained earnings of $180,000. How much is total owners’ equity? a. | $ 40,000 | c. | $ 220,000 | b. | $ 170,000 | d. | $ 350,000 |
___B_ 4. The preparation of financial statements requires that the information be understandable a. | Only to CPAs. | b. | To those willing to spend the time to understand it. | c. | Only to those who take an accounting course. | d. | Only to financial analysts and brokers. |
__D__ 5. Which set of items below are current assets? a. | Accounts receivable, net income, inventory, and dividends | b. | Cash, accounts receivable, capital stock, and sales | c. | Net income, cash, office supplies, and inventory | d. | Cash, accounts receivable, inventory, and office supplies |
__B__ 6. For several years, Malcom Corporation has had a current ratio that was consistent with other companies in its industry. For the most recent year, Malcom’s current ratio
Multiple Choice
Identify the choice that best completes the statement or answers the question.
__C__ 1. Raymond Corporation reported the following information for the year ended December 31, 2012:
| Net income | $ 10,000 | | Dividends | 6,000 | | Retained earnings at December 31, 2012 | 25,000 |
What was the economic effect of the payment of Raymond’s dividends? a. | The dividend reduced net income for 2012. | b. | The dividend should be equal to net income if the company’s accounting equation is in balance. | c. | The dividends reduce total retained earnings for the year. | d. | The dividends must be paid whenever Raymond Corp. reports net income. |
__B__ 2. If a company has $152,000 of revenues, declares and pays $55,000 in dividends, and has net income of $89,000, how much were expenses for the year? a. | $ 8,000 | b. | $ 63,000 | c. | $144,000 | d. | Unable to determine the amount due to incomplete information. |
__C__ 3. T. Price Company has assets of $350,000, liabilities of $130,000, and retained earnings of $180,000. How much is total owners’ equity? a. | $ 40,000 | c. | $ 220,000 | b. | $ 170,000 | d. | $ 350,000 |
___B_ 4. The preparation of financial statements requires that the information be understandable a. | Only to CPAs. | b. | To those willing to spend the time to understand it. | c. | Only to those who take an accounting course. | d. | Only to financial analysts and brokers. |
__D__ 5. Which set of items below are current assets? a. | Accounts receivable, net income, inventory, and dividends | b. | Cash, accounts receivable, capital stock, and sales | c. | Net income, cash, office supplies, and inventory | d. | Cash, accounts receivable, inventory, and office supplies |
__B__ 6. For several years, Malcom Corporation has had a current ratio that was consistent with other companies in its industry. For the most recent year, Malcom’s current ratio