Accounting Ratio Equations
Old Exam Packet – Acct 284 Fall 2009
Exam 1 – Fall 2008
Investing activities:
a. involve day to day events like selling goods and services, which occur when running a business.
b. involve the buying or selling of land, buildings, equipment, and other longer-term investments.
c. only involve financial exchanges.
d. All of these.
Accumulated depreciation:
a. is an expense account.
b. is a liability account.
c. is a regular asset account.
d. is an asset contra-account.
At the end of last year, the company's assets totaled $860,000 and its liabilities totaled $740,000. During the current year, the company's total assets increased by $58,000 and its total liabilities increased by $24,000. At the end of the current year, stockholders' equity was
a. $154,000.
b. $120,000.
c. $34,000.
d. $178,000.
In the U.S., generally accepted accounting principles are established:
a. directly by the 1933 Securities Act.
b. by the Public Company Accounting Oversight Board.
c. by the Financial Accounting Standards Board.
d. by the Association of Certified Public Accountants.
On March 1, 2006, the premium on a two-year insurance policy on equipment was paid amounting to $1,800. At the end of 2006 (end of the accounting period), the financial statements for 2006, would report
a. Insurance expense, $750; Prepaid insurance $1,050.
b. Insurance expense, $900; Prepaid insurance $900.
c. Insurance expense, $1,800; Prepaid insurance $0.
d. Insurance expense, $0; Prepaid insurance $1,800.
Which of the following would be listed as a current liability?
a. Cash in the bank.
b. Notes payable due in two years.
c. Supplies.
d. Accounts payable.
Which of the following describes the classification and normal balance of the retained earnings account?
a. Asset, debit
b. Stockholders' equity, credit
c. Liability, credit
d. Stockholders' equity, debit
1. A company buys equipment for $500,000 and signs a promissory note for the full
Exam 1 – Fall 2008
Investing activities:
a. involve day to day events like selling goods and services, which occur when running a business.
b. involve the buying or selling of land, buildings, equipment, and other longer-term investments.
c. only involve financial exchanges.
d. All of these.
Accumulated depreciation:
a. is an expense account.
b. is a liability account.
c. is a regular asset account.
d. is an asset contra-account.
At the end of last year, the company's assets totaled $860,000 and its liabilities totaled $740,000. During the current year, the company's total assets increased by $58,000 and its total liabilities increased by $24,000. At the end of the current year, stockholders' equity was
a. $154,000.
b. $120,000.
c. $34,000.
d. $178,000.
In the U.S., generally accepted accounting principles are established:
a. directly by the 1933 Securities Act.
b. by the Public Company Accounting Oversight Board.
c. by the Financial Accounting Standards Board.
d. by the Association of Certified Public Accountants.
On March 1, 2006, the premium on a two-year insurance policy on equipment was paid amounting to $1,800. At the end of 2006 (end of the accounting period), the financial statements for 2006, would report
a. Insurance expense, $750; Prepaid insurance $1,050.
b. Insurance expense, $900; Prepaid insurance $900.
c. Insurance expense, $1,800; Prepaid insurance $0.
d. Insurance expense, $0; Prepaid insurance $1,800.
Which of the following would be listed as a current liability?
a. Cash in the bank.
b. Notes payable due in two years.
c. Supplies.
d. Accounts payable.
Which of the following describes the classification and normal balance of the retained earnings account?
a. Asset, debit
b. Stockholders' equity, credit
c. Liability, credit
d. Stockholders' equity, debit
1. A company buys equipment for $500,000 and signs a promissory note for the full