Taxes Quiz
d 1. Financial reports are used by
a.|management|
b.|creditors|
c.|investors|
d.|all are correct|
C 2. Which of the following is not a characteristic of a corporation?
a.|Corporations are organized as a separate legal taxable entity.|
b.|Ownership is divided into shares of stock.|
c.|Corporations experience an ease in obtaining large amounts of resources by issuing stock.|
d.|A corporation’s resources are limited to their individual stockholders’ resources.|
D 3. Which of the following are guidelines for behaving ethically?
|I.|Identify the consequences of a decision and its effect on others.|
|II.|Consider your obligations and responsibilities to those affected by the decision.|
|III.|Identify your decision based on personal standards of honesty and fairness.|
a.|I and II.|
b.|II and III.|
c.|I and III.|
d.|I, II, and III.|
B or C 4. Which of the following is not true of accounting principles?
a.|Financial accountants follow generally accepted accounting principles (GAAP).|
b.|Following GAAP allows accounting information users to compare one company to another.|
c.|A new accounting principle can be adopted with stockholders approval.|
d.|The Financial Accounting Standards Board (FASB) has primary responsibility for developing accounting principles.|
B 5. Earning revenue
a.|increases assets, increases stockholders’ equity.|
b.|increases assets, decreases stockholders’ equity|
c.|increases one asset, decreases another asset|
d.|decreases assets, increases liabilities|
a 6. At of the end of its accounting period, December 31, 2009, Great Marks Company has assets of $940,000 and liabilities of $300,000. During 2010, Great Marks sold $65,000 of capital stock and declared and paid $45,000 in dividends. What is the amount of net income during 2010, assuming that as of December 31, 2010, assets were $995,000, and liabilities were $270,000?
a.|$ 65,000|
b.|$ 50,000|
c.|$105,000|
d.|$370,000|
B 7. There are four transactions that affect Stockholders’ Equity.
a.|management|
b.|creditors|
c.|investors|
d.|all are correct|
C 2. Which of the following is not a characteristic of a corporation?
a.|Corporations are organized as a separate legal taxable entity.|
b.|Ownership is divided into shares of stock.|
c.|Corporations experience an ease in obtaining large amounts of resources by issuing stock.|
d.|A corporation’s resources are limited to their individual stockholders’ resources.|
D 3. Which of the following are guidelines for behaving ethically?
|I.|Identify the consequences of a decision and its effect on others.|
|II.|Consider your obligations and responsibilities to those affected by the decision.|
|III.|Identify your decision based on personal standards of honesty and fairness.|
a.|I and II.|
b.|II and III.|
c.|I and III.|
d.|I, II, and III.|
B or C 4. Which of the following is not true of accounting principles?
a.|Financial accountants follow generally accepted accounting principles (GAAP).|
b.|Following GAAP allows accounting information users to compare one company to another.|
c.|A new accounting principle can be adopted with stockholders approval.|
d.|The Financial Accounting Standards Board (FASB) has primary responsibility for developing accounting principles.|
B 5. Earning revenue
a.|increases assets, increases stockholders’ equity.|
b.|increases assets, decreases stockholders’ equity|
c.|increases one asset, decreases another asset|
d.|decreases assets, increases liabilities|
a 6. At of the end of its accounting period, December 31, 2009, Great Marks Company has assets of $940,000 and liabilities of $300,000. During 2010, Great Marks sold $65,000 of capital stock and declared and paid $45,000 in dividends. What is the amount of net income during 2010, assuming that as of December 31, 2010, assets were $995,000, and liabilities were $270,000?
a.|$ 65,000|
b.|$ 50,000|
c.|$105,000|
d.|$370,000|
B 7. There are four transactions that affect Stockholders’ Equity.