SOLUTION MANUAL FOR FINANCIAL
ACCOUNTING 12TH EDITION ACTUAL TEST
PAPER SOLVED QUESTIONS
◉ Preparing a production plan would be an example of:
tax accounting
managerial accounting
financial accounting
none of these.
Answer: Managerial accounting
◉ The capital stock account combined with the retained earnings
account reflects the valuation the open market places on the
company. T/F.
Answer: False
◉ Current assets are properly listed in order of liquidity on a
balance sheet as shown in the following example: cash, accounts
receivable, prepaid insurance, inventory. T/F.
Answer: False
,◉ Capital stock represents the markets value of the company. T/F.
Answer: False
◉ The financial position at the end of a period is reflected on the:
income statement
balance sheet
statement of retained earning
none.
Answer: balance sheet
◉ Which of the following statements represents a flow concept?
Balance sheet
statement of retained earnings
inventory statement
none.
Answer: none
◉ Arrow Inc was incorporated in 1904. Land was purchased at that
time for $10,000. This same land would be carried on the balance
sheet of Arrow, Inc in 2004 as $10,000. T/F.
,Answer: True
◉ Which of the following accounts represents the original
investment of the shareholders?
Capital stock
Retained earnings
Liabilities
Assets
None.
Answer: Capital Stock
◉ The balance maintained in a checking account (also called a
demand deposit or DDA account) is considered a part of a
company's cash account. T/F.
Answer: True
◉ Which of the following is a snapshot of the financial position of
the company?
Income statement
statement of retained earnings
cash flow statement
, inventory statement
none.
Answer: None - balance sheet
◉ Prepaid items have already been converted to cash and therefore
are the most liquid items in the current assets portion go the
balance sheet. T/F.
Answer: FALSE
◉ Blueline Inc had $10,000 in credit sales. The credit entry is to:
Retained earnings
Accounts payable
Accounts receivable
Cash
non.
Answer: Retained earnings
◉ Total debits = total credits T/F.
Answer: True
ACCOUNTING 12TH EDITION ACTUAL TEST
PAPER SOLVED QUESTIONS
◉ Preparing a production plan would be an example of:
tax accounting
managerial accounting
financial accounting
none of these.
Answer: Managerial accounting
◉ The capital stock account combined with the retained earnings
account reflects the valuation the open market places on the
company. T/F.
Answer: False
◉ Current assets are properly listed in order of liquidity on a
balance sheet as shown in the following example: cash, accounts
receivable, prepaid insurance, inventory. T/F.
Answer: False
,◉ Capital stock represents the markets value of the company. T/F.
Answer: False
◉ The financial position at the end of a period is reflected on the:
income statement
balance sheet
statement of retained earning
none.
Answer: balance sheet
◉ Which of the following statements represents a flow concept?
Balance sheet
statement of retained earnings
inventory statement
none.
Answer: none
◉ Arrow Inc was incorporated in 1904. Land was purchased at that
time for $10,000. This same land would be carried on the balance
sheet of Arrow, Inc in 2004 as $10,000. T/F.
,Answer: True
◉ Which of the following accounts represents the original
investment of the shareholders?
Capital stock
Retained earnings
Liabilities
Assets
None.
Answer: Capital Stock
◉ The balance maintained in a checking account (also called a
demand deposit or DDA account) is considered a part of a
company's cash account. T/F.
Answer: True
◉ Which of the following is a snapshot of the financial position of
the company?
Income statement
statement of retained earnings
cash flow statement
, inventory statement
none.
Answer: None - balance sheet
◉ Prepaid items have already been converted to cash and therefore
are the most liquid items in the current assets portion go the
balance sheet. T/F.
Answer: FALSE
◉ Blueline Inc had $10,000 in credit sales. The credit entry is to:
Retained earnings
Accounts payable
Accounts receivable
Cash
non.
Answer: Retained earnings
◉ Total debits = total credits T/F.
Answer: True
