ACG 3111 EXAM STUDY GUIDE WITH
CORRECT SOLUTION
The change in equity of a business enterprise during a period from transactions and
other events and circumstances from nonowner sources is called
distributions to owners.
assets.
net income.
comprehensive income. - ANSWER comprehensive income.
Net assets equals
assets plus liabilities.
shareholders' equity.
retained earnings.
liabilities plus stockholders' equity.
common stock. - ANSWER shareholders' equity.
Which of the following accurately describes shareholders' equity?
Proceeds from the issuance of bonds
Ownership interests of the shareholders
Amounts owed to shareholders
Amounts repaid to investors - ANSWER Ownership interests of the shareholders
Select all that apply
Which of the following accounts are classified as shareholders' equity?
Net unrealized holding gains on investments
Investments in securities
Preferred stock
Additional paid-in capital - ANSWER Net unrealized holding gains on investments
,Preferred stock
Additional paid-in capital
Select all that apply
Which of the following may be a source of paid-in capital? (Select all that apply.)
Company generates profit from its operations
Company repurchases some of its outstanding common stock
Company sells stock to investors
Share-based compensation activities - ANSWER Company repurchases some of its
outstanding common stock
Company sells stock to investors
Share-based compensation activities
Comprehensive income is the change in equity of a business enterprise during a period
from transactions and other events and circumstances from what type of sources?
Investor
Nonowner
Owner - ANSWER Nonowner
Retained earnings is typically reported on the balance sheet
as a single amount.
as a multi-line item.
showing its various components. - ANSWER as a single amount.
Net assets is
retained earnings.
liabilities plus stockholders' equity.
assets plus liabilities.
assets less liabilities. - ANSWER assets less liabilities.
The ownership interests of the investors in a corporation are referred to as
retained earnings.
shareholders' equity.
, net income.
assets. - ANSWER shareholders' equity.
Shares of stock previously sold by the corporation that are repurchased are called
available for sale securities.
treasury stock.
additional paid-in capital.
investments in securities. - ANSWER treasury stock.
Which of the following accounts are classified as shareholders' equity?
investments in securities
additional paid-in capital
retained earnings
common stock - ANSWER additional paid-in capital
retained earnings
common stock
The purpose of the statement of shareholders' equity is to
reconcile net income with taxable income and retained earnings.
report the additional expenses of the company that were not accrued during the year.
reconcile the balance sheet with the statement of cash flows.
report the changes and the sources of the changes in shareholder equity accounts. -
ANSWER report the changes and the sources of the changes in shareholder equity
accounts.
True or false: When investors purchase shares of stock from a corporation, it is
recorded by the corporation as investments in securities. - ANSWER false
Amounts earned by the corporation on behalf of its shareholders are referred to as
common stock.
paid-in capital.
shareholders' equity.
retained earnings. - ANSWER retained earnings.
CORRECT SOLUTION
The change in equity of a business enterprise during a period from transactions and
other events and circumstances from nonowner sources is called
distributions to owners.
assets.
net income.
comprehensive income. - ANSWER comprehensive income.
Net assets equals
assets plus liabilities.
shareholders' equity.
retained earnings.
liabilities plus stockholders' equity.
common stock. - ANSWER shareholders' equity.
Which of the following accurately describes shareholders' equity?
Proceeds from the issuance of bonds
Ownership interests of the shareholders
Amounts owed to shareholders
Amounts repaid to investors - ANSWER Ownership interests of the shareholders
Select all that apply
Which of the following accounts are classified as shareholders' equity?
Net unrealized holding gains on investments
Investments in securities
Preferred stock
Additional paid-in capital - ANSWER Net unrealized holding gains on investments
,Preferred stock
Additional paid-in capital
Select all that apply
Which of the following may be a source of paid-in capital? (Select all that apply.)
Company generates profit from its operations
Company repurchases some of its outstanding common stock
Company sells stock to investors
Share-based compensation activities - ANSWER Company repurchases some of its
outstanding common stock
Company sells stock to investors
Share-based compensation activities
Comprehensive income is the change in equity of a business enterprise during a period
from transactions and other events and circumstances from what type of sources?
Investor
Nonowner
Owner - ANSWER Nonowner
Retained earnings is typically reported on the balance sheet
as a single amount.
as a multi-line item.
showing its various components. - ANSWER as a single amount.
Net assets is
retained earnings.
liabilities plus stockholders' equity.
assets plus liabilities.
assets less liabilities. - ANSWER assets less liabilities.
The ownership interests of the investors in a corporation are referred to as
retained earnings.
shareholders' equity.
, net income.
assets. - ANSWER shareholders' equity.
Shares of stock previously sold by the corporation that are repurchased are called
available for sale securities.
treasury stock.
additional paid-in capital.
investments in securities. - ANSWER treasury stock.
Which of the following accounts are classified as shareholders' equity?
investments in securities
additional paid-in capital
retained earnings
common stock - ANSWER additional paid-in capital
retained earnings
common stock
The purpose of the statement of shareholders' equity is to
reconcile net income with taxable income and retained earnings.
report the additional expenses of the company that were not accrued during the year.
reconcile the balance sheet with the statement of cash flows.
report the changes and the sources of the changes in shareholder equity accounts. -
ANSWER report the changes and the sources of the changes in shareholder equity
accounts.
True or false: When investors purchase shares of stock from a corporation, it is
recorded by the corporation as investments in securities. - ANSWER false
Amounts earned by the corporation on behalf of its shareholders are referred to as
common stock.
paid-in capital.
shareholders' equity.
retained earnings. - ANSWER retained earnings.
