A100 Final Exam IU
Which of the following is primarily responsible for the information provided in the financial
statements? A) Board of Directors B) Internal Accounting Staff C) Company Top Management
D) External Auditors -correct answer_Company Top Management Which of the following
describes the primary objective of financial accounting? A) To provide information about a
business' future business strategies. B) To provide useful financial information only to
stockholders. C) To provide useful financial information about a business to help external
parties make informed decisions. D) To provide useful financial information about a business
to help internal parties make informed decisions. -correct answer_To provide useful financial
information about a business to help external parties make informed decisions. Financial
accounting standards are known collectively as GAAP. What does that acronym stand for? A)
Generally Authorized Auditing Principles B) Generally Applied Accounting Procedures C)
Governmentally Approved Accounting Practices D) Generally Accepted Accounting Principles
-correct answer_Generally Accepted Accounting Principles For accounting information to be
useful, it must be which of the following? A) It must be comparable and reliable. B) It must be
consistent and comparable. C) It must be a faithful representation and relevant. D) It must be
relevant and consistent. -correct answer_It must be a faithful representation and relevant.
Which of the following best describes the purpose of an audit? A) To audit every transaction
that an entity entered into. B) To establish that a corporation's stock is a sound investment. C)
To prove the accuracy of an entity's financial statements. D) To lend credibility to an entity's
financial statements. -correct answer_To lend credibility to an entity's financial statements.
Which of the following is considered to be an expense on the income statement? A)Prepaid
Expenses. B)Wages payable. C)Notes payable. D)Cost of goods sold. -correct answer_Cost
of goods sold. At the beginning of 2020, a corporation had assets of $270,000 and liabilities of
$160,000. During 2020, assets increased $25,000 and liabilities increased $5,000. What was
stockholders' equity at December 31, 2020? A) $130,000. B) $190,000. C) $140,000. D)
$80,000. -correct answer_$130,000. Which of the following would not be reported in the
operating activities section of a cash flow statement? A) Cash paid for interest expense. B)
Cash paid for dividends to stockholders. C) Cash paid for employee wages. D) Cash received
from customers. -correct answer_Cash paid for dividends to stockholders. Seitz Trucking's
retained earnings increased $20,000 during the current year. What was Seitz Trucking's
current year net income or loss given that Seitz Trucking declared $25,000 of dividends during
this year? A) Net loss was $5,000. B) Net loss was $45,000. C) Net income was $45,000. D)
Net income was $5,000. -correct answer_Net income was $45,000. Which of the following
correctly describes the various financial statements? A) The balance sheet is a financial
statement that covers a period of time. B) The statement of stockholders' equity is a financial
statement at a specific point in time. C) The cash flow statement is a financial statement at a
specific point in time. D) An income statement covers a period of time. -correct answer_An
income statement covers a period of time. A company purchased supplies for cash, which will
, be consumed during future months. Which of the following correctly describes the impact of
the supplies purchase on the financial statements? A) Operating expenses will increase. B)
Operating income will decrease. C) Total assets will decrease. D) Total assets will remain
unchanged. -correct answer_Total assets will remain unchanged. Recognizing an expense
may be accompanied by which of the following? A) An increase in assets B) A decrease in
revenue C) A decrease in assets D) A decrease in liabilities -correct answer_A decrease in
assets Which of the following transactions will result in an increase in operating income as of
the date of the transaction? A) The receipt of cash dividends from an investment. B) Collection
of cash from a customer for services to be provided at a later date. C) Providing a service to a
customer on account. D) The sale of investments at a gain -correct answer_Providing a
service to a customer on account. On January 1, Year 1, Seitz Trucking paid $155,000 to
purchase a truck. The truck was expected to have a four-year useful life and a $20,000
salvage value. If ST uses the straight-line method, the amount of net book value shown on the
Year 1 balance sheet is: A) $33,750 B) $121,250 C) $155,000 D) $135,000 -correct
answer_$121,250 Hoosier Company experienced an accounting event that affected its
financial statements as indicated below. - Increase in Assets & - Increase in Equity & -
Increase in Financing Cash Flows Which of the following accounting events could have
caused these effects on the elements of Hoosier's financial statements? A) Borrowed money
from a bank B) Earned cash revenue C) Paid a cash dividend D) Issued common stock
-correct answer_Issued common stock Direct costs: A) can be easily traced to a particular cost
object. B) are incurred to benefit a particular accounting period. C) are the variable costs of
producing a product. D) are incurred due to a specific decision. -correct answer_can be easily
traced to a particular cost object. Manufacturing overhead includes: A) all manufacturing costs
except direct labor. B) all selling and administrative costs. C) all direct material, direct labor
and administrative costs. D) all manufacturing costs except direct labor and direct materials.
-correct answer_all manufacturing costs except direct labor and direct materials. Calvin Corp.,
a merchandising company, reported the following results for November:Sales $4,096,400 Cost
of goods sold (all variable) $2,194,500 Total variable selling expense $238,700 Total fixed
selling expense $144,700 Total variable administrative expense $238,700 Total fixed
administrative expense $282,900 The contribution margin for November is: A) $1,424,500 B)
$1,901,900 C) $996,900 D) $3,191,400 -correct answer_$1,424,500 The salary paid to the
president of a company would best be classified on the income statement as a(n): A) direct
labor cost. B) product cost. C) period cost. D) manufacturing overhead cost. -correct
answer_period cost. Which of the following is true? A) Variable costs per unit will vary
depending on the level of production. B) Fixed costs per unit always stay the same. C) Total
fixed costs plus total variable costs will always equal total sales. D) The contribution margin
will always equal fixed costs plus net income. -correct answer_The contribution margin will
always equal fixed costs plus net income. A $3.00 increase in a product's variable expense per
unit accompanied by a $3.00 increase in its selling price per unit will: A) have no effect on the
break-even volume. B) have no effect on the contribution margin ratio. C) none of these
Which of the following is primarily responsible for the information provided in the financial
statements? A) Board of Directors B) Internal Accounting Staff C) Company Top Management
D) External Auditors -correct answer_Company Top Management Which of the following
describes the primary objective of financial accounting? A) To provide information about a
business' future business strategies. B) To provide useful financial information only to
stockholders. C) To provide useful financial information about a business to help external
parties make informed decisions. D) To provide useful financial information about a business
to help internal parties make informed decisions. -correct answer_To provide useful financial
information about a business to help external parties make informed decisions. Financial
accounting standards are known collectively as GAAP. What does that acronym stand for? A)
Generally Authorized Auditing Principles B) Generally Applied Accounting Procedures C)
Governmentally Approved Accounting Practices D) Generally Accepted Accounting Principles
-correct answer_Generally Accepted Accounting Principles For accounting information to be
useful, it must be which of the following? A) It must be comparable and reliable. B) It must be
consistent and comparable. C) It must be a faithful representation and relevant. D) It must be
relevant and consistent. -correct answer_It must be a faithful representation and relevant.
Which of the following best describes the purpose of an audit? A) To audit every transaction
that an entity entered into. B) To establish that a corporation's stock is a sound investment. C)
To prove the accuracy of an entity's financial statements. D) To lend credibility to an entity's
financial statements. -correct answer_To lend credibility to an entity's financial statements.
Which of the following is considered to be an expense on the income statement? A)Prepaid
Expenses. B)Wages payable. C)Notes payable. D)Cost of goods sold. -correct answer_Cost
of goods sold. At the beginning of 2020, a corporation had assets of $270,000 and liabilities of
$160,000. During 2020, assets increased $25,000 and liabilities increased $5,000. What was
stockholders' equity at December 31, 2020? A) $130,000. B) $190,000. C) $140,000. D)
$80,000. -correct answer_$130,000. Which of the following would not be reported in the
operating activities section of a cash flow statement? A) Cash paid for interest expense. B)
Cash paid for dividends to stockholders. C) Cash paid for employee wages. D) Cash received
from customers. -correct answer_Cash paid for dividends to stockholders. Seitz Trucking's
retained earnings increased $20,000 during the current year. What was Seitz Trucking's
current year net income or loss given that Seitz Trucking declared $25,000 of dividends during
this year? A) Net loss was $5,000. B) Net loss was $45,000. C) Net income was $45,000. D)
Net income was $5,000. -correct answer_Net income was $45,000. Which of the following
correctly describes the various financial statements? A) The balance sheet is a financial
statement that covers a period of time. B) The statement of stockholders' equity is a financial
statement at a specific point in time. C) The cash flow statement is a financial statement at a
specific point in time. D) An income statement covers a period of time. -correct answer_An
income statement covers a period of time. A company purchased supplies for cash, which will
, be consumed during future months. Which of the following correctly describes the impact of
the supplies purchase on the financial statements? A) Operating expenses will increase. B)
Operating income will decrease. C) Total assets will decrease. D) Total assets will remain
unchanged. -correct answer_Total assets will remain unchanged. Recognizing an expense
may be accompanied by which of the following? A) An increase in assets B) A decrease in
revenue C) A decrease in assets D) A decrease in liabilities -correct answer_A decrease in
assets Which of the following transactions will result in an increase in operating income as of
the date of the transaction? A) The receipt of cash dividends from an investment. B) Collection
of cash from a customer for services to be provided at a later date. C) Providing a service to a
customer on account. D) The sale of investments at a gain -correct answer_Providing a
service to a customer on account. On January 1, Year 1, Seitz Trucking paid $155,000 to
purchase a truck. The truck was expected to have a four-year useful life and a $20,000
salvage value. If ST uses the straight-line method, the amount of net book value shown on the
Year 1 balance sheet is: A) $33,750 B) $121,250 C) $155,000 D) $135,000 -correct
answer_$121,250 Hoosier Company experienced an accounting event that affected its
financial statements as indicated below. - Increase in Assets & - Increase in Equity & -
Increase in Financing Cash Flows Which of the following accounting events could have
caused these effects on the elements of Hoosier's financial statements? A) Borrowed money
from a bank B) Earned cash revenue C) Paid a cash dividend D) Issued common stock
-correct answer_Issued common stock Direct costs: A) can be easily traced to a particular cost
object. B) are incurred to benefit a particular accounting period. C) are the variable costs of
producing a product. D) are incurred due to a specific decision. -correct answer_can be easily
traced to a particular cost object. Manufacturing overhead includes: A) all manufacturing costs
except direct labor. B) all selling and administrative costs. C) all direct material, direct labor
and administrative costs. D) all manufacturing costs except direct labor and direct materials.
-correct answer_all manufacturing costs except direct labor and direct materials. Calvin Corp.,
a merchandising company, reported the following results for November:Sales $4,096,400 Cost
of goods sold (all variable) $2,194,500 Total variable selling expense $238,700 Total fixed
selling expense $144,700 Total variable administrative expense $238,700 Total fixed
administrative expense $282,900 The contribution margin for November is: A) $1,424,500 B)
$1,901,900 C) $996,900 D) $3,191,400 -correct answer_$1,424,500 The salary paid to the
president of a company would best be classified on the income statement as a(n): A) direct
labor cost. B) product cost. C) period cost. D) manufacturing overhead cost. -correct
answer_period cost. Which of the following is true? A) Variable costs per unit will vary
depending on the level of production. B) Fixed costs per unit always stay the same. C) Total
fixed costs plus total variable costs will always equal total sales. D) The contribution margin
will always equal fixed costs plus net income. -correct answer_The contribution margin will
always equal fixed costs plus net income. A $3.00 increase in a product's variable expense per
unit accompanied by a $3.00 increase in its selling price per unit will: A) have no effect on the
break-even volume. B) have no effect on the contribution margin ratio. C) none of these
