,DOWNLOAD THE Test Bank for Accounting What the Numbers Mean 11th
Edition Marshall
Chapter 02
Financial Statements and Accounting Concepts/Principles
Multiple Choice Questions
1. Which of the following is not a transaction to be recorded in the accounting records of an entity?
A. Investment of cash by the owners.
B. Sale of product to customers.
C. Receipt of a plaque recognizing the firm's encouragement of employee participation in the
United Way fund drive.
D. Receipt of services from a "quick-print" shop in exchange for the promise to provide
advertising design services of equivalent value.
2. The balance sheet might also be called:
A. Statement of Financial Position.
B. Statement of Assets.
C. Statement of Changes in Financial Position.
D. None of the above.
3. Transactions are summarized in:
A. The notes for the financial statements.
B. The independent auditor's opinion letter.
C. The entity's accounts.
D. None of the above.
2-1
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
mynursytest.store
,DOWNLOAD THE Test Bank for Accounting What the Numbers Mean 11th
Edition Marshall
4. A fiscal year:
A. is always the same as the calendar year.
B. is frequently selected based on the firm's operating cycle.
C. must always end on the same date each year.
D. must end on the last day of a month.
5. Which of the following is not a principal form of business organization?
A. Partnership.
B. Sole proprietorship.
C. Limited unregistered business.
D. Corporation.
E. None of the above.
6. The time frame associated with a balance sheet is:
A. a point in time in the past.
B. a one-year past period of time.
C. a single date in the future.
D. a function of the information included in it.
7. Current U.S. Generally Accepted Accounting Principles and auditing standards require the
financial statements of an entity for the reporting period to include:
A. Earnings and gross receipts of cash for the period.
B. Projected earnings for the subsequent period.
C. Financial position at the end of the period.
D. Current fair values of all assets at the end of the period.
2-2
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
mynursytest.store
, DOWNLOAD THE Test Bank for Accounting What the Numbers Mean 11th
Edition Marshall
8. The balance sheet equation can be represented by:
A. Assets = Liabilities + Stockholders' Equity
B. Assets - Liabilities = Stockholders' Equity
C. Net Assets = Stockholders' Equity
D. All of the above.
9. Stockholders' equity refers to which of the following?
A. A listing of the organization's assets and liabilities.
B. The ownership right of the stockholder(s) of the entity.
C. Probable future sacrifices of economic benefits.
D. All of the above.
E. None of the above.
10. Accumulated depreciation on a balance sheet:
A. is part of stockholders' equity.
B. represents the portion of the cost of an asset that is assumed to have been "used up" in the
process of operating the business.
C. represents cash that will be used to replace worn out equipment.
D. recognizes the economic loss in value of an asset because of its age or use.
11. The distinction between a current asset and other assets:
A. is based on how long the asset has been owned.
B. is based on amounts that will be paid to other entities within a year.
C. is based on the ability to determine the current fair value of the asset.
D. is based on when the asset is expected to be converted to cash, or used to benefit the entity.
2-3
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
mynursytest.store
Edition Marshall
Chapter 02
Financial Statements and Accounting Concepts/Principles
Multiple Choice Questions
1. Which of the following is not a transaction to be recorded in the accounting records of an entity?
A. Investment of cash by the owners.
B. Sale of product to customers.
C. Receipt of a plaque recognizing the firm's encouragement of employee participation in the
United Way fund drive.
D. Receipt of services from a "quick-print" shop in exchange for the promise to provide
advertising design services of equivalent value.
2. The balance sheet might also be called:
A. Statement of Financial Position.
B. Statement of Assets.
C. Statement of Changes in Financial Position.
D. None of the above.
3. Transactions are summarized in:
A. The notes for the financial statements.
B. The independent auditor's opinion letter.
C. The entity's accounts.
D. None of the above.
2-1
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
mynursytest.store
,DOWNLOAD THE Test Bank for Accounting What the Numbers Mean 11th
Edition Marshall
4. A fiscal year:
A. is always the same as the calendar year.
B. is frequently selected based on the firm's operating cycle.
C. must always end on the same date each year.
D. must end on the last day of a month.
5. Which of the following is not a principal form of business organization?
A. Partnership.
B. Sole proprietorship.
C. Limited unregistered business.
D. Corporation.
E. None of the above.
6. The time frame associated with a balance sheet is:
A. a point in time in the past.
B. a one-year past period of time.
C. a single date in the future.
D. a function of the information included in it.
7. Current U.S. Generally Accepted Accounting Principles and auditing standards require the
financial statements of an entity for the reporting period to include:
A. Earnings and gross receipts of cash for the period.
B. Projected earnings for the subsequent period.
C. Financial position at the end of the period.
D. Current fair values of all assets at the end of the period.
2-2
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
mynursytest.store
, DOWNLOAD THE Test Bank for Accounting What the Numbers Mean 11th
Edition Marshall
8. The balance sheet equation can be represented by:
A. Assets = Liabilities + Stockholders' Equity
B. Assets - Liabilities = Stockholders' Equity
C. Net Assets = Stockholders' Equity
D. All of the above.
9. Stockholders' equity refers to which of the following?
A. A listing of the organization's assets and liabilities.
B. The ownership right of the stockholder(s) of the entity.
C. Probable future sacrifices of economic benefits.
D. All of the above.
E. None of the above.
10. Accumulated depreciation on a balance sheet:
A. is part of stockholders' equity.
B. represents the portion of the cost of an asset that is assumed to have been "used up" in the
process of operating the business.
C. represents cash that will be used to replace worn out equipment.
D. recognizes the economic loss in value of an asset because of its age or use.
11. The distinction between a current asset and other assets:
A. is based on how long the asset has been owned.
B. is based on amounts that will be paid to other entities within a year.
C. is based on the ability to determine the current fair value of the asset.
D. is based on when the asset is expected to be converted to cash, or used to benefit the entity.
2-3
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
mynursytest.store
