1|Page
MGMT 200 EXAM 1 (PURDUE UNIVERSITY) NEWEST
2026/2027 EXAM 1 AND PRACTICE EXAM 250 QUESTIONS
AND CORRECT DETAILED ANSWERS (VERIFIED ANSWERS)
|ALREADY GRADED A+||JUST OUT!!!
Transfer of ownership will not affect the continuity of a A.
corporation or partnership B. corporation C. partnership D. sole
proprietorship - ANSWER-B
Which business form has the advantage of limited liability? A.
Corporation B. Sole proprietorship C. Partnership D. All business
forms share equal limited liability - ANSWER-A
Which of the following is an operating activity? A. Issuing
common stock. B. Paying dividends. C. Borrowing cash from a
bank to acquire a factory. D. Paying electricity bills for the
month. - ANSWER-D
Financing activities include: A. The purchase of a building. B.
Issuing common stock to stockholders. C. Transactions with
company employees. D. Selling goods or services to customers.
- ANSWER-B
How many of the following transactions are operating
activities? 1. Borrowed $50,000 from the bank 2. Purchased
,2|Page
$12,000 in supplies 3. Provide services to customers for
$27,000 4. Paid the utility bill of $750 5. Purchased a delivery
truck for $12,000 6. Received $25,000 from issuing common
stock A. One. B. Two C. Three D. Four - ANSWER-C
Transactions related to the primary business activities of the
company, such as selling goods and services to customers, are
referred to as: A. Investing activities. B. Operating activities. C.
Management activities. D. Financing activities. - ANSWER-B
Amalgamated Company engages in the following cash
payments:
What is the total amount of cash paid for operating activities?
A. $1,500 B. $500 C. $6,000. D. $2,000 E. $7,000
Paiddividends to owners $2,000 Paid rent 500 Repay loan to
the bank 5,000 Purchaseequipment 1,000 - ANSWER-B
The equation best describing the income statement is: A.
Revenues ‐Expenses = Income B. Assets = Revenues -Expenses
C. Assets = Liabilities + Stockholders' Equity D. Revenues +
Expenses = Income - ANSWER-A
,3|Page
The costs related to rent, utilities, and salaries in the current
reporting period are examples of liabilities. A. True B. False -
ANSWER-B
Which of the following items would not appear in an income
statement? A. Salaries expense B. Service revenue C. Cash D.
Advertising expense - ANSWER-C
Which of the following best explains the meaning of total
stockholders' equity? A. The difference between total revenues
and total expenses, less dividends for the year. B. The amount
of common stock less dividends over the life of the company. C.
All revenues, expenses, and dividends over the life of the
company. D. The amount of capital invested by stockholders
plus profits retained over the life of the company. - ANSWER-D
The statement of changes in stockholders' equity is a financial
statement that summarizes stockholders' equity at a point in
time. A. True B. False - ANSWER-B
summarizes the changes in stockholders' equity over an
interval of time
, 4|Page
Given the information below about Royce Corporation, what
was the amount of dividends the company paid in the current
period?
A. $13,000 B. $110,000 C. $28,000 D. $18,000
Beginning retained earnings $54,000 Ending retained earnings
$110,000 Decrease in cash $10,000 Income $84,000 Change in
stockholders' equity $15,000 - ANSWER-C
Beginning R/E $ 54,000 Income 84,000 138,000 Less dividends
(28,000) Ending R/E $110,000
Retained earnings at the end of the year is calculated using: A.
Beginning retained earnings, income, and dividends. B.
Common stock and dividends. C. Stockholders' equity, income,
and dividends. D. Income and dividends. - ANSWER-A
Which of the following accounts represents a resource of the
company? A. Common stock. B. Service revenue. C. Accounts
receivable. D. Supplies expense. - ANSWER-C
Amounts due from customers
Amounts owed to suppliers for supplies purchased on account
are defined as a(n): A. Revenue. B. Asset. C. Liability. D.
Expense. - ANSWER-C
MGMT 200 EXAM 1 (PURDUE UNIVERSITY) NEWEST
2026/2027 EXAM 1 AND PRACTICE EXAM 250 QUESTIONS
AND CORRECT DETAILED ANSWERS (VERIFIED ANSWERS)
|ALREADY GRADED A+||JUST OUT!!!
Transfer of ownership will not affect the continuity of a A.
corporation or partnership B. corporation C. partnership D. sole
proprietorship - ANSWER-B
Which business form has the advantage of limited liability? A.
Corporation B. Sole proprietorship C. Partnership D. All business
forms share equal limited liability - ANSWER-A
Which of the following is an operating activity? A. Issuing
common stock. B. Paying dividends. C. Borrowing cash from a
bank to acquire a factory. D. Paying electricity bills for the
month. - ANSWER-D
Financing activities include: A. The purchase of a building. B.
Issuing common stock to stockholders. C. Transactions with
company employees. D. Selling goods or services to customers.
- ANSWER-B
How many of the following transactions are operating
activities? 1. Borrowed $50,000 from the bank 2. Purchased
,2|Page
$12,000 in supplies 3. Provide services to customers for
$27,000 4. Paid the utility bill of $750 5. Purchased a delivery
truck for $12,000 6. Received $25,000 from issuing common
stock A. One. B. Two C. Three D. Four - ANSWER-C
Transactions related to the primary business activities of the
company, such as selling goods and services to customers, are
referred to as: A. Investing activities. B. Operating activities. C.
Management activities. D. Financing activities. - ANSWER-B
Amalgamated Company engages in the following cash
payments:
What is the total amount of cash paid for operating activities?
A. $1,500 B. $500 C. $6,000. D. $2,000 E. $7,000
Paiddividends to owners $2,000 Paid rent 500 Repay loan to
the bank 5,000 Purchaseequipment 1,000 - ANSWER-B
The equation best describing the income statement is: A.
Revenues ‐Expenses = Income B. Assets = Revenues -Expenses
C. Assets = Liabilities + Stockholders' Equity D. Revenues +
Expenses = Income - ANSWER-A
,3|Page
The costs related to rent, utilities, and salaries in the current
reporting period are examples of liabilities. A. True B. False -
ANSWER-B
Which of the following items would not appear in an income
statement? A. Salaries expense B. Service revenue C. Cash D.
Advertising expense - ANSWER-C
Which of the following best explains the meaning of total
stockholders' equity? A. The difference between total revenues
and total expenses, less dividends for the year. B. The amount
of common stock less dividends over the life of the company. C.
All revenues, expenses, and dividends over the life of the
company. D. The amount of capital invested by stockholders
plus profits retained over the life of the company. - ANSWER-D
The statement of changes in stockholders' equity is a financial
statement that summarizes stockholders' equity at a point in
time. A. True B. False - ANSWER-B
summarizes the changes in stockholders' equity over an
interval of time
, 4|Page
Given the information below about Royce Corporation, what
was the amount of dividends the company paid in the current
period?
A. $13,000 B. $110,000 C. $28,000 D. $18,000
Beginning retained earnings $54,000 Ending retained earnings
$110,000 Decrease in cash $10,000 Income $84,000 Change in
stockholders' equity $15,000 - ANSWER-C
Beginning R/E $ 54,000 Income 84,000 138,000 Less dividends
(28,000) Ending R/E $110,000
Retained earnings at the end of the year is calculated using: A.
Beginning retained earnings, income, and dividends. B.
Common stock and dividends. C. Stockholders' equity, income,
and dividends. D. Income and dividends. - ANSWER-A
Which of the following accounts represents a resource of the
company? A. Common stock. B. Service revenue. C. Accounts
receivable. D. Supplies expense. - ANSWER-C
Amounts due from customers
Amounts owed to suppliers for supplies purchased on account
are defined as a(n): A. Revenue. B. Asset. C. Liability. D.
Expense. - ANSWER-C
