D102 PRACTICE QUESTIONS
What is a balance sheet? - Answer-Report of the assets, liabilities, and equity of a
company as of a point in time
Which item is a liability? - Answer-Accounts payable
Which item is an owners' equity item? - Answer-Retained earnings
Which statement best describes the main features of inventories? - Answer-Goods
purchased and held for sale
What is a classified balance sheet? - Answer-A balance sheet that distinguishes
between current and long-term assets
What does owners' equity represent? - Answer-The difference between total assets
and total liabilities
For most companies, when assets or liabilities are classified as "current" on the
balance sheet, it generally means the related assets or liabilities will be turned into
cash or will be required to be paid, respectively, within what time frame? - Answer-
The next year
Which is the proper description of the accounting equation? - Answer-Assets =
Liabilities + Owners' Equity
After the effects of every transaction are considered and recorded, what must the
accounting equation do? - Answer-Equal itself, or balance
What is owners' equity? - Answer-A residual amount representing the net assets
available after all obligations have been satisfied
Which item is an asset? - Answer-Accounts receivable
According to the accounting equation, what is the correct computation of owners'
equity? - Answer-Total Assets - Liabilities
What is an accurate description of accounts payable? - Answer-Obligation arising
from the purchase of inventory on account
Bullzai Company's financial records include these accounts at the end of the year:
Land
Accounts Receivable
Buildings
Inventory
, Loans Payable
Accounts Payable
Retained Earnings
Capital Stock
Cash
Which set of items composes a complete listing of Bullzai's current assets? -
Answer-Cash, accounts receivable, and inventory
What is an example of an expense that fits under the heading "selling, general, and
administrative expense"? - Answer-Wages of company headquarters accounting
staff
Which item is a revenue item? - Answer-Sales
What is an income statement? - Answer-Report of the revenues and expenses of a
company during a period
What is depreciation expense? - Answer-The amount of wear and tear on long-lived
assets during the year
Which are components of an income statement? - Answer-Revenue and expenses
What is net income? - Answer-The amount by which revenues exceed expenses
How is earnings per share (EPS) computed? - Answer-Net income divided by the
number of shares
What is bad debt expense? - Answer-Amount of uncollectible accounts created by
credit sales during the year
Which item is an expense item? - Answer-Cost of Goods Sold
What is a single-step income statement? - Answer-Groups and total revenues;
groups and total expenses
What is "gross profit"? - Answer-Sales − Cost of Goods Sold.
What is a company's gross profit percentage? - Answer-Gross Profit ÷ Sales
What is a statement of cash flows? - Answer-Report of the operating, investing, and
financing cash flows of a company during a period.
What are financing activities? - Answer-Those activities whereby cash is obtained
from or repaid to owners and creditors.
What are the major activities in the cash flow statement? - Answer-Financing,
operating, and investing
Which of these items is a use of cash in a financing activity? - Answer-Repaying
loans
What is a balance sheet? - Answer-Report of the assets, liabilities, and equity of a
company as of a point in time
Which item is a liability? - Answer-Accounts payable
Which item is an owners' equity item? - Answer-Retained earnings
Which statement best describes the main features of inventories? - Answer-Goods
purchased and held for sale
What is a classified balance sheet? - Answer-A balance sheet that distinguishes
between current and long-term assets
What does owners' equity represent? - Answer-The difference between total assets
and total liabilities
For most companies, when assets or liabilities are classified as "current" on the
balance sheet, it generally means the related assets or liabilities will be turned into
cash or will be required to be paid, respectively, within what time frame? - Answer-
The next year
Which is the proper description of the accounting equation? - Answer-Assets =
Liabilities + Owners' Equity
After the effects of every transaction are considered and recorded, what must the
accounting equation do? - Answer-Equal itself, or balance
What is owners' equity? - Answer-A residual amount representing the net assets
available after all obligations have been satisfied
Which item is an asset? - Answer-Accounts receivable
According to the accounting equation, what is the correct computation of owners'
equity? - Answer-Total Assets - Liabilities
What is an accurate description of accounts payable? - Answer-Obligation arising
from the purchase of inventory on account
Bullzai Company's financial records include these accounts at the end of the year:
Land
Accounts Receivable
Buildings
Inventory
, Loans Payable
Accounts Payable
Retained Earnings
Capital Stock
Cash
Which set of items composes a complete listing of Bullzai's current assets? -
Answer-Cash, accounts receivable, and inventory
What is an example of an expense that fits under the heading "selling, general, and
administrative expense"? - Answer-Wages of company headquarters accounting
staff
Which item is a revenue item? - Answer-Sales
What is an income statement? - Answer-Report of the revenues and expenses of a
company during a period
What is depreciation expense? - Answer-The amount of wear and tear on long-lived
assets during the year
Which are components of an income statement? - Answer-Revenue and expenses
What is net income? - Answer-The amount by which revenues exceed expenses
How is earnings per share (EPS) computed? - Answer-Net income divided by the
number of shares
What is bad debt expense? - Answer-Amount of uncollectible accounts created by
credit sales during the year
Which item is an expense item? - Answer-Cost of Goods Sold
What is a single-step income statement? - Answer-Groups and total revenues;
groups and total expenses
What is "gross profit"? - Answer-Sales − Cost of Goods Sold.
What is a company's gross profit percentage? - Answer-Gross Profit ÷ Sales
What is a statement of cash flows? - Answer-Report of the operating, investing, and
financing cash flows of a company during a period.
What are financing activities? - Answer-Those activities whereby cash is obtained
from or repaid to owners and creditors.
What are the major activities in the cash flow statement? - Answer-Financing,
operating, and investing
Which of these items is a use of cash in a financing activity? - Answer-Repaying
loans
