ADVANCED ATI ACCOUNTING
QUESTIONS AND ANSWER
Preparing a budget for a business is considered
A. Financial acct.
B. Managerial acct. - CORRECT ANSWER -Managerial
Accounting is the information system that
A. Measures business activities
B. Communicates the results to decision makers
C. Process info into reports
D. All of the above - CORRECT ANSWER -All of the above
Which of the following is not an external user of a business's financial information
A. Taxing authorities
B. Customers
C. Employees
D. Investors - CORRECT ANSWER -Employees
Which statement best describes the accounting equation?
A. The change in retained earnings equals net
income less dividends.
B. Equality of revenue and expense transactions
over time.
,C. Financing activities equal investing and
operating activities.
D. Resources of the company equal creditors' and
owners' claims to those resources. - CORRECT ANSWER -Resources of the company equals creditors and
owners claims to those resources
Owners' claims to the company's resources are
referred to as:
A. Liabilities.
B. Assets.
C. Stockholders' equity.
D. Net liabilities. - CORRECT ANSWER -Stockholder's Equity
If total assets of a company equal $25,000 and
total stockholders' equity equals $10,000, then
total liabilities equal $15,000.
A. True
B. False - CORRECT ANSWER -True
Amounts owed to suppliers for supplies
purchased on account are defined as a(n):
A. Revenue.
B. Asset.
C. Liability.
D. Expense. - CORRECT ANSWER -Liability
,If total liabilities of a company equal $29,000
and total stockholders' equity equals $15,000,
then total assets equal $14,000.
A. True
B. False - CORRECT ANSWER -False
Financial accounting does not deal with which of the following?
A. Measuring a company's economic activity.
B. Providing information to internal users.
C. Preparing financial reports.
D. Communicating financial results to investors. - CORRECT ANSWER -Providing information to internal
users
The accounting equation shows that a company's resources equal creditors' and owners' claims to those
resources.
A. True
B. False - CORRECT ANSWER -True
An alternative form of the accounting equation is:
A. Assets ‐Liabilities = Stockholders' Equity.
B. Net Income = Revenues ‐Expenses.
C. Stockholders' Equity = Assets + Liabilities.
D. Assets = Liabilities ‐Stockholders' Equity. - CORRECT ANSWER -Assets - Liabilities = Stockholder's
Equity
Which of the following does not represent an asset of a company?
A. Supplies held by the company.
, B. Amounts owed to suppliers.
C. Equipment owned and used for operations.
D. Amounts receivable from customers. - CORRECT ANSWER -Amounts owed to suppliers (liability)
The amounts recorded when the company sells products or provides services to customers are referred
to as:
A. Liabilities
B. Revenues
C. Assets
D. Expenses - CORRECT ANSWER -Revenues (recorded at the time the company provides the service)
If a company has stockholders' equity of $25,000 at the end of the year, which of the following
statements must be true?
A. The company has issued $25,000 of common stock.
B. Net income for the year equals $25,000.
C. The company's assets exceed liabilities by $25,000.
D. Total revenues during the year equal $25,000. - CORRECT ANSWER -The company's assets exceed
liabilities by 25,000
The costs of providing goods and services to customers are referred to as:
A. Assets
B. Expenses
C. Liabilities
D. Revenues - CORRECT ANSWER -Expenses
Table - CORRECT ANSWER -Check notes
QUESTIONS AND ANSWER
Preparing a budget for a business is considered
A. Financial acct.
B. Managerial acct. - CORRECT ANSWER -Managerial
Accounting is the information system that
A. Measures business activities
B. Communicates the results to decision makers
C. Process info into reports
D. All of the above - CORRECT ANSWER -All of the above
Which of the following is not an external user of a business's financial information
A. Taxing authorities
B. Customers
C. Employees
D. Investors - CORRECT ANSWER -Employees
Which statement best describes the accounting equation?
A. The change in retained earnings equals net
income less dividends.
B. Equality of revenue and expense transactions
over time.
,C. Financing activities equal investing and
operating activities.
D. Resources of the company equal creditors' and
owners' claims to those resources. - CORRECT ANSWER -Resources of the company equals creditors and
owners claims to those resources
Owners' claims to the company's resources are
referred to as:
A. Liabilities.
B. Assets.
C. Stockholders' equity.
D. Net liabilities. - CORRECT ANSWER -Stockholder's Equity
If total assets of a company equal $25,000 and
total stockholders' equity equals $10,000, then
total liabilities equal $15,000.
A. True
B. False - CORRECT ANSWER -True
Amounts owed to suppliers for supplies
purchased on account are defined as a(n):
A. Revenue.
B. Asset.
C. Liability.
D. Expense. - CORRECT ANSWER -Liability
,If total liabilities of a company equal $29,000
and total stockholders' equity equals $15,000,
then total assets equal $14,000.
A. True
B. False - CORRECT ANSWER -False
Financial accounting does not deal with which of the following?
A. Measuring a company's economic activity.
B. Providing information to internal users.
C. Preparing financial reports.
D. Communicating financial results to investors. - CORRECT ANSWER -Providing information to internal
users
The accounting equation shows that a company's resources equal creditors' and owners' claims to those
resources.
A. True
B. False - CORRECT ANSWER -True
An alternative form of the accounting equation is:
A. Assets ‐Liabilities = Stockholders' Equity.
B. Net Income = Revenues ‐Expenses.
C. Stockholders' Equity = Assets + Liabilities.
D. Assets = Liabilities ‐Stockholders' Equity. - CORRECT ANSWER -Assets - Liabilities = Stockholder's
Equity
Which of the following does not represent an asset of a company?
A. Supplies held by the company.
, B. Amounts owed to suppliers.
C. Equipment owned and used for operations.
D. Amounts receivable from customers. - CORRECT ANSWER -Amounts owed to suppliers (liability)
The amounts recorded when the company sells products or provides services to customers are referred
to as:
A. Liabilities
B. Revenues
C. Assets
D. Expenses - CORRECT ANSWER -Revenues (recorded at the time the company provides the service)
If a company has stockholders' equity of $25,000 at the end of the year, which of the following
statements must be true?
A. The company has issued $25,000 of common stock.
B. Net income for the year equals $25,000.
C. The company's assets exceed liabilities by $25,000.
D. Total revenues during the year equal $25,000. - CORRECT ANSWER -The company's assets exceed
liabilities by 25,000
The costs of providing goods and services to customers are referred to as:
A. Assets
B. Expenses
C. Liabilities
D. Revenues - CORRECT ANSWER -Expenses
Table - CORRECT ANSWER -Check notes
