MGMT 200 Exam 1 - Purdue University Actual
Questions and Answers 2024 with complete solution
1/11
1-LO1
Preparing a budget for a business is considered
A) Financial Accounting
B) Managerial Accounting
B
Accounting is the information system that
A) Measures business activities
B) Communicates the results to decision makers
C) Processes information into reports
D) All of the Above
D
Which of the following is NOT an external user of a business's financial
information?
A) Taxing authorities
B) Customers
C) Employees
D) Investors
C
Which statement below 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
D
Owners' claims to the company's resources are referred to as:
A) Liabilities
B) Assets
C) Stockholders' equity
D) Net liabilities
C
If total assests of a company equals $25,000 and total stockholders' equity
equals $10,000, then total liabilities equal $15,000.
A) True
B) False
A
Amounts owed to suppliers for supplies purchased on account are defined as
a(n):
A) Revenue
B) Asset
C) Liability
D) Expense
C
,If total liabilities of a compnay equal $29,000 and total stockholders' equity
equals $15,000, then total assets equal $14,000.
A. True
B. False
B
1/13
1-LO1/LO2
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
B
The accounting equation shows that a company's resources equal creditors'
and owners' claims to those resources
A) True
B) False
A
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
A
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
B
The amounts recorded when the company sells products or provides service
to customers are referred to as:
A) Liabilities
B) Revenues
C) Assets
D) Expenses
B
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 issues $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
C
The cost of providing goods and service to customers are referred to as:
A) Assets
B) Expenses
C) Liabilities
D) Revenues
B
, Using the information below from the accounting records of Knomark
Corporation, stockholders' claims tot he company's resources amount to:
Assets: $1,200,000
Liabilities: $800,000
Net income: $100,000
Retained earnings: $250,000
A) $1,200,000
B) $800,000
C) $250,000
D) $400,000
D
Which of the following best describes revenue?
A) Resources of a company
B) Sales of good and services to a customer
C) Cash received from a customer
D) Dividends paid to stockholders
B
The difference between revenues and expenses is referred to as net income or
net loss
A) True
B) False
A
Use the following amounts to calculate net income: Revenues: $12,000;
Liabilites: $5,000; Expenses: $4,000; Assets: $19,000; Dividends: $4,000
A) $6,000
B) $8,000
C) $4,000
D) $14,000
B
Dividends represent a return of the company's profits to its owners, the
stockholders
A) True
B) False
A
1/18
1-LO2/LO3
The resources of a company are referred to as:
A) Liabilities
B) Revenues
C) Assets
D) Expenses
C
Assets benefit future operations. Examples are cash, inventory, supplies, accounts
receivable, buildings, and equipment.
Liabilities can be best described as:
A) The amount of expenses over the past year.
B) The amount expected to be distributed to stockholders.
C) The amount owed to creditors
D) The amount of services provided to customers during the year
Questions and Answers 2024 with complete solution
1/11
1-LO1
Preparing a budget for a business is considered
A) Financial Accounting
B) Managerial Accounting
B
Accounting is the information system that
A) Measures business activities
B) Communicates the results to decision makers
C) Processes information into reports
D) All of the Above
D
Which of the following is NOT an external user of a business's financial
information?
A) Taxing authorities
B) Customers
C) Employees
D) Investors
C
Which statement below 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
D
Owners' claims to the company's resources are referred to as:
A) Liabilities
B) Assets
C) Stockholders' equity
D) Net liabilities
C
If total assests of a company equals $25,000 and total stockholders' equity
equals $10,000, then total liabilities equal $15,000.
A) True
B) False
A
Amounts owed to suppliers for supplies purchased on account are defined as
a(n):
A) Revenue
B) Asset
C) Liability
D) Expense
C
,If total liabilities of a compnay equal $29,000 and total stockholders' equity
equals $15,000, then total assets equal $14,000.
A. True
B. False
B
1/13
1-LO1/LO2
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
B
The accounting equation shows that a company's resources equal creditors'
and owners' claims to those resources
A) True
B) False
A
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
A
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
B
The amounts recorded when the company sells products or provides service
to customers are referred to as:
A) Liabilities
B) Revenues
C) Assets
D) Expenses
B
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 issues $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
C
The cost of providing goods and service to customers are referred to as:
A) Assets
B) Expenses
C) Liabilities
D) Revenues
B
, Using the information below from the accounting records of Knomark
Corporation, stockholders' claims tot he company's resources amount to:
Assets: $1,200,000
Liabilities: $800,000
Net income: $100,000
Retained earnings: $250,000
A) $1,200,000
B) $800,000
C) $250,000
D) $400,000
D
Which of the following best describes revenue?
A) Resources of a company
B) Sales of good and services to a customer
C) Cash received from a customer
D) Dividends paid to stockholders
B
The difference between revenues and expenses is referred to as net income or
net loss
A) True
B) False
A
Use the following amounts to calculate net income: Revenues: $12,000;
Liabilites: $5,000; Expenses: $4,000; Assets: $19,000; Dividends: $4,000
A) $6,000
B) $8,000
C) $4,000
D) $14,000
B
Dividends represent a return of the company's profits to its owners, the
stockholders
A) True
B) False
A
1/18
1-LO2/LO3
The resources of a company are referred to as:
A) Liabilities
B) Revenues
C) Assets
D) Expenses
C
Assets benefit future operations. Examples are cash, inventory, supplies, accounts
receivable, buildings, and equipment.
Liabilities can be best described as:
A) The amount of expenses over the past year.
B) The amount expected to be distributed to stockholders.
C) The amount owed to creditors
D) The amount of services provided to customers during the year
