CBAD 201 FINAL EXAM QUESTIONS AND CORRECT ANSWERS
(VERIFIED ANSWERS) GRADED A+
Net working capital:
a. should be the same for all companies
b. represents the company's ability to pay its long-term debts
c. is computed by subtracting total current liabilities from total current assets
d. should be a negative number to ensure the profitability of the company.
c. is computed by subtracting total current liabilities from total current assets
The accounting assumption that states that the business, rather than its owners, is
the reporting unit is the:
a. entity assumption
b. stable-monetary-unit assumption
c. going concern assumption
d. historical cost assumption
a. entity assumption
What type of business organization transacts much more business and is larger in
terms of assets, income, and number of employees?
a. partnership
b. limited liability company
c. corporation
d. proprietorship
c. corporation
The accounting equation can be stated as:
a. Assets = Liabilities - Stockholders' Equity
b. Assets -Liabilities = Stockholders' Equity
c. Assets + Stockholders' Equity = Liabilities
d. Assets - Stockholders' Equity + Liabilities = Zero
b. Assets -Liabilities = Stockholders' Equity
Which of the following statements is TRUE?
a. Dividends reduce retained earnings.
b. Dividends are expenses of a business.
, c. Dividends reduce net income.
d. Dividends increase retained earnings.
a. Dividends reduce retained earnings.
Which financial statement is dated at the moment in time when the accounting
period ends?
a. Statement of retained earnings and income statement
b. Statement of cash flows
c. Balance sheet
d. Income statement
c. Balance sheet
The Balance Sheet is used to prepare the:
a. Income Statement
b. Statement of Stockholders' Equity
c. Statement of Cash Flows
d. Statement of Retained Earnings
c. Statement of Cash Flows
Which transaction decreases stockholders' equity?
a. sale of common stock
b. cash purchase of land
c. total expenses greater than total revenues for the period
d. total revenues greater than total expenses for the period
c. total expenses greater than total revenues for the period
Which of the following is NOT a business transaction?
a. A company buys goods on account.
b. A company sells land for cash.
c. A company borrows money from the bank.
d. A company fired 10 percent of the employees due to lackluster sales.
d. A company fired 10 percent of the employees due to lackluster sales.
On May 10, a business collected $2200 on account. What journal entry is needed
on that date?
(VERIFIED ANSWERS) GRADED A+
Net working capital:
a. should be the same for all companies
b. represents the company's ability to pay its long-term debts
c. is computed by subtracting total current liabilities from total current assets
d. should be a negative number to ensure the profitability of the company.
c. is computed by subtracting total current liabilities from total current assets
The accounting assumption that states that the business, rather than its owners, is
the reporting unit is the:
a. entity assumption
b. stable-monetary-unit assumption
c. going concern assumption
d. historical cost assumption
a. entity assumption
What type of business organization transacts much more business and is larger in
terms of assets, income, and number of employees?
a. partnership
b. limited liability company
c. corporation
d. proprietorship
c. corporation
The accounting equation can be stated as:
a. Assets = Liabilities - Stockholders' Equity
b. Assets -Liabilities = Stockholders' Equity
c. Assets + Stockholders' Equity = Liabilities
d. Assets - Stockholders' Equity + Liabilities = Zero
b. Assets -Liabilities = Stockholders' Equity
Which of the following statements is TRUE?
a. Dividends reduce retained earnings.
b. Dividends are expenses of a business.
, c. Dividends reduce net income.
d. Dividends increase retained earnings.
a. Dividends reduce retained earnings.
Which financial statement is dated at the moment in time when the accounting
period ends?
a. Statement of retained earnings and income statement
b. Statement of cash flows
c. Balance sheet
d. Income statement
c. Balance sheet
The Balance Sheet is used to prepare the:
a. Income Statement
b. Statement of Stockholders' Equity
c. Statement of Cash Flows
d. Statement of Retained Earnings
c. Statement of Cash Flows
Which transaction decreases stockholders' equity?
a. sale of common stock
b. cash purchase of land
c. total expenses greater than total revenues for the period
d. total revenues greater than total expenses for the period
c. total expenses greater than total revenues for the period
Which of the following is NOT a business transaction?
a. A company buys goods on account.
b. A company sells land for cash.
c. A company borrows money from the bank.
d. A company fired 10 percent of the employees due to lackluster sales.
d. A company fired 10 percent of the employees due to lackluster sales.
On May 10, a business collected $2200 on account. What journal entry is needed
on that date?
