会计英语相关习题

Chapter 01

Financial Statements and Business Decisions True / False Questions

1. Accounting is a system that collects and processes financial information about an organization and reports that information to decision makers.

True False

2. Assets on the balance sheet are recorded at market value or replacement cost.

True False

3. In accounting and reporting for a business entity, the accounting and reporting for the business must be kept separate from other economic affairs of its owners.

True False

4. The accounting period in which service revenue is recognized (i.e., revenue for services rendered) is generally the period in which the cash is collected.

True False

5. Total assets are $70,000, total liabilities, $40,000 and contributed capital is $20,000; therefore, retained earnings are $15,000.

True False

6. The payment of a cash dividend to stockholders increases stockholders' equity.

True False

7. The accounting model for the balance sheet is: Assets + Liabilities = Stockholders' Equity. True False

8. A decision maker who wants to understand a company's financial statements must carefully read the notes to the financial statements because the notes provide useful supplemental information.

True False

9. The financial statement that shows an entity's economic resources and its liabilities is the statement of cash flows.

True False

10. Companies prepare financial statements at the end of each year and more often as needed. True False

11. A note payable is a borrowing instrument that generally does not involve the payment of interest.

True False

12. The amount of cash paid by a business for office utilities would be reported on the statement of cash flows as an operating activity.

True False

13. The income statement equation is Expenses - Revenues = Net Income.

True False

14. Generally accepted accounting principles almost never change once created.

True False

15. The Financial Accounting Standards Board (FASB) is an agency of the federal government that establishes generally accepted accounting principles for businesses.

True False

16. Since 2002, there has been substantial movement to develop international financial reporting standards.

True False

17. An audit guarantees that the financial statements are free of all misstatements.

True False

18. An auditor who fails to detect a material misstatement of a business's financial statements may be sued by anyone who suffered a loss from relying on the financial statements.

True False

19. In terms of economic importance, partnerships are the dominant form of organization in the U.S. because of their ease of formation.

True False

20. One of the advantages of a corporation when compared to a partnership is the limited liability of the owners.

True False

Multiple Choice Questions

21. The primary purpose of the balance sheet is to

A. measure the net income of a business up to a particular point in time.

B. report the difference between cash inflows and cash outflows for the period.

C. report the financial position of the reporting entity at a particular point in time.

D. report the current value of the business.

22. The Beta Corporation had 2009 revenues of $200,000, expenses of $140,000, and an income tax rate of 30 percent. Net income after taxes would be

A. $60,000.

B. $18,000.

C. $42,000.

D. $48,000.

23. Atlantic Corporation reported the following amounts at the end of the first year of operations: contributed capital $100,000; sales revenue $400,000; total assets $300,000; $20,000 dividends; and total liabilities $160,000. Retained earnings and total expenses would be

A. retained earnings $40,000 and expenses $340,000.

B. retained earnings $60,000 and expenses $320,000.

C. retained earnings $140,000 and expenses $240,000.

D. retained earnings $160,000 and expenses $220,000.

24. The financial statement that reports the financial position of a business is the

A. income statement.

B. balance sheet.

C. statement of cash flows.

D. footnotes to the financial statements.

25. Which of the following reports the cash inflows, cash outflows, and change in cash for period?

A. Income statement.

B. Balance sheet.

C. Statement of cash flows.

D. Auditor's report.

26. For a business, a supplier

A. is a company or individual that owns shares of the business.

B. is a company or individual to whom the business sells goods or services.

C. provides goods and services used by the business.

D. makes loans to the company to help finance its activities.

27. For a business, an example of an internal decision maker is

A. a loan officer at a bank.

B. a supplier who sells goods to the company on account.

C. one of the business's long-term customers.

D. one of the business's managers.

28. Financial accounting

A. provides information primarily for external decision makers.

B. is required for corporations but probably would not be done by other business entities.

C. provides information primarily for the use of managers of the company.

D. has been practiced in this country for approximately the last 15 years.

29. Accounting information developed primarily for internal decision makers is called

A. management accounting.

B. risk accounting.

C. auditing.

D. financial accounting.