Question : 71. A revenue transaction results in all of the following except: A. An : 1229562

71. A revenue transaction results in all of the following except: 
A. An increase in assets.
B. An increase in owners’ equity.
C. A positive cash flow in either the past, present, or future.
D. An increase in liabilities.

72. If a company has a profit: 
A. Assets will be equal to liabilities plus owners’ equity.
B. Assets will be less than liabilities plus owners’ equity.
C. Assets will be greater than liabilities plus owners’ equity.
D. Owners’ equity will be greater than its assets.

73. Which of the following activities is not a category into which cash flows are classified? 
A. Marketing activities.
B. Operating activities.
C. Financing activities.
D. Investing activities.

74. The change in owners’ equity from one balance sheet to the next is partially explained by the: 
A. Statement of cash flows.
B. Statement of financial position.
C. Income statement.
D. Tax return.

75. Capital stock represents: 
A. The amount invested in the business by stockholders when shares of stock were initially issued by a corporation.
B. The owners’ equity for a business organized as a corporation.
C. The owners’ equity accumulated through profitable operations that have not been paid out as dividends.
D. The price paid by the current owners to acquire shares of stock in the corporation, regardless of whether they bought the shares directly from the corporation or from another stockholder.

76. The balance sheet item that represents the portion of owners’ equity resulting from profitable operations of the business is: 
A. Accounts receivable.
B. Cash.
C. Capital stock.
D. Retained earnings.

77. Retained earnings appears on: 
A. The income statement.
B. The balance sheet.
C. The statement of cash flows.
D. All three of the financial statements.

78. Which of the following statements regarding liquidity and profitability is not true? 
A. If a business is unable to pay its debts as they come due, it is operating unprofitably.
B. A business may be liquid, yet operate unprofitably for several years.
C. A business may operate profitably, yet be unable to meet its obligations.
D. In order to survive in the long-run, a business must both remain liquid and operate profitably.

79. The concept of adequate disclosure means that: 
A. The accounting department of a business must inform management of the accounting principles used in preparing the financial statements.
B. The company must inform users of any significant facts necessary for proper interpretation of the financial statements, including events occurring after the financial statement date.
C. The independent auditors must disclose in the financial statements any and all errors detected in the company’s accounting records.
D. The financial statements should include a comprehensive list of each transaction that occurred during the year.

80. According to the Sarbanes-Oxley Act, CEOs and CFOs must certify to the accuracy of their company’s financial statements: 
A. Monthly and Quarterly.
B. Quarterly and Annually.
C. Monthly and Annually.
D. CEOs and CFOs are not required to certify to the company’s financial statement; only CPA’s do.