Question : Multiple Choice Questions 21. Which of the following describes the primary objective : 1228421

 

Multiple Choice Questions
 

21. Which of the following describes the primary objective of the balance sheet? 
A. To measure the net income of a business up to a particular point in time.
B. To report the difference between cash inflows and cash outflows for the period.
C. To report the financial position of the reporting entity at a particular point in time.
D. To report the market value of assets, liabilities and stockholders’ equity at a particular point in time.

22. During the fiscal year ended 2010, a company had revenues of $400,000, expenses of $280,000, and an income tax rate of 30 percent. What was the company’s 2010 net income? 
A. $120,000
B. $36,000
C. $84,000
D. $400,000

23. Atlantic Corporation reported the following amounts at the end of the first year of operations: contributed capital $200,000; sales revenue $800,000; total assets $600,000; dividends declared $40,000; and total liabilities $320,000. What are Atlantics’ retained earnings at the end of the year and how much expenses were incurred during the year? 
A. Retained earnings are $80,000 and expenses incurred totaled $680,000.
B. Retained earnings are $80,000 and expenses incurred totaled $720,000.
C. Retained earnings are $280,000 and expenses incurred totaled $480,000.
D. Retained earnings are $280,000 and expenses incurred totaled $520,000.

24. Which of the following best describes the balance sheet? 
A. It includes a listing of assets at their market values.
B. It includes a listing of assets, liabilities, and stockholders’ equity at their market values.
C. It provides information pertaining to a company’s assets and the providers of the assets.
D. It provides information pertaining to a company’s liabilities for a period of time.

25. Which of the following statements is correct? 
A. Assets on the balance sheet include retained earnings.
B. Retained earnings include contributed capital.
C. The balance sheet equation states that assets equal contributed capital.
D. A corporation’s net income does not necessarily equal its cash flow from operations.

26. Which of the following correctly describes the various financial statements? 
A. An income statement covers a period of time.
B. The cash flow statement is a point in time financial statement.
C. The balance sheet is a period of time financial statement.
D. The statement of retained earnings is a point in time financial statement.

27. Which of the following accounts would not be reported on the balance sheet? 
A. Retained earnings
B. Inventory
C. Accounts payable
D. Dividends

28. Which of the following would not be found on the statement of cash flows? 
A. Cost flow from manufacturing activities
B. Cash flow from operating activities
C. Cash flow from investing activities
D. Cash flow from financing activities

29. Which of the following accounts is not a liability on the balance sheet? 
A. Retained earnings
B. Notes payable
C. Taxes payable
D. Interest payable

30. What financial statement would you look at to determine the dividends declared by a business? 
A. Income statement
B. Statement of retained earnings
C. Statement of cash flows
D. Balance sheet

 

 

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