Strayer ACC556 CHAPTER 1 EXERCISE Latest 2019 April Question # 00600502 Course Code : ACC556 Subject: Business Due on: 04/18/2019 Posted On: 04/18/2019 12:12 PM Tutorials: 1 Rating: 4.9/5

ACC556 Financial Accounting for Managers

CHAPTER 1 EXERCISE

Question 1 When
expenses exceed revenues, which of the following is true?

Answers:

a net loss
results

a net
income results

assets
equal liabilities

assets are
increased

Question 2 Which
of the following is not a common way that managers use the balance sheet?

Answers:

To analyze
the balances of assets, liabilities, and stockholders’ equity throughout the
accounting period

To
determine if the cash balance is sufficient for future needs

To analyze
the balance between debt and common stock financing

To analyze
the balance of accounts receivable on the last day of the accounting period MT

Question 3 Stockholders’
equity is comprised of

Answers:

common
stock and dividends.

common
stock and retained earnings.

dividends
and retained earnings.

net income
and retained earnings.

Question 4 External
users want answers to all of the following questions except

Answers:

Is the
company earning satisfactory income?

Will the
company be able to pay its debts as they come due?

Will the
company be able to afford employee pay raises this year?

How does
the company compare in profitability with competitors?

Question 5 One
way of stating the accounting equation is: Assets + Liabilities = Stockholders’
Equity.

Selected
Answer:

False

Answers:

True

False

Question 6 Which
of the following would not be considered an external user of accounting data
for the Julian Company?

Answers:

Internal
Revenue Service agent

Management

Creditors

Customers

Question 7 Which
of the following statements is not true regarding the Sarbanes-Oxley Act (SOX)?

Answers:

The Act
calls for increased oversight responsibilities for boards of directors.

The Act has
resulted in increased penalties for financial fraud by top management.

The Act
calls for decreased independence of outside auditors reviewing corporate
financial statements.

The Act is
meant to decrease the likelihood of unethical corporate behavior.

Question 8 External
users want answers to all of the following questions except

Answers:

Is the
company earning satisfactory income?

Will the
company be able to pay its debts as they come due?

Will the
company be able to afford employee pay raises this year?

How does
the company compare in profitability with competitors?

Question 9 When
expenses exceed revenues, which of the following is true?

Answers:

a net loss
results

a net
income results

assets
equal liabilities

assets are
increased

Question 10
Claims of creditors and owners on the assets of a business are called
liabilities.

Answers:

True

False

Question 11
Which of the following activities involves collecting the necessary funds to
support the business?

Answers:

Operating

Investing

Financing

Delivering

Question 12
Which of the following is not a common way that managers use the balance sheet?

Answers:

To analyze
the balances of assets, liabilities, and stockholders’ equity throughout the
accounting period

To
determine if the cash balance is sufficient for future needs

To analyze
the balance between debt and common stock financing

To analyze
the balance of accounts receivable on the last day of the accounting period MT

Question 13
Accounting communicates financial information about a business to both internal
and external users.

Answers:

True

False

Question 14
A business organized as a corporation

Answers:

is not a
separate legal entity in most states.

requires
that stockholders be personally liable for the debts of the business.

is owned by
its stockholders.

has tax
advantages over a proprietorship or partnership.

Question 15
Ashley’s Accessory Shop started the year with total assets of $140,000 and
total liabilities of $80,000. During the year the business recorded $220,000 in
revenues, $110,000 in expenses, and dividends of $40,000. The net income
reported by Ashley’s Accessory Shop for the year was

Answers:

$80,000.

$100,000.

$130,000.

$110,000.

Question 16
Match the items below by entering the appropriate code letter in the space
provided.

Question
Distributions of cash from a corporation to its stock holders.	. Dividends
Consumed assets or services.	Expenses
Ownership is limited to one person.	. Sole proprietorship
Officers and others who manage the business.	Internal users
Creditor claims against the assets of the business.	Liabilities
A separate legal entity under state laws.	Corporation
A report prepared by management that presents financial information.	Annual report
A section of the annual report that presents management’s views.	Management discussion and analysis
Resources expected to providefuture economic benefits.	Assets
The acquiring of the resources necessary to run the business.	Investing activities

Question 17
A business organized as a separate legal entity owned by stockholders is a
partnership.

Answers:

True

False

Question 18
The primary purpose of the statement of cash flows is to provide information
about the cash receipts and cash payments of a company for a specific period of
time.

Answers:

True

False