MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
1) The Financial Accounting Standards Board is responsible for establishing:
A) the American Institute of Certified Public Accountants.
B) the code of professional conduct for accountants.
C) the Securities and Exchange Commission.
D) generally accepted accounting principles.
1)
2) The principle which states that assets acquired by the business should be recorded at their actual
price is the:
A) stable dollar principle.
C) cost principle.
B) reliability principle.
D) objectivity principle.
2)
3) The owners' interest in the assets of a corporation is known as:
A) expenses.
C) assets.
B) stockholders' equity.
D) revenues.
3)
4) Stockholders' equity for Commerce-GA Corporation on 01/01/2003 and 12/31/2003 were \$60,000
and \$75,000, respectively. Assets on 01/01/2003 and 12/31/2003 were \$115,000 and \$105,000,
respectively. Liabilities on 01/01/2003 were \$55,000. What is the amount of liabilities on 12/31/2003?
A) \$30,000
B) \$15,000
C) \$40,000
D) indeterminable from the given information
4)
5) Dividends
A) are expenses.
C) always affect net income.
B) are distributions to stockholders of assets (usually cash) generated by net income.
D) are distributions to stockholders of assets (usually cash) generated by a favorable balance in
retained earnings.
5)
6) The date of the income statement:
A) is not dated.
B) covers a period of time, usually for an accounting period.
C) may cover a period of time or only one day in time, like a snapshot photograph.
D) covers one day in time.
6)
7) What is the proper order for the statement of cash flows?
A) operating activities, financing activities, and investing activities
B) financing activities, investing activities, and operating activities
C) operating activities, investing activities, and financing activities
D) investing activities, financing activities, and operating activities
7)
The basic summary device of accounting is better known as the:
A) financial statements.
C) account.
B) journal.
D) transactions.
