Question

Question 1 0.5 pts Where should accounts receivable should entered? on the income statement, just below sales revenues on the balance sheet as a short-term liability on the balance sheet as a long-term asset None of the above are correct.

Question 2 0.5 pts Sam purchased a new ice-cream machine for $45,000 for his Frozen Delights store. Which of the following options reflects how his purchase should be recorded?

$45,000 expense as part of cost of goods sold on the income statement

$45,000 expense under operating expenses on the income statement

$45,000 increase in gross fixed assets on the balance sheet

both A and C

both B and C

Question 3 0.5 pts Michelle gave an investor a 15% ownership stake in her company in exchange for $100,000. How should this $100,000 be recorded?

$100,000 of other income on the income statement

a $100,000 cash inflow on the cash flow statement, under increase in equity

a $100,000 increase in long-term debt on the balance sheet all of the above

only A and B

Question 4 0.5 pts There are two types of financial statements. One type gives a snapshot of the firm's financial position on a specified date. The other type gives a measure of the firm's financial health by recording a stream of financial data accumulated over a specified period of time. Which financial statement gives a snapshot of the firm's financial position on a specified date?

income statement

balance sheet

statement of cash flows

all of the above

Question 5 0.5 pts Which equation below is correct?

total equity = total assets minus total liabilities

total equity = total liabilities minus total assets

total equity = current assets minus current liabilities

total equity = long-term debt + short-term debt

Question 6 0.5 pts At the end of 2016, the BCD Company had accounts receivable of $45,000. At the end of 2015, it had accounts receivable of $40,000. How should this difference be recorded?

a $5,000 cash outflow on the 2016 Statement of Cash Flows

a $5,000 cash inflow on the 2016 Statement of Cash Flows

income on the 2016 Income Statement

Nothing; changes in accounts receivable are not recorded on any of the financial statements.

Question 7 0.5 pts Tim, who owns Tim's Coffee Shop and Café, pays a lawyer $10,000 to review some legal documents for him. This $10,000 is counted in ______.

cost of goods sold

depreciation

administrative and general expenses

No account; it is simply not recorded on any financial statements.

Question 8 0.5 pts Which statement is most likely to be true of a small business expanding its capacity to produce?

Its cash flow from operating activities will most likely be negative.

Its cash flow from investment activities is most likely negative.

Its cash flow from financing activities is most likely negative.

Its cash flow from all activities (operating, investing, and financing) will definitely be positive.

Question 9 0.5 pts Earnings before interest and taxes is the same as which of the following?

gross profit

operating profit

net income

owners' equity

Question 10 0.5 pts A corporation with a taxable income of $100,000 will owe how much in taxes for the tax year?

$22,250

$13,750

$39,000

$34,000

Answer 1

Question 1 - D. None of the above are correct (in balannce sheet - current asset)

Question 2 - C. $45,000 increase in gross fixed assets on the balance sheet

Question 3 - B. a $100,000 cash inflow on the cash flow statement, under increase in equity

Question 4 - B. balance sheet

Question 5 - A. total equity = total assets minus total liabilities

Question 6 - D. Nothing; changes in accounts receivable are not recorded on any of the financial statements.

Question 7 - C. administrative and general expenses

Question 8 - A. Its cash flow from operating activities will most likely be negative.

Question 9 - B. Operating profit

Question 10 - C. $39,000