1. Corresponds to CLO 1(a) Which of the following interrelationships is not important to understand when preparing financial statements: (Points : 1)
Total payments on the balance sheet should equal the cash payments for operating activities on the statement of cash flows. Net income from the income statement is used in the retained earnings statement. The ending retained earnings from the retained earnings statement is used in the stockholders’ equity section of the balance sheet. The cash on the balance sheet should be equal to the cash at the end of the period on the statement of cash flows.
2. Corresponds to CLO 1(b) Which of the following does not describe the balance sheet? (Points : 1)
The balance sheet presents a picture at a point in time of what a business owns and owes. The balance sheet reports the assets, liabilities, and stockholders’ equity at a specific date. The balance sheet reports the changes in assets, liabilities, and stockholders’ equity over a period of time. The balance sheet reports assets and claims to those assets at a specific point in time.
3. Corresponds to CLO 1(c) Tulsa Corporation began the year by issuing $50,000 of common stock for cash. The company recorded revenues of $200,000, expenses of $125,000, and paid dividends of $20,000. What was Tulsa’s net income for the year? (Points : 1)
$75,000 $105,000 $55,000 $200,000
4. Corresponds to CLO 1(d) What is the primary purpose of the statement of cash flows? (Points : 1)
To disclose a company’s financing activities. To report information about cash receipts and cash payments of a company. To determine the cash balance to be used on the balance sheet. To determine a company’s working capital.
5. Corresponds to CLO 2(a) Based on the following account balances, what is the total of the debit and credit columns of this company’s adjusted trial balance? Service Revenue…$4,500; Cash…$1,300; Unearned revenue…$3,400; Salary expense…$1,100; Common stock…$1,000; Equipment…$7,000;…