Louisiana State University, Shreveport ACCT 701 Assessment 1 1)Who uses accounting information? •             Corporate creditors •             Corporate treasury operations •             The internal revenue service •             All of the listed •             Corporate executives •             None of the listed •             Investors 2

Louisiana State University, Shreveport

ACCT 701

Assessment 1

1)Who uses accounting information?

•             Corporate creditors

•             Corporate treasury operations

•             The internal revenue service

•             All of the listed

•             Corporate executives

•             None of the listed

•             Investors

2.            Which of the following statements is FALSE?

•             The balance sheet represents a “snapshot” of the company’s solvency and financial position.

•             The balance sheet reflects a company’s profitability from operations.

•             The income statement reflects a company’s profitability during a period of time.

•             The statement of retained earnings shows the change in retained earnings between the beginning and end of a period.

•             The statement of cash flows shows the cash inflows and outflows over a period of time.

3.            A corporation is:

•             A business incorporated under the laws of a state and owned by a single proprietor.

•             A business incorporated under the laws of a state and owned by stockholders.

•             A business chartered directly by Congress.

•             An unincorporated business owned by two or more persons.

•             Only incorporated by the IRS

•             A government agency

4.            When the stockholders invest cash in the business, what is the effect?

•             None of these

•             Both assets and stockholders’ equity increase

•             Both assets and liabilities increase

•             Liabilities increase and stockholders’ equity increases.

5.            The ending balance in retained earnings is shown in the:

•             A statement of retained earnings

•             Statement of retained earnings and the balance sheet

•             Balance sheet

•             Income statement

6.            Which of the following is not a correct form of the accounting equation?

•             Assets equals liabilities + stockholders’ equity

•             Assets + stockholders’ equity equals liabilities

•             Assets – Stockholders’ equity equals liabilities

•             Assets – Liabilities equals stockholders’ equity

7.            When a business purchases a truck with cash on hand, that transaction is reflected on the:

•             Cash flow statement

•             Income statement

•             Balance sheet

•             Balance sheet and cash flow statement

•             Income statement, balance sheet, and cash flow statement

8.            The basic accounting equation is:

•             Assets A equals Cash C- Loans L – Stockholders’ Equity SE

•             Assets A equals Stockholders’ Equity SE – Liabilities L

•             Assets A equals Liabilities L + Stockholders’ Equity SE

•             Stockholders’ Equity SE equals Assets A+ Liabilities L

•             None of these

•             Assets A equals Liabilities L + Stockholders’ Salaries SS

9.            Of the five primary accounting concepts, which one assumes an indefinite future?

•             Exchange-price (or cost) concept principle

•             None of these

•             The business entity concept

•             The money measurement concept

•             Going-concern (continuity) concept

•             Periodicity (time periods) concept