large bundle of questions part 1

Question 17

10 points  

1. Which one of the following groups is considered an internal user of financial statements?

   Choose one answer.

   	a.	Factory managers that supervise production line workers.
   	b.	A bank reviewing a loan application from a corporation.
   	c.	The labor union representing employees of a company that is involved in labor negotiations
   	d.	The financial analysts for a brokerage firm who are preparing recommendations for the firm’s brokers on companies in a certain industry

1. Which of the following statements best describes the term revenues?

   Choose one answer.

   	a.	Revenues represent assets received from the sale of products or services.
   	b.	Revenues represent the dollar amount of bonds sold to the public.
   	c.	Revenues represent assets used or consumed in the sale of products or services.
   	d.	Revenues represent an outflow of assets resulting from the sale of goods or services.

1. How is the balance sheet linked to the other financial statements?

   Choose one answer.

   	a.	There is no link between the balance sheet and other statements, as each contains different accounts and provides different information.
   	b.	Net income increases retained earnings on the statement of retained earnings, which ultimately increases retained earnings on the balance sheet.
   	c.	The amount of retained earnings reported on the balance sheet is equal to net income.
   	d.	Retained earnings is added to total assets and reported on the balance sheet.

1. On January 1, 2012, Vulcan Avenue Associates, Inc. purchased a copier for $6,000 cash and decided to depreciate it over 5 years. What amounts associated with the copier will appear on Vulcan’s financial statements for the year ending December 31, 2012?

   Choose one answer.

   	a.	Income Statement  – ($6,000)  Statement of Cash Flows – $0
   	b.	Income Statement  – $0  Statement of Cash Flows – ($1,200)
   	c.	Income Statement  – ($1,200)  Statement of Cash Flows – ($6,000)
   	d.	Income Statement  – ($1,200)  Statement of Cash Flows –  $0

1. Green Corp. has three employees.  Each earns $600 per week for a five day work week ending on Friday.  This month the last day of the month falls on a Wednesday.  The company should make which of the following adjusting entries?

   Choose one answer.

   	a.	Credit Wage Expense for $360 and debit Wages Payable for $360.
   	b.	Credit Wage Expense for $1,080 and debit Wages Payable for $1,080.
   	c.	Debit Wage Expense for $360 and credit Wages Payable for $360.
   	d.	Debit Wage Expense for $1,080 and credit Wages Payable for $1,080.