Question 1

Several items from the financial statements of Fireside Tires are listed. Use the following choices to identify the type of account for each item listed. (Choices may be used more than once.)
-Cash
A)Assets
B)Liabilities
C)Revenues
D)Expenses
E)Stockholders' Equity

Accepted Answer

Cash is considered an asset because it represents a resource owned or controlled by the company that is expected to bring future economic benefits.

Question 2

Several items from the financial statements of Fireside Tires are listed. Use the following choices to identify the type of account for each item listed. (Choices may be used more than once.)
-Unearned revenue
A)Assets
B)Liabilities
C)Revenues
D)Expenses
E)Stockholders' Equity

Accepted Answer

Unearned revenue is a liability account as it represents advance payments made by customers for goods or services that are yet to be delivered or performed.

Question 3

Provided is a list of important users of accounting information. Also provided are descriptions of a major need for accounting information that may be experienced by the various users. Identify the one user group that is most likely to have the need described. (Choices may be used more than once.)
-The prospects for future dividend payments.
A)Investors
B)Management
C)Supplier
D)Banker
E)Government
F)Employees
G)Labor Union
H)Investors and Banker
I)Supplier and Banker

Accepted Answer

Investors are the most likely user group to have a major need for information regarding the prospects for future dividend payments, as they are interested in the return on their investment.

Question 4

Provided is a list of important users of accounting information. Also provided are descriptions of a major need for accounting information that may be experienced by the various users. Identify the one user group that is most likely to have the need described. (Choices may be used more than once.)
-The profitability of the company based upon the Internal Revenue Code.
A)Investors
B)Management
C)Supplier
D)Banker
E)Government
F)Employees
G)Labor Union
H)Investors and Banker
I)Supplier and Banker

Accepted Answer

The government is most likely to have the need to determine the profitability of a company based upon the Internal Revenue Code in order to assess taxes and enforce compliance with tax laws.

Question 5

Provided is a list of important users of accounting information. Also provided are descriptions of a major need for accounting information that may be experienced by the various users. Identify the one user group that is most likely to have the need described. (Choices may be used more than once.)
-The exact amount of profit on each product of the company.
A)Investors
B)Management
C)Supplier
D)Banker
E)Government
F)Employees
G)Labor Union
H)Investors and Banker
I)Supplier and Banker

Accepted Answer

Management is most likely to have the need to know the exact amount of profit on each product of the company in order to make informed decisions about pricing, production, and investment in future products.

Question 6

Match each statement to the item listed below.
-Cash flows directly related to earning income
A)Cash flows from financing activities
B)Cash flows from investing activities
C)Cash flows from operating activities

Accepted Answer

Cash flows from operating activities are directly related to earning income and include cash inflows and outflows from the primary business operations of the company, such as sales and expenses. Cash flows from financing activities and investing activities are not directly related to earning income.

Question 7

Several items from the financial statements of Fireside Tires are listed. Use the following choices to identify the type of account for each item listed. (Choices may be used more than once.)
-Retained earnings
A)Assets
B)Liabilities
C)Revenues
D)Expenses
E)Stockholders' Equity

Accepted Answer

Retained earnings is a component of stockholders' equity, representing the accumulated net income of the company that has not been distributed to shareholders as dividends.

Question 8

Provided is a list of important users of accounting information. Also provided are descriptions of a major need for accounting information that may be experienced by the various users. Identify the one user group that is most likely to have the need described. (Choices may be used more than once.)
-The ability of the company to pay its debts as they become due.
A)Investors
B)Management
C)Supplier
D)Banker
E)Government
F)Employees
G)Labor Union
H)Investors and Banker
I)Supplier and Banker

Accepted Answer

Suppliers and bankers are particularly interested in a company's ability to pay its debts as they become due because this directly affects their financial relationships with the company. Suppliers need to know if they will be paid for goods or services provided, and bankers need to assess the risk associated with lending money.

Question 9

Several items from the financial statements of Fireside Tires are listed. Use the following choices to identify the type of account for each item listed. (Choices may be used more than once.)
-Common stock
A)Assets
B)Liabilities
C)Revenues
D)Expenses
E)Stockholders' Equity

Accepted Answer

Common stock is a part of stockholders' equity, representing ownership interests in a corporation.

Question 10

Several items from the financial statements of Fireside Tires are listed. Use the following choices to identify the type of account for each item listed. (Choices may be used more than once.)
-Net sales
A)Assets
B)Liabilities
C)Revenues
D)Expenses
E)Stockholders' Equity

Accepted Answer

Net sales is a revenue account, which represents the total amount of sales made during the period.

Question 11

Several items from the financial statements of Fireside Tires are listed. Use the following choices to identify the type of account for each item listed. (Choices may be used more than once.)
-Inventory
A)Assets
B)Liabilities
C)Revenues
D)Expenses
E)Stockholders' Equity

Accepted Answer

Inventory is classified as an asset on the balance sheet.

Question 12

Several items from the financial statements of Fireside Tires are listed. Use the following choices to identify the type of account for each item listed. (Choices may be used more than once.)
-Accounts receivable
A)Assets
B)Liabilities
C)Revenues
D)Expenses
E)Stockholders' Equity

Accepted Answer

Accounts receivable is an asset account because it represents money owed to the company from customers who have not yet paid for goods or services.

Question 13

Several items from the financial statements of Fireside Tires are listed. Use the following choices to identify the type of account for each item listed. (Choices may be used more than once.)
-Long-term notes payable
A)Assets
B)Liabilities
C)Revenues
D)Expenses
E)Stockholders' Equity

Accepted Answer

Long-term notes payable are a form of liability as they represent a debt owed to a creditor that is due more than a year from the balance sheet date.

Question 14

Provided is a list of important users of accounting information. Also provided are descriptions of a major need for accounting information that may be experienced by the various users. Identify the one user group that is most likely to have the need described. (Choices may be used more than once.)
-The effectiveness of the last advertising campaign.
A)Investors
B)Management
C)Supplier
D)Banker
E)Government
F)Employees
G)Labor Union
H)Investors and Banker
I)Supplier and Banker

Accepted Answer

Management is most likely to have the need for accounting information regarding the effectiveness of the last advertising campaign as they are responsible for making decisions and setting strategies based on financial performance. Investors may also have an interest in this information, but it would not be their primary need. Suppliers, employees, labor unions, and governments would not typically have a need for this type of specific financial information. While bankers may have an interest in financial performance, their need would likely be more focused on the overall financial health and creditworthiness of the company rather than on the effectiveness of a specific advertising campaign.

Question 15

Provided is a list of important users of accounting information. Also provided are descriptions of a major need for accounting information that may be experienced by the various users. Identify the one user group that is most likely to have the need described. (Choices may be used more than once.)
-The company's labor rate agree to the last contract.
A)Investors
B)Management
C)Supplier
D)Banker
E)Government
F)Employees
G)Labor Union
H)Investors and Banker
I)Supplier and Banker

Accepted Answer

Labor unions need accounting information to negotiate wages, benefits, and working conditions on behalf of their members. The reference to the company's labor rate and the last contract directly relates to the interests of labor unions in ensuring fair compensation for their members.

Question 16

Provided is a list of important users of accounting information. Also provided are descriptions of a major need for accounting information that may be experienced by the various users. Identify the one user group that is most likely to have the need described. (Choices may be used more than once.)
-Will I get a raise this year?
A)Investors
B)Management
C)Supplier
D)Banker
E)Government
F)Employees
G)Labor Union
H)Investors and Banker
I)Supplier and Banker

Accepted Answer

Employees are most likely to have the need to know if they will get a raise this year, as this information affects their compensation and financial stability.

Question 17

Several items from the financial statements of Fireside Tires are listed. Use the following choices to identify the type of account for each item listed. (Choices may be used more than once.)
-Patents
A)Assets
B)Liabilities
C)Revenues
D)Expenses
E)Stockholders' Equity

Accepted Answer

Patents are a type of intangible asset that represents the exclusive rights granted to the inventor of a product or process.

Question 18

Several items from the financial statements of Fireside Tires are listed. Use the following choices to identify the type of account for each item listed. (Choices may be used more than once.)
-Research and development expense
A)Assets
B)Liabilities
C)Revenues
D)Expenses
E)Stockholders' Equity

Accepted Answer

Research and development expense is classified as an expense account, which is a category of accounts that represents the cost of goods sold or services provided by a business.

Question 19

Several items from the financial statements of Fireside Tires are listed. Use the following choices to identify the type of account for each item listed. (Choices may be used more than once.)
-Interest Income
A)Assets
B)Liabilities
C)Revenues
D)Expenses
E)Stockholders' Equity

Accepted Answer

Interest income is a revenue account, as it represents money earned by the company for lending funds to others.

Question 20

Complete the following table to compare and contrast sole proprietorships and corporations.

Accepted Answer

The answer of Complete the following table to compare and...

Quiz 1: Accounting and The Financial Statements

Several items from the financial statements of Fireside Tires are listed. Use the following choices to identify the type of account for each item listed. (Choices may be used more than once.) -Cash

Several items from the financial statements of Fireside Tires are listed. Use the following choices to identify the type of account for each item listed. (Choices may be used more than once.) -Unearned revenue

Match each statement to the item listed below. -Cash flows directly related to earning income

Several items from the financial statements of Fireside Tires are listed. Use the following choices to identify the type of account for each item listed. (Choices may be used more than once.) -Retained earnings

Several items from the financial statements of Fireside Tires are listed. Use the following choices to identify the type of account for each item listed. (Choices may be used more than once.) -Common stock

Several items from the financial statements of Fireside Tires are listed. Use the following choices to identify the type of account for each item listed. (Choices may be used more than once.) -Net sales

Several items from the financial statements of Fireside Tires are listed. Use the following choices to identify the type of account for each item listed. (Choices may be used more than once.) -Inventory

Several items from the financial statements of Fireside Tires are listed. Use the following choices to identify the type of account for each item listed. (Choices may be used more than once.) -Accounts receivable

Several items from the financial statements of Fireside Tires are listed. Use the following choices to identify the type of account for each item listed. (Choices may be used more than once.) -Long-term notes payable

Several items from the financial statements of Fireside Tires are listed. Use the following choices to identify the type of account for each item listed. (Choices may be used more than once.) -Patents

Several items from the financial statements of Fireside Tires are listed. Use the following choices to identify the type of account for each item listed. (Choices may be used more than once.) -Research and development expense

Several items from the financial statements of Fireside Tires are listed. Use the following choices to identify the type of account for each item listed. (Choices may be used more than once.) -Interest Income

Complete the following table to compare and contrast sole proprietorships and corporations.