Question 1

For each item numbered below, identify which accounting element(s) listed in A through H each statement describes.You may use each letter more than once or not at all.
-That which will be used to generate future economic benefits

Accepted Answer

Assets are resources controlled by a company that are expected to generate future economic benefits.

Question 2

For each item numbered below, identify which accounting element(s) listed in A through H each statement describes.You may use each letter more than once or not at all.
-The net growth during a period of time measured as revenues less expenses

Accepted Answer

Net income is defined as the net growth during a period of time measured as revenues less expenses.

Question 3

For each item numbered below, identify which accounting element(s) listed in A through H each statement describes.You may use each letter more than once or not at all.
-Amount invested by equity investors

Accepted Answer

The amount invested by equity investors is classified as Contributed Capital in accounting, as it represents the capital contributed by the owners or shareholders of a company.

Question 4

For each financial statement item listed below, identify the best description by selecting from items a through f below.You may use each letter more than once or not at all.Write the letter 'X' for each item for which no description is listed.
-Current liability

Accepted Answer

Current liabilities are obligations that a company needs to settle within one year, which matches description B.

Question 5

For each financial statement item listed below, identify the best description by selecting from items a through f below.You may use each letter more than once or not at all.Write the letter 'X' for each item for which no description is listed.
-The property part of property, plant, and equipment

Accepted Answer

The property part of property, plant, and equipment is best described as land used as a site for production, which matches description F.

Question 6

For each financial statement item listed below, identify the best description by selecting from items a through f below.You may use each letter more than once or not at all.Write the letter 'X' for each item for which no description is listed.
-Retained earnings

Accepted Answer

The answer of For each financial statement item listed below,...

Question 7

For each financial statement item listed below, identify the best description by selecting from items a through f below.You may use each letter more than once or not at all.Write the letter 'X' for each item for which no description is listed.
-Contributed capital

Accepted Answer

Contributed capital refers to the amount of capital that owners or shareholders have directly invested in the company, which matches description D.

Question 8

For each financial statement item listed below, identify the best description by selecting from items a through f below.You may use each letter more than once or not at all.Write the letter 'X' for each item for which no description is listed.
-Current asset

Accepted Answer

Current assets are assets that are expected to be converted into cash within one year or within the operating cycle of the business, whichever is longer.

Question 9

For each statement listed below, state whether it is correct or not.
-Property differs from plant and equipment in that property has no physical substance, while plant and equipment does.

Accepted Answer

Property, plant, and equipment all refer to tangible assets; property includes land and buildings which have physical substance, just like plant and equipment.

Question 10

For each statement listed below, state whether it is correct or not.
-Current assets of a major retailer, such as Sears, typically exceed 50 percent of total assets because of merchandise inventory.

Accepted Answer

Current assets of major retailers like Sears often exceed 50 percent of total assets primarily due to the high value of merchandise inventory, which is a significant part of their current assets alongside cash, accounts receivable, and other short-term assets.

Question 11

For each statement listed below, state whether it is correct or not.
-Goodwill is common on many major U.S.companies' balance sheets because of the numerous mergers and acquisitions that occur.

Accepted Answer

Goodwill often appears on the balance sheets of U.S. companies that have engaged in mergers and acquisitions, as it represents the premium paid over the fair market value of the assets acquired.

Question 12

For each statement listed below, state whether it is correct or not.
-Yard Mart Company owes $4,700.If Yard Mart uses assets listed in the current asset section of the balance sheet to pay off this debt next year, Yard Mart must report the $4,700 in the current liability section of its balance sheet.

Accepted Answer

Current liabilities are obligations the company expects to pay within the next year, and since Yard Mart plans to use current assets to pay off the $4,700 debt next year, it should be classified as a current liability.

Question 13

For each statement listed below, state whether it is correct or not.
-Martinez, Inc.issued common stock for cash.This is an investing activity.

Accepted Answer

Issuing common stock for cash is considered a financing activity, not an investing activity.

Question 14

For each financial statement item listed in below, identify in which balance sheet category (listed in a through h) it should be reported.You may use each letter more than once or not at all.
-Contributed capital

Accepted Answer

Contributed capital is reported under Shareholders' equity on the balance sheet as it represents the total value of the capital that shareholders have directly contributed to the company.

Question 15

For each financial statement item listed in below, identify in which balance sheet category (listed in a through h) it should be reported.You may use each letter more than once or not at all.
-Prepaid insurance

Accepted Answer

Prepaid insurance is classified as a current asset because it represents payments made in advance for insurance coverage that will benefit the company within one year or the operating cycle, whichever is longer.

Question 16

For each financial statement item listed in below, identify in which balance sheet category (listed in a through h) it should be reported.You may use each letter more than once or not at all.
-Accounts payable

Accepted Answer

Accounts payable are considered current liabilities because they are obligations that the company needs to pay off within the next year.

Question 17

For each financial statement item listed in below, identify in which balance sheet category (listed in a through h) it should be reported.You may use each letter more than once or not at all.
-Sales revenue

Accepted Answer

Sales revenue is reported on the income statement, not the balance sheet.

Question 18

For each financial statement item listed in below, identify in which balance sheet category (listed in a through h) it should be reported.You may use each letter more than once or not at all.
-Delivery truck

Accepted Answer

A delivery truck is a tangible asset that a company uses over a long period of time in its operations, making it part of the Property, Plant, and Equipment category on the balance sheet.

Question 19

For each statement listed below, state whether it is correct or not
-Financing activities involve the sale of goods and services of a business.

Accepted Answer

Financing activities relate to transactions involving the ways a company finances itself, such as issuing shares or bonds, and repaying loans, not the sale of goods and services.

Question 20

For each statement listed below, state whether it is correct or not
-The income statement is often referred to as a statement of financial condition.

Accepted Answer

The income statement is referred to as a statement of profit and loss, not a statement of financial condition. The statement of financial condition is another term for the balance sheet.

Quiz 2: The Financial Statementsa Closer Look

For each item numbered below, identify which accounting element(s) listed in A through H each statement describes.You may use each letter more than once or not at all. -That which will be used to generate future economic benefits

For each item numbered below, identify which accounting element(s) listed in A through H each statement describes.You may use each letter more than once or not at all. -The net growth during a period of time measured as revenues less expenses

For each item numbered below, identify which accounting element(s) listed in A through H each statement describes.You may use each letter more than once or not at all. -Amount invested by equity investors

For each financial statement item listed below, identify the best description by selecting from items a through f below.You may use each letter more than once or not at all.Write the letter 'X' for each item for which no description is listed. -Current liability

For each financial statement item listed below, identify the best description by selecting from items a through f below.You may use each letter more than once or not at all.Write the letter 'X' for each item for which no description is listed. -The property part of property, plant, and equipment

For each financial statement item listed below, identify the best description by selecting from items a through f below.You may use each letter more than once or not at all.Write the letter 'X' for each item for which no description is listed. -Retained earnings

For each financial statement item listed below, identify the best description by selecting from items a through f below.You may use each letter more than once or not at all.Write the letter 'X' for each item for which no description is listed. -Contributed capital

For each financial statement item listed below, identify the best description by selecting from items a through f below.You may use each letter more than once or not at all.Write the letter 'X' for each item for which no description is listed. -Current asset

For each statement listed below, state whether it is correct or not. -Property differs from plant and equipment in that property has no physical substance, while plant and equipment does.

For each statement listed below, state whether it is correct or not. -Current assets of a major retailer, such as Sears, typically exceed 50 percent of total assets because of merchandise inventory.

For each statement listed below, state whether it is correct or not. -Goodwill is common on many major U.S.companies' balance sheets because of the numerous mergers and acquisitions that occur.

For each statement listed below, state whether it is correct or not. -Martinez, Inc.issued common stock for cash.This is an investing activity.

For each financial statement item listed in below, identify in which balance sheet category (listed in a through h) it should be reported.You may use each letter more than once or not at all. -Contributed capital

For each financial statement item listed in below, identify in which balance sheet category (listed in a through h) it should be reported.You may use each letter more than once or not at all. -Prepaid insurance

For each financial statement item listed in below, identify in which balance sheet category (listed in a through h) it should be reported.You may use each letter more than once or not at all. -Accounts payable

For each financial statement item listed in below, identify in which balance sheet category (listed in a through h) it should be reported.You may use each letter more than once or not at all. -Sales revenue

For each financial statement item listed in below, identify in which balance sheet category (listed in a through h) it should be reported.You may use each letter more than once or not at all. -Delivery truck

For each statement listed below, state whether it is correct or not -Financing activities involve the sale of goods and services of a business.

For each statement listed below, state whether it is correct or not -The income statement is often referred to as a statement of financial condition.