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.)
a.Assets
b.Liabilities
c.Revenues
d.Expenses
e.Stockholders' Equity
-Net sales

Accepted Answer

The answer of Several items from the financial statements of...

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.)
a.Assets
b.Liabilities
c.Revenues
d.Expenses
e.Stockholders' Equity
-Research and development expense

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 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.)
a.Investors
b.Management
c.Supplier
d.Banker
e.Government
f.Employees
g.Labor Union
h.Investors and Banker
i.Supplier and Banker
-The company's labor rate agree to the last contract.

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 4

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.)
a.Assets
b.Liabilities
c.Revenues
d.Expenses
e.Stockholders' Equity
-Accounts receivable

Accepted Answer

Accounts receivable refers to the money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.

Question 5

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.)
a.Assets
b.Liabilities
c.Revenues
d.Expenses
e.Stockholders' Equity
-Patents

Accepted Answer

Patents represent an asset for the company, as they have future economic benefits and can be used to generate revenue.

Question 6

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.)
a.Investors
b.Management
c.Supplier
d.Banker
e.Government
f.Employees
g.Labor Union
h.Investors and Banker
i.Supplier and Banker
-The effectiveness of the last advertising campaign.

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 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.)
a.Assets
b.Liabilities
c.Revenues
d.Expenses
e.Stockholders' Equity
-Unearned revenue

Accepted Answer

Unearned revenue adjustments are used to record revenue that has been received in advance but not yet earned, which matches option B. This means that the company has received payment for goods or services that it has yet to provide.

Question 8

Match each statement to the item listed below.
a.Cash flows from financing activities
b.Cash flows from investing activities
c.Cash flows from operating activities
-Cash flows related to obtaining capital for the company

Accepted Answer

Cash flows related to obtaining capital for the company are classified as cash flows from financing activities, which include activities such as issuing or repurchasing stocks and bonds, and obtaining or repaying loans.

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.)
a.Assets
b.Liabilities
c.Revenues
d.Expenses
e.Stockholders' Equity
-Common stock

Accepted Answer

Common stock is a type of stock that represents ownership in a corporation.

Question 10

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.)
a.Investors
b.Management
c.Supplier
d.Banker
e.Government
f.Employees
g.Labor Union
h.Investors and Banker
i.Supplier and Banker
-The prospects for future dividend payments.

Accepted Answer

Stockholders are the primary stakeholders concerned with the prospects for future dividend payments, as dividends are a major source of return on investment for shareholders. Company management may also be concerned with dividend payments, but their primary concern would be overall financial performance and profitability. Suppliers, bankers, the IRS, SEC, and labor unions are not typically concerned with dividend payments.

Question 11

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.)
a.Investors
b.Management
c.Supplier
d.Banker
e.Government
f.Employees
g.Labor Union
h.Investors and Banker
i.Supplier and Banker
-The profitability of the company based upon the Internal Revenue Code.

Accepted Answer

The Internal Revenue Service (IRS) is responsible for enforcing the Internal Revenue Code, which includes regulations regarding a company's profitability and tax liabilities. Therefore, the IRS has a major need for information on the profitability of the company. Stockholders, company management, suppliers, bankers, and labor unions may also be interested in understanding the profitability of the company, but their needs are not specifically related to the Internal Revenue Code. The Securities and Exchange Commission (SEC) may also require information on the profitability of the company, but this need is more focused on ensuring that accurate and reliable financial information is being provided to the investing public.

Question 12

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.)
a.Investors
b.Management
c.Supplier
d.Banker
e.Government
f.Employees
g.Labor Union
h.Investors and Banker
i.Supplier and Banker
-The exact amount of profit on each product of the company.

Accepted Answer

Company management is most likely to have the need for knowing the exact amount of profit on each product, as this information can help them make decisions about which products to continue producing and which ones to discontinue. Stockholders may also be interested in this information, but their primary concern is usually the overall profitability of the company, rather than the profitability of individual products. Suppliers, bankers, the IRS, SEC, and labor unions are unlikely to have a need for this specific information.

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.)
a.Assets
b.Liabilities
c.Revenues
d.Expenses
e.Stockholders' Equity
-Interest Income

Accepted Answer

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

Question 14

Match each statement to the item listed below.
a.Cash flows from financing activities
b.Cash flows from investing activities
c.Cash flows from operating activities
-Cash flows directly related to earning income

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 15

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.)
a.Assets
b.Liabilities
c.Revenues
d.Expenses
e.Stockholders' Equity
-Long-term notes payable

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 16

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.)
a.Assets
b.Liabilities
c.Revenues
d.Expenses
e.Stockholders' Equity
-Cash

Accepted Answer

The answer of Several items from the financial statements of...

Question 17

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.)
a.Investors
b.Management
c.Supplier
d.Banker
e.Government
f.Employees
g.Labor Union
h.Investors and Banker
i.Supplier and Banker
-Will I get a raise this year?

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 18

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.)
a.Investors
b.Management
c.Supplier
d.Banker
e.Government
f.Employees
g.Labor Union
h.Investors and Banker
i.Supplier and Banker
-The ability of the company to pay its debts as they become due.

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 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.)
a.Assets
b.Liabilities
c.Revenues
d.Expenses
e.Stockholders' Equity
-Inventory

Accepted Answer

The answer of Several items from the financial statements of...

Question 20

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.)
a.Assets
b.Liabilities
c.Revenues
d.Expenses
e.Stockholders' Equity
-Retained earnings

Accepted Answer

Retained earnings are part of stockholders' equity, representing the amount of net income left over for the business after it has paid out dividends to its shareholders.

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.) a.Assets b.Liabilities c.Revenues d.Expenses e.Stockholders' Equity -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.) a.Assets b.Liabilities c.Revenues d.Expenses e.Stockholders' Equity -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.) a.Assets b.Liabilities c.Revenues d.Expenses e.Stockholders' Equity -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.) a.Assets b.Liabilities c.Revenues d.Expenses e.Stockholders' Equity -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.) a.Assets b.Liabilities c.Revenues d.Expenses e.Stockholders' Equity -Unearned revenue

Match each statement to the item listed below. a.Cash flows from financing activities b.Cash flows from investing activities c.Cash flows from operating activities -Cash flows related to obtaining capital for the company

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.) a.Assets b.Liabilities c.Revenues d.Expenses e.Stockholders' Equity -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.) a.Assets b.Liabilities c.Revenues d.Expenses e.Stockholders' Equity -Interest Income

Match each statement to the item listed below. a.Cash flows from financing activities b.Cash flows from investing activities c.Cash flows from operating activities -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.) a.Assets b.Liabilities c.Revenues d.Expenses e.Stockholders' Equity -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.) a.Assets b.Liabilities c.Revenues d.Expenses e.Stockholders' Equity -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.) a.Assets b.Liabilities c.Revenues d.Expenses e.Stockholders' Equity -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.) a.Assets b.Liabilities c.Revenues d.Expenses e.Stockholders' Equity -Retained earnings