Free Test Bank for Survey of Accounting
7th Edition by Warren Overview
60 Free Test Bank for Survey of Accounting 7th
Edition by Warren
Multiple Choice Questions
A low-cost emphasis strives to provide:
1.

a. no-frills, standardized products and services.

2.

b. products and services that provide unique market needs.

3.

c. products and services that provide prestige and image for customers.

4.

d. products and services that compete on features other than price.

Debts owed by a business are referred to as:
1.

a. accounts receivable.

2.

b. equities.


1.

a. income statement.

2.

b. balance sheet.

3.

c. statement of cash flows.

4.

d. retained earnings statement.

Rights to payments from customers are:
1.

a. liabilities.

2.

b. prepaid expenses.

3.

c. accounts receivable.

4.


b. 25.06%

3.

c. 22.89%

4.

d. 18.73%

Profitability ratios such as _____ can be used to analyze and
assess a company’s financial performance.
1.

a. fixed assets turnover


2.

b. current ratios

3.

c. dividend pay out ratios

4.

d. return on assets


a. $10,800

2.

b. $14,350

3.

c. $14,450

4.

d. $27,500

Managers are evaluated primarily on the business's:
1.

a. tax collections.

2.

b. growth.

3.

c. economic performance.

4.

d. all of these.

3.

c. business incentives.

4.

d. all of these.

Financing activities_____ .
1.

a. involve obtaining funds to operate a business

2.

b. involve obtaining assets such as buildings and equipment

3.

c. help to earn revenues and profits

4.

d. help to make wise investments in other companies

Expressing financial data as if a business will continue operating
for an indefinite period time refers to which concept?
1.

a. Business entity concept


Due to various fraudulent business practices and accounting
coverups in the early 2000s, Congress enacted the SarbanesOxley Act of 2002. The act was responsible for establishing a new
oversight board for public accountants called the:
1.

a. Generally Accepted Accounting Practices for Public Accountants Board.

2.

b. Public Company Accounting Oversight Board.

3.

c. Congressional Accounting Oversight Board.

4.

d.Financial Accounting Standards Board.

A summary of the cash receipts and cash payments for a specific
period of time is a(n):
1.

a.income statement.

2.

b. balance sheet.


2015.


1.

a. Net income of $12,000

2.

b. Net income of $72,000

3.

c. Net income of $28,000

4.

d. Net loss of $20,000

Cash collected from sales during the normal course of business
would be an example of which type of business activity?
1.

a. Operating

2.

b. Investing

3.


a. Adequate disclosure concept

2.

b. Going concern concept

3.

c. Objectivity concept

4.

d. Business entity concept

If there was no beginning retained earnings, net income of
$30,300, and ending retained earnings of $8,000, how much were
dividends?


1.

a. $38,300

2.

b. $22,300

3.


a. interest.

2.

b. tax.

3.

c. overhead.

4.

d. dividend.

Motel 6, a company that helps customers find budget motels
across the nation, is an example of a business using which of the
following?
1.

a. Low-cost emphasis

2.

b. Outreach emphasis

3.

c. Customer emphasis

4.

a. $62,000

2.

b. $82,000

3.

c. $272,000

4.

d. $252,000

Costs incurred in operating a business are also known as:
1.

a. revenues.

2.

b. expenses.

3.

c. liabilities.

4.

d. dividends.


b. outreach emphasis

3.

c. low-cost emphasis

4.

d. customer emphasis

The debt created by a business when it makes a purchase on
account is referred to as an:
1.

a. account payable.

2.

b. account receivable.

3.

c. asset.

4.

d. expense payable.

Which of the following is an intangible asset?


d. To manufacture a quality product

Which of the following is not an example of a capital market
stakeholder?


1.

a. Banks

2.

b. Owners

3.

c. Suppliers

4.

d. Stockholders

Which of the following is the correct order for preparing financial
statements?
1.

a. Income statement, Statement of cash flows, Retained earnings statement,
Balance sheet


4.

d. $40,000

Which of the following are business stakeholders?
1.

a. Stockholders

2.

b. Suppliers

3.

c. Customers

4.

d. All of these

Which of the following is true about the cost principle?


1.

a.It limits the economic data recorded in an accounting system to data related to the
activities of that company.

2.

1.

a. income tax regulations.

2.

b. SEC regulations.

3.

c. Internet rules.

4.

d. Generally Accepted Accounting Principles.

Which of the following types of business is popular for its ease
and low cost of organizing?
1.

a. Not-for-profit

2.

b. Corporation

3.

c. Partnership



3.

c. It is used to determine the financial leverage of a company.

4.

d. It is a measure of the optimum capital structure.

Who has the first preference to assets in case a business fails?
1.

a.Stockholders

2.

b. Long-term creditors

3.

c. Customers

4.

d. Employees

Which of the following is not a characteristic of a corporation?
1.

a. Corporations are organized as a separate legal taxable entity.

_____ is an example of internal stakeholders.
1.

a. Managers

2.

b. Creditors


3.

c. Stockholders

4.

d. Suppliers

The financial statement that presents a summary of the revenues
and expenses of a business for a specific period of time, such as
a month or an year, is called a(n):
1.

a. prior period statement.

2.

b. statement of retained earnings.

3.

2.

b. a method of forecasting the future profitability of a company.

3.

c. the policies, procedures, and strategies used in a business.

4.

d. transaction analysis.

The portion of a corporation's net income retained in the business
is called:
1.

a. interest earnings.

2.

b. dividends.

3.

c. tax expense.

4.

d. retained earnings.


c. Partnership

4.

d. Corporation

Which of the following is considered an asset until consumed?
1.

a. Accounts payable

2.

b. Prepaid expense

3.

c. Accounts receivable

4.

d. Stockholders' equity

Which of the following would not be an example of a
merchandising business?
1.

a. The Walt Disney Company

2.

Shares of ownership are evidenced by issuing:
1.

a. shares payable.

2.

b. commercial paper.

3.

c. shares of stock.

4.

d. notes payable.

Which of the following businesses use a premium-price
emphasis?
1.

a. Value City Furniture selling furniture at affordable prices

2.

b. Tommy Hilfiger selling products that have a unique image

3.

c. Wal-Mart reselling standardized products