Exam (elaborations)

ACCT-1004S-1-Fundamentals of Accounting-QUESTIONS AND ANSWERS

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Course
ACCT-1004S-1-

Institution
ACCT-1004S-1-

Which number is transferred from the income statement to the statement of retained earnings? Answer s: net income gross profit total expenses cost of goods sold Response Feedback: The net income, or final line of the income statement, is transferred to the statement of reta...

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Uploaded on April 19, 2022
Number of pages 17
Written in 2021/2022
Type Exam (elaborations)
Contains Questions & answers

income statement
net income
gross profit
accounts receivable
statement of retained earnings

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Submission: Final Exam -
Week 6
Course ACCT-1004S-1-Fundamentals of Accounting-2021-Winter-
QTR- Term-wks-1-thru-6-(11/29/2021-01/09/2022)-PT3
Test Final Exam - Week
6 Status Needs Grading
Attemp 350out of 350 points
t Score
Time 0 hour, 3 minutes
Elapse
d
Instructions Please answer each question below and click Submit when you
have completed the Exam. You will receive your score and
feedback immediately.
Results All Answers, Feedback, Incorrectly Answered Questions
Displaye
d
• Question 1
8.75 out of 8.75 points
Which number is transferred from the income statement to the statement of
retained earnings?

Answer net income
s:

gross profit
total expenses
cost of goods
sold

Response The net income, or final line of the income statement, is
Feedback: transferred to the statement of retained earnings.

• Question 2
8.75 out of 8.75 points

, Which opinion from an independent auditor’s report indicates that no opinion is
made due to missing information?

Answer disclaime
s: r

unqualifi
ed
qualified
adverse

Response Due to missing information, a disclaimer opinion includes no
Feedback: actual opinion.

• Question 3
8.75 out of 8.75 points
A business owner is concerned about the ability of his business to pay its debts in
the next 30 days due to the company’s limited amount of available cash. The
business owner is worried about the firm’s .

Answer solven
s: cy

liquidit
y

Response Liquidity refers to the ability of a business to pay its
Feedback: debts/obligations.

• Question 4
8.75 out of 8.75 points
A group of investors are considering investing in ATX Enterprises. What is the
investor's purpose for reviewing the income statements of ATX Enterprises?

Answer evaluate the firm’s potential solvency for the purpose of
s: obtaining loans

understand the components and distribution of stockholders’
equity
identify the firm’s assets and liabilities at the end of the
accounting period
determine the firm’s net income or net losses over a specific
period of time

Response The income statement provides investors and creditors with
Feedback: information about the amount of net income earned (its
profitability) or net losses over a specified period of time.

, • Question 5
8.75 out of 8.75 points
Which number from the balance sheet is used to reconcile the ending balance on
the statement of cash flows?

Answer accounts
s: receivable

capital stock
assets
cash

Response The cash in the assets section of the balance sheet is used to
Feedback: reconcile the balance of the statement of cash flows, as both
represent cash on hand.

• Question 6
8.75 out of 8.75 points
What is the purpose of the cash amount on the balance sheet relative to the
ending balance on the cash flow statement?

Answer the cash amount on the balance sheet reduces the ending balance on
s: the cash flow statement

the cash amount on the balance sheet reconciles the ending balance on
the cash flow statement
the cash amount on the balance sheet has no effect on the ending
balance on the cash flow statement
the cash amount on the balance sheet increases the ending balance on
the cash flow statement

Response the cash amount on the balance sheet reconciles the ending
Feedback: balance on the cash flow statement. The two numbers are the
same and represent the company’s cash on hand at the end of the
accounting period.

• Question 7
8.75 out of 8.75 points
Wilson Consulting is seeking a $500,000 loan from National Bank to purchase land
for an office building. The bank’s loan officer asks numerous questions based on the
balance sheet to determine the risk of providing the loan. Which question about
information on the balance sheet best addresses the liquidity of Wilson Consulting?

Answer How often are profits distributed
s: to stockholders?

How long has the firm been in business?

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