Esercitazione esame Environmental accounting con soluzioni

True False Questions

11. The amount of cash paid by a business for dividends would be reported as an operating activity cash flow on the statement of cash flows.

True False

12. A company's retained earnings balance increased $50,000 last year; therefore, net income last year must have been $50,000.

True False

13. The statement of stockholders' equity explains the change in the retained earnings balance caused by stockholder investments and dividend declarations.

True False

14. The primary objective of financial reporting is to provide useful information to external decision makers.

True False

15. The stockholders' equity section of a balance sheet includes capital contributed by owners and also retained earnings.

True False

16. The current assets section of a balance sheet includes both inventory and prepaid expenses.

True False

17. Assets are reported on the balance sheet in the order of liquidity.

True False

18. Many valuable assets such as trademarks and copyrights are not reported on a balance sheet.

True False

19. False

20. True

21. True

22. True

23. False

24. True

25. True

26. True

27. False

1. An asset account normally has a debit balance and is increased by debiting the account. True
2. Liability and stockholders' equity accounts normally have credit balances and are decreased by debiting the accounts. False
3. A journal entry is a written expression of the effects of a transaction on accounts and has equal debits and credits. True
4. The T-account is very useful for accumulating the effects of transactions on account balances and for determining individual account balances. True
5. Current assets include accounts receivable and prepaid expenses. True
6. Current liabilities are defined as obligations to be paid within six months. True
7. When a company borrows money from a bank, the statement of cash flows will report a cash increase from an investing activity. False
8. Issuing stock in exchange for cash creates an increase in cash from a financing activity. True

Financial Statements and Business Decisions

1. A

   1. True

   2. True

   3. True

   4. False

   5. False

   6. True

   7. True

   8. Unknown

   company's financial statements must carefully read the notes to the financial statements because these disclosures provide useful supplemental information. The notes give us the evaluation methods and the rules used to evaluate all the accounting system. True False 9. The financial statement that shows an entity's economic resources and claims against those resources is the balance sheet. The claims are liabilities and stockholder's equity. True False 10. Stockholders' equity on the balance sheet includes common stock and retained earnings. True False 11. The amount of cash paid by a business for dividends would be reported as an operating activity cash flow on the statement of cash flows. It's an outflow of cash by a financing activity. True False 12. A company's retained earnings balance increased $50,000 last year; therefore, net income last year must have been $50,000. Since we can have some dividends the amount can be different. True False 13. The statement of

   14. False

   15. True

   16. False

   17. True

   18. False

   19. Stockholders' equity reflects

   the company. True False
   1. True
   2. False
   3. True
   4. False
   5. False
   6. True
   7. False
   8. True
   9. False
   10. True
   11. False
   12. True

   one year

   True

   False