QUESTION 1

1. On a balance statement, which component is categorized as stockholders equity?

   		land
   		retained earnings
   		accounts receivable
   		cash

QUESTION 2

1. Which number is transferred from the balance sheet to the statement of cash flows?

   		cash
   		ending retained earnings
   		assets
   		net income

QUESTION 3

1. A group of investors are considering investing in ATX Enterprises. What can the investors learn by reviewing the third quarter income statement for ATX?

   		profitability in the third quarter
   		stock distributions in the fourth quarter
   		liabilities and epenses for the third quarter
   		solvency in the fourth quarter

QUESTION 4

1. Which party requires that all companies prepare an annual report?

   		SEC
   		stockholders
   		employees
   		GAAP

QUESTION 5

1. Which statement about stockholders equity is correct?

   		Stockholders equity consists of the companys land and cash.
   		Stockholders equity appears on the left side of a balance statement.
   		Stockholders equity finances the firm and is considered an asset.
   		Stockholders equity includes retained earnings and capital stock.

QUESTION 6

1. What is the purpose of the cash amount on the balance sheet relative to the ending balance on the cash flow statement?

   		the cash amount on the balance sheet reduces the ending balance on the cash flow statement
   		the cash amount on the balance sheet increases 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 reconciles the ending balance on the cash flow statement

QUESTION 7

1. You have completed the statement of retained earnings. Which number is transferred to the balance sheet?

   		beginning balance
   		net income
   		ending balance
   		dividends

QUESTION 8

1. Wilson Enterprises sells one of its facilities. Which section on the statement of cash flows would the incoming funds be categorized?

   		sales
   		financing
   		operating
   		investing

QUESTION 9

1. During the fourth quarter of the year, Carl's Carpet Cleaning received $4,000 from customers in exchange for providing carpet cleaning services. Where would this money appear on the income statement?

   		revenues
   		net income
   		expenses
   		assets

QUESTION 10

1. True or false. The statement of retained earnings is used by firms to report changes in cash inflows and outflows from one accounting period to the next.

   True

   False