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Quiz 1
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Started on Sunday, 5 December 2021, 4:57 PM
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Completed on Sunday, 5 December 2021, 4:57 PM
Time taken 32 secs
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Grade 8.18 out of 10.00 (82%)
Question 1
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Which of the following items would not be found on a balance sheet?
(Select all that apply)
Select one or more:
A. Dividends
B. Property, plant and equipment
C. Stockholders' Equity
D. Cash
E. Nonowner financing
Rationale: The balance sheet reports assets (including cash and property, plant and equipment),
liabilities (including nonowner financing) and equity. Dividends are reported on statement of
stockholders’ equity.
The correct answer is: Dividends
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Question 2
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A list of assets, liabilities and equity can be found on which of the following?
Select one:
A. Statement of Cash Flows
B. Balance Sheet
C. Income Statement
D. Statement of Stockholders' Equity
E. Statement of Assets and Liabilities
Rationale: A balance sheet lists amounts for assets, liabilities and equity at a point in time.
The correct answer is: Balance Sheet
Question 3
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Which of the following statements are correct (Select all that apply):
Select one or more:
A. A balance sheet reports on investing and financing activities.
B. An income statement reports on financing activities.
C. The statement of equity reports on changes in the accounts that make up equity.
D. The statement of cash flows reports on cash flows from operating, investing, and
financing activities over a period of time.
E. A balance sheet reports on a company's assets and liabilities over a period of time.
Rationale: Statement B) is incorrect – the statement of cash flows reports on financing activities
that are reflected on the balance sheet. Statement E) is incorrect – the balance sheet reports on
a company's assets and liabilities at a point in time
The correct answers are: A balance sheet reports on investing and financing activities., The
statement of equity reports on changes in the accounts that make up equity., The statement of
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Quiz 1
cash flows reports on cash flows from operating, investing, and financing activities over a period
of time.
Question 4
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United Company's year-end balance sheet reported the following (in millions):
Total Assets
$100,228
Total Liabilities
Contributed Capital
78,713
8,933
What was United Company's total liabilities and stockholders’ equity at December 31?
Select one:
a. $87,646 million
b. $91,295 million
c. $21,515 million
d. $100,228 million Assets = Liabilities + Stockholders Equity.
Assets = $100,228 so this is the total of liabilities and equity combined.
Your answer is correct.
The correct answer is: $100,228 million
Question 5
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On December 31, Starstruck Corporation reported, on its balance sheet, the following (in
millions):
Total assets
$35,823.8
Total stockholders’ equity $14,726.8
Total current liabilities
$11,367.3
What did Starstruck report as total liabilities on December 31?
Select one:
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a. $21,097.0 million Assets = Liabilities + Stockholders Equity.
$35,823.8 = Liabilities + $14,726.8
Liabilities = $21,097.0
b. None of the these are correct.
c. $24,456.5 million
d. $9,729.7 million
e. $39,183.3 million
Your answer is correct.
The correct answer is: $21,097.0 million
Question 6
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In its 2016 annual report, Snap-It Incorporated reported the following (in millions):
Current assets
$4,710.0
Total shareholders’ equity $6,588.0
Total liabilities
$5,220.0
What did Snap-On report as total assets at year-end?
Select one:
a. $9,729.7 million
b. $11,808.0 million
Assets = Liabilities + Stockholders Equity
Assets = $5,220.00 + $6,588.00 = $11,808
c. None of the these are correct.
d. $24,456.5 million
e. $39,183.3 million
Your answer is correct.
The correct answer is: $11,808.0 million
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Question 7
Quiz 1
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Sales for the year = $357,370, Net Income for the year = $40,271, Income from equity
investments = $9,463, and average Equity during the year = $123,650. Return on equity (ROE) for
the year is:
Select one:
a. 32.6% Return on equity = Net income / Average Equity
$40,271 / $123,650 = 32.6%
b. 7.7%
c. There is not enough information to answer the question.
d. 2.6%
e. 11.3%
Your answer is correct.
The correct answer is: 32.6%
Question 8
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Assets are recorded in the balance sheet in order of:
Select one:
A. Market Value
B. Historic Value
C. Liquidity
D. Maturity
E. None of the above
Rationale: Liquidity refers to the ease of conversation to cash. Current Assets are to be used
during the current operating cycle. Non-current assets, like equipment and goodwill are
reported after current assets. Market value and historic value refer not to the order but to the
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valuation of assets. Maturity refers to the order in which liabilities are recorded in the balance
sheet.
The correct answer is: Liquidity
Question 9
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Which of the following are included in current assets?
Select one:
A. Prepaid rent
B. Taxes payable
C. Automobiles
D. Common stock
E. None of the above
Rationale: Taxes payable is a liability, automobiles is not a current asset but a long-term one,
and common stock is an equity.
The correct answer is: Prepaid rent
Question 10
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Which one of the following is not a current liability?
Select one:
A. Taxes payable
B. Accounts payable
C. Wages payable
D. Wage expense
E. None of the above
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Quiz 1
Rationale: Wage expense is an income statement account, not a balance sheet account.
It is not
a current liability.
The correct answer is: Wage expense
Question 11
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Which of the following is included as a component of stockholders' equity?
Select one:
A. Dividends
B. Accounts payable
C. Buildings
D. Retained earnings
E. Prepaid property taxes
Rationale: Retained earnings is a component of stockholders' equity. Dividends affect retained
earnings but they are not reported as a separate component.
The correct answer is: Retained earnings
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