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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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Quiz 1
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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
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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
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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
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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
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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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