BCOR 3010 Exam 1: QuestionsAnswers

BCOR 3010 Exam 1: Questions/Answers

Question: Which branch of accounting focuses on providing

information to investors and creditors to support investment and lending decisions?

• financial
• managerial
• tax
• audit
• accounting information systems

Correct answer: a. Financial

Question: Do companies in the United States follow

accounting rules issued by the International Accounting Standards Board, as do other companies from most countries around the world?

• true
• false

Correct answer: b. False

Question: What does Accounts Receivable represent?

• amounts owed by the company to vendors for products

purchased

• amounts owed to the company by employees for payroll

advances

• amounts owed to the company by customers for purchases

on account

• cash payments in advance received from customers

Correct answer: c. Amounts owed to the company by

customers for purchases on account

Question: An obligation to deliver a product to a customer

following a payment in advance is reported in the financial

statement as:

• accounts payable
• revenue
• product liability
• unearned revenue
• prepaid expense

Correct answer: d. Unearned Revenue

Question: During 2020, Acme Corp. paid $8,000 to a supplier

for a purchase Acme made on account during the prior year.What effect will this $8,000 payment have on Acme's total assets in 2020?

• increase total assets
• decrease total assets
• no effect on total assets

Correct answer: b. Decrease total assets

Question: During 2020, Acme Corp. borrowed $10,000 from

a bank. This loan will affect Acme's 2020 financial statements

by increasing cash and:

• increasing loans payable
• decreasing loans payable
• increasing loans receivable
• decreasing loans receivable

Correct answer: a. Increasing loans payable

Question: Which financial statement describes a company's

financial position at a particular point in time?

• balance sheet
• income statement
• statement of cash flows

Correct answer: a. Balance sheet

Question: During 2020, Acme Corp. made $150,000 in cash

payments to shareholders as dividends. In which section of the statement of cash flows will this cash flow appear?

• operating section
• investing section
• financing section

Correct answer: c. Financing section

Question: What is the equation for Total Liabilities?

Correct answer: Total Liabilities = Total Liabilities and

Equity - Contributed Capital - Retained Earnings

Question: What is the equation for cash paid to suppliers for

current and past inventory purchases?