ACCT 504 Week 4 Midterm Set 2A+

 1.

Question :

(TCO A, B, C) External users want answers to all of the following questions except:

Student Answer:

 Is the company earning satisfactory income?

 Will the company be able to pay its debts as they come due?

 Did the company use a budget to plan its expenses?

 How does the company compare in profitability with competitors?

Instructor Explanation:

Chapter 1 page 6

Points Received:

3 of 3

Comments:

 2.

Question :

(TCO C) Issuing shares of stock in exchange for cash is an example of a(n):

Student Answer:

 delivering activity.

 investing activity.

 financing activity.

 operating activity.

Instructor Explanation:

Chapter 1 page 9

Points Received:

3 of 3

Comments:

 3.

Question :

(TCO C) Which activities involve putting the resources of the business into action to generate a profit?

Student Answer:

 Delivering

 Financing

 Investing

 Operating

Instructor Explanation:

Chapter 1 page 10

Points Received:

3 of 3

Comments:

 4.

Question :

(TCO A) Resources owned by a business are referred to as:

Student Answer:

 stockholders' equity.

 liabilities.

 assets.

 revenues.

Instructor Explanation:

Chapter 1 page 9

Points Received:

3 of 3

Comments:

 5.

Question :

(TCO C) Jamie Company recorded the following cash transactions for the year: 

Paid $70,000 for salaries.
Paid $20,000 to purchase office equipment.
Paid $6,000 for utilities.
Paid $7,000 in dividends.
Collected $130,000 from customers.

What was Jamie's net cash provided by operating activities?

Student Answer:

 $47,000

 $54,000

 $27,000

 $33,000

Instructor Explanation:

$130,000 - 70,000 - 6,000 = $54,000 
Chapter 1 page 10

Points Received:

3 of 3

Comments:

 6.

Question :

(TCO A) On a classified balance sheet, prepaid insurance is classified as: