Accounting and Analysis QuizQuestion 1 Earnings available to common stockholders is equal to:Net income + Preferred stock dividendsPreferred stock dividends – Net incomeNet income – Preferred stoc

Accounting and Analysis Quiz

Question 1 Earnings available to common stockholders is equal to:

Net income + Preferred stock dividends

Preferred stock dividends – Net income

Net income – Preferred stock dividends

Total revenues

Question 2 If total liabilities decreased by $45,000 and stockholders' equity decreased by $15,000 during a period of time, then total assets must change by what amount and direction during that same period?

$60,000 increase

$30,000 decrease

$60,000 decrease

$30,000 increase

Question 3 Common stock is reported on the

statement of cash flows.

retained earnings statement.

income statement.

balance sheet.

Question 4 A business organized as a separate legal entity is a

corporation.

proprietor.

government unit.

partnership.

Question 5 The statement of cash flows begins with cash flows from

financing activities.

investing activities.

operating activities.

solvent activities

Question 6 Expenses are incurred

only on rare occasions.

to produce assets.

to produce liabilities.

to generate revenues.

Question 7 Using the following balance sheet and income statement data, what is the current ratio?

Current assets

14,000

Net income

24,000

Current liabilities

8,000

Stockholders' equity

42,000

Average assets

80,000

Total liabilities

18,000

Total assets

60,000Average common shares outstanding was 10,000

1.75 : 1

1.6 : 1

0.57 : 1

3.3 : 1

Question 8 Which organization issues U.S. accounting standards?

Security Exchange Commission.

International Accounting Standards Committee.

International Auditing Standards Committee.

Financial Accounting Standards Board.

Question 9 Using the following balance sheet and income statement data, what is the earnings per share?

Current assets

9,000

Net income

12,000

Current liabilities

4,000

Stockholders' equity

24,000

Average assets

44,000

Total liabilities

6,000

Total assets

30,000Average common shares outstanding was 10,000

$1.20

$2.00

$0.83

$0.44

Question 10 Which of the following clarifies information presented in the financial statements, as well as expanding upon it where additional detail is needed?

Auditor's report

Management discussion and analysis section

Notes to the financial statements

President's state of the company report