Financial Accounting: An Introduction to Concepts, Methods and Uses, 14th Edition solutions manual and test bank by Roman L. Weil, Katherine Schipper, Jennifer Francis

Financial Accounting: An Introduction to Concepts, Methods and Uses, 14th Edition solutions manual and test bank by Roman L. Weil, Katherine Schipper, Jennifer Francis

1. Chapter 1: Introduction to Business Activities and Overview of F (1.0 point)
The activities of a business include establishing goals and strategies, obtaining financing, making investments and conducting operations.

*a. True

b. False

2. Chapter 1: Introduction to Business Activities and Overview of 2 (1.0 point)
Goals are the end results toward which the firm directs its energies, and strategies are the
means for achieving those results.

*a. True

b. False

3. Chapter 1: Introduction to Business Activities and Overview of 3 (1.0 point)
Each firm makes financing decisions about the proportion of funds to obtain from owners,
long-term creditors, and short-term creditors.

*a. True

b. False

4. Chapter 1: Introduction to Business Activities and Overview of 4 (1.0 point)
A firm makes investments to obtain productive capacity to carry out its business activities.

*a. True

b. False

5. Chapter 1: Introduction to Business Activities and Overview of 5 (1.0 point)
Patents, licenses, and other contractual rights are tangible, in the sense that the rights have a physical existence.

a. True

*b. False

6. Chapter 1: Introduction to Business Activities and Overview of 6 (1.0 point)
Firms communicate the results of their business activities in the annual report to shareholders.

*a. True

b. False

7. Chapter 1: Introduction to Business Activities and Overview of 7 (1.0 point)
Assets are economic resources with the potential to provide future economic benefits to
a firm.

*a. True

b. False

8. Chapter 1: Introduction to Business Activities and Overview of 8 (1.0 point)
Liabilities are creditors’ claims for funds, usually because they have provided funds, or
goods and services, to the firm.

*a. True

b. False

9. Chapter 1: Introduction to Business Activities and Overview of 9 (1.0 point)
Retained earnings represent the net assets (total assets - total liabilities) a firm derives
from its earnings that exceed the dividends.

a. True

*b. False

10. Chapter 1: Introduction to Business Activities and Overview of10 (1.0 point)
The amounts of individual assets that make up total assets, represented by accounts receivable, inventories, equipment, and other assets, reflect a firm’s financing decisions, each measured at the balance sheet date.

a. True

*b. False

11. Chapter 1: Introduction to Business Activities and Overview of11 (1.0 point)
The mix of liabilities plus shareholders’ equity reflects a firm’s investing decisions, each measured at the balance sheet date.

a. True

*b. False

12. Chapter 1: Introduction to Business Activities and Overview of12 (1.0 point)
Current liabilities represent obligations a firm expects to pay within one year.

*a. True

b. False

13. Chapter 1: Introduction to Business Activities and Overview of13 (1.0 point)
Current assets, typically held and used for several years, include land, buildings,
equipment, patents; and long-term investments in securities.

a. True

*b. False

14. Chapter 1: Introduction to Business Activities and Overview of14 (1.0 point)
Current liabilities and shareholders’ equity are sources of funds where the supplier of
funds does not expect to receive them all back within the next year.

a. True

*b. False

15. Chapter 1: Introduction to Business Activities and Overview of15 (1.0 point)
The current replacement cost of an asset is the amount a firm would have to pay to obtain another asset with identical service potential; it is an entry value that reflects economic conditions at the measurement date.

*a. True

b. False

16. Chapter 1: Introduction to Business Activities and Overview of16 (1.0 point)
The same asset can have different measurements for tax purposes, for financial reporting purposes, and for internal managerial decision-making purposes.

*a. True

b. False

17. Chapter 1: Introduction to Business Activities and Overview of17 (1.0 point)
A natural business year ends when most activities in an operating cycle have been substantially concluded.

*a. True

b. False

18. Chapter 1: Introduction to Business Activities and Overview of18 (1.0 point)
The managers of a business prepare financial statements to present meaningful information
about that business’s activities to external users.

*a. True

b. False

19. Chapter 1: Introduction to Business Activities and Overview of19 (1.0 point)
The independent external auditors of a business prepare financial statements to present meaningful information about that business’s activities to external users.

a. True

*b. False

20. Chapter 1: Introduction to Business Activities and Overview of20 (1.0 point)
Management operates the productive capacity of the firm to generate earnings.

*a. True

b. False

21. Chapter 1: Introduction to Business Activities and Overview of21 (1.0 point)
The historical amount reflects the acquisition cost of assets or the amount of funds originally obtained from creditors or owners.

*a. True

b. False

22. Chapter 1: Introduction to Business Activities and Overview of22 (1.0 point)
To assist users of financial reports in making over-time comparisons, both U.S. GAAP and IFRS require firms to include results for multiple reporting periods in each report.

*a. True

b. False

23. Chapter 1: Introduction to Business Activities and Overview of23 (1.0 point)
U.S. GAAP and IFRS contain broad guidance on what the financial statements must contain, but neither completely specifies the level of detail or the names of accounts.

*a. True

b. False

24. Chapter 1: Introduction to Business Activities and Overview of24 (1.0 point)
The cash basis separates the recognition of revenue from the process of earning those
revenues.

*a. True

b. False

25. Chapter 1: Introduction to Business Activities and Overview of25 (1.0 point)
The accrual basis does not match the cost of the efforts required to generate inflows with the
inflows themselves.

a. True

*b. False

26. Chapter 1: Introduction to Business Activities and Overview of26 (1.0 point)
Performance measured using the cash basis is not sensitive to the timing of cash expenditures.

a. True

*b. False

27. Chapter 1: Introduction to Business Activities and Overview of27 (1.0 point)
Which of the following is not a business activity?

a. Establishing goals and strategies.

b. Obtaining financing.

c. Making investments.

d. Conducting operations.

*e. All of these choices are business activities.

28. Chapter 1: Introduction to Business Activities and Overview of28 (1.0 point)
_____ are the end results toward which the firm directs its energies.

*a. Goals

b. Strategies

c. Objectives

d. Activities

e. Milestones

29. Chapter 1: Introduction to Business Activities and Overview of29 (1.0 point)
_____ are the means for achieving goals.

a. Targets

*b. Strategies

c. Objectives

d. Milestones

e. Tasks

30. Chapter 1: Introduction to Business Activities and Overview of30 (1.0 point)
Management, under the oversight of the firm’s governing board (or boards), sets the firm’s strategies.  Such strategies might include:

a. determining the firm’s lines of business.

b. determining the firm’s geographic locations.

c. degree to which a given business unit will engage in new product development.

*d. all of the above.

e. none of the above.

31. Chapter 1: Introduction to Business Activities and Overview of31 (1.0 point)
Examples of factors from the operating environment that would affect a firm’s goals and
strategies include which of the following?

a. goals and strategies of the firm’s competitors

b. barriers to entry of the firm’s industry, such as patents or large investments in buildings and equipment

c. nature of the demand for the firm’s products and services

d. existence and nature of government regulation

*e. all of the above

32. Chapter 1: Introduction to Business Activities and Overview of32 (1.0 point)
To carry out their plans, firms require financing, that is, funds from owners and creditors. Owners provide funds to a firm and in return receive ownership interests. For a corporation, the ownership interests are:

*a. Common Stock Shares

b. Corporate Bonds

c. Notes Receivable

d. Notes Payable

e. Certificates of Deposit

33. Chapter 1: Introduction to Business Activities and Overview of33 (1.0 point)
To carry out their plans, firms require financing, that is, funds from owners and creditors. When the firm raises funds from owners, which of the following is true?

*a. There is no obligation to repay these funds.

b. There is an obligation to repay these funds.

c. Firms must distribute cash dividends to that firm’s shareholders at least annually.

d. Firm must distribute stock dividends to that firm’s shareholders at least annually.

e. None of the above are true.

34. Chapter 1: Introduction to Business Activities and Overview of34 (1.0 point)
When creditors provide funds to a firm, which of the following is/are true?

a. The firm must repay, usually with interest, in specific amounts at specific dates.

b. Long-term creditors require repayment from the borrower over a period of
time that exceeds one year.

c. One common form of long-term financing is bonds.

d. Suppliers of raw materials or merchandise that do not require payment for 30 days  provide short-term funds.

*e. All of the above are true.

35. Chapter 1: Introduction to Business Activities and Overview of35 (1.0 point)
A firm makes investments to obtain productive capacity to carry out its business activities.
Investing activities involve acquiring all of the following except:

a. land, buildings, and equipment.

b. patents, licenses, and other contractual rights.

c. common shares or bonds of other firms.

d. long-term notes receivable of other firms.

*e. common shares or bonds of the firm.

36. Chapter 1: Introduction to Business Activities and Overview of36 (1.0 point)
Management operates the productive capacity of the firm to generate earnings. Operating activities include the following except for:

a. Purchasing.

b. Research and development.

c. Marketing and administration.

d. Production.

*e. Dividend payments.

37. Chapter 1: Introduction to Business Activities and Overview of37 (1.0 point)
Firms communicate the results of their business activities in the _____.

*a. annual report to shareholders

b. weekly press releases

c. monthly press releases

d. annual press releases

e. annual income tax returns

38. Chapter 1: Introduction to Business Activities and Overview of38 (1.0 point)
Which of the following is/are true regarding setting goals and strategies for a charitable organization?

a. obtain sufficient resources to fund operations

b. not pursue profits or wealth increases as goals.

c. direct efforts toward providing services to constituencies

*d. all of the above are true

e. none of the above are true

39. Chapter 1: Introduction to Business Activities and Overview of39 (1.0 point)
Which of the following is/are true regarding the financing of a charitable organization?

a. may obtain some or all of its financing from donations (contributions)

b. does not issue common stock or other forms of shareholders’ equity

c. does not have retained earnings

*d. all of the above are true

e. none of the above are true 

40. Chapter 1: Introduction to Business Activities and Overview of40 (1.0 point)
Which of the following is true regarding the investing activities of charitable organizations?

a. are not similar to business firms

*b. acquire productive capacity (for example, buildings) to carry out their activities

c. issue common stock

d. issue bonds

e. issue preferred stock

41. Chapter 1: Introduction to Business Activities and Overview of41 (1.0 point)
Which of the following is/are not true regarding the operations of a charitable organization?

a. might prepare financial statements that compare inflows (for example, contributions) with outflows

b. there would be no calculation of net income

c. purpose is to provide services to its constituents

*d. purpose is to seek profits.

e. all of the above

42. Chapter 1: Introduction to Business Activities and Overview of42 (1.0 point)
The number of days between when the employees and suppliers provide goods and services and when the firm pays cash to those employees and suppliers is called the _____ period.

*a. financing

b. grace

c. float

d. funds flow

e. cash disbursement

43. Chapter 1: Introduction to Business Activities and Overview of43 (1.0 point)
The _____ shows assets, liabilities and shareholders’ equity as of a specific date, similar to a snapshot.

*a. balance sheet

b. income statement

c. statement of cash flows

d. statement of sources and uses of funds

e. statement of cash receipts and disbursements

44. Chapter 1: Introduction to Business Activities and Overview of44 (1.0 point)
The _____ report changes in assets and liabilities over a period of time, similar to a motion picture.

a. balance sheet and income statement

*b. income statement and statement of cash flows

c. balance sheet and statement of cash flows

d. statement of cash flows and funds flow statement

e. balance sheet and statement of cash receipts and disbursements

45. Chapter 1: Introduction to Business Activities and Overview of45 (1.0 point)
_____ represent amounts owed by customers for goods and services they have already received.  The customer, therefore, has the benefit of the goods and services before it pays cash.

a. Accounts Payable

*b. Accounts Receivable

c. Notes Receivable

d. Notes Payable

e. Uncollected Sales

46. Chapter 1: Introduction to Business Activities and Overview of46 (1.0 point)
Investments in long-lived assets, with useful lives (or service lives) that can extend for several or many years such as land, buildings, and equipment represent _____ capital.

a. sunk

b. hard

*c. physical

d. intangible

e. soft

47. Chapter 1: Introduction to Business Activities and Overview of47 (1.0 point)
A _____  year ends on a date that is determined by the firm, perhaps based on its business model (for example, many retailers choose the end of January). 

a. physical

b. natural

*c. fiscal

d. business cycle

e. normal

48. Chapter 1: Introduction to Business Activities and Overview of48 (1.0 point)
Most firms report the amounts in their financial statements using _____.

a. Euro’s

b. United States Dollars

c. Japanese Yen

*d. currency of the country where they are incorporated and conduct most of their business activities

e. Swiss Francs

49. Chapter 1: Introduction to Business Activities and Overview of49 (1.0 point)
A _____ item is expected to result in a cash receipt or a cash payment within approximately one year or less. 

a. illiquid

b. long-term

*c. current

d. noncurrent

e. liquid

50. Chapter 1: Introduction to Business Activities and Overview of50 (1.0 point)
A(n) _____ item is expected to generate cash over periods longer than a year or use cash over periods longer than a year. 

a. illiquid

b. appropriated

c. liquid

d. current

*e. noncurrent

51. Chapter 1: Introduction to Business Activities and Overview of51 (1.0 point)
_____ are the amounts at which items entered the firm’s balance sheet and reflect economic conditions at the time the firm obtained assets or obtained financing. 

a. Past amounts

b. Present amounts

c. Valuation amounts

*d. Historical amounts

e. Current amounts

52. Chapter 1: Introduction to Business Activities and Overview of52 (1.0 point)
_____ reflect values at the balance sheet date, so they reflect that day’s economic conditions. 

a. Historical amounts

*b. Current amounts

c. Present amounts

d. Liquidation amounts

e. Discounted cash flow amounts

53. Chapter 1: Introduction to Business Activities and Overview of53 (1.0 point)
An income statement connects two successive _____ through its effect on retained earnings. 

*a. balance sheets

b. cash flow statements

c. cash receipts and disbursement statements

d. funds flow statements

e. financing statements

54. Chapter 1: Introduction to Business Activities and Overview of54 (1.0 point)
Net income that is not paid to shareholders as dividends increases _____.

a. cash receipts

*b. retained earnings

c. cash disbursements

d. long-term liabilities

e. current liabilities

55. Chapter 1: Introduction to Business Activities and Overview of55 (1.0 point)
A _____ connects two successive balance sheets because it explains the change in cash from operating, financing, and investing activities. 

a. statement of cash receipts and disbursements

b. income statement

c. funds flow statement

*d. statement of cash flows

e. statement of retained earnings

56. Chapter 1: Introduction to Business Activities and Overview of56 (1.0 point)
The _____ shows the relation between net income and cash flows from operations, and changes in assets and liabilities that involve cash flows.

a. balance sheet

*b. statement of cash flows

c. income statement

d. funds flow statement

e. cash receipts and cash disbursement statement

57. Chapter 1: Introduction to Business Activities and Overview of57 (1.0 point)
Revenues are:

a. cash payments from customers.

b. outflows of assets to customers.

c. cash receipts from customers.

*d. inflows of assets from customers.

e. sensitive to the timing of cash receipts from customers.

58. Chapter 1: Introduction to Business Activities and Overview of58 (1.0 point)
Expenses are:

a. inflows of assets from customers.

b. cash receipts from customers.

*c. outflows of assets from generating revenues.

d. cash payments.

e. sensitive to the timing of expenditures.

59. Chapter 1: Introduction to Business Activities and Overview of59 (1.0 point)
The balance sheet of Allhear, a communications firm, for the year ended December 31, 20x1, showed current assets of $20 million, current liabilities of $16 million, shareholders’ equity of $17 million, and noncurrent assets of $29 million.
Compute the amount of noncurrent liabilities on Allhear’s balance sheet at the end of 20x1.

a. $5 million

b. $10 million

c. $12 million

d. $13 million

*e. $16 million

60. Chapter 1: Introduction to Business Activities and Overview of60 (1.0 point)
The balance sheet of Old Gold Mines, a gold mining company, for the year ended June 30, 20x1, showed current assets of $6 million, noncurrent assets of $49 million, noncurrent liabilities of $14 million, and current liabilities of $4 million.  Compute the amount of shareholders’ equity on Old Gold Mines’ balance sheet at the end of 20x1.

a. $14 million

b. $27 million

c. $33 million

*d. $37 million

e. $41 million

61. Chapter 1: Introduction to Business Activities and Overview of61 (1.0 point)
The income statement of Ride-on Motors, an automotive manufacturer, for the year ended December 31, 20x1, reported revenues $7,400 million and cost of sales of $6,000 million. In addition, it reported other operating expenses of $900 million, a loss of $2 million on the sale of a business, and net financing income of $200 million. Tax expense for the year was $100 million. Compute the amount of net income or loss that Ride-on Motors reported for 20x1.

a. net income of $198 million

b. net income of $698 million

c. net loss of $698 million

*d. net income of $598 million

e. net loss of 598 million

62. Chapter 1: Introduction to Business Activities and Overview of62 (1.0 point)
The income statement of Peoples Motors Corporation, a U.S. automotive manufacturer, for the year ended December 31, 20x1, reported revenues of $207,000, cost of sales of $165,000, other operating expenses, including income taxes of $50,000, and net financing income, after taxes, of $6,000.  Compute the amount of net income or loss that Peoples Motors reported for 20x1.

a. net income of $0

b. net income of $2,000

*c. net loss of $2,000

d. net income of $8,000

e. net loss of $8,000

63. Chapter 1: Introduction to Business Activities and Overview of63 (1.0 point)
The balance sheet of Old Gold Mines for the year ended June 30, 20x2, showed a balance in retained earnings of $6,000 million at the end of 20x2 and $4,600 million at the end of 20x1. Net income for 20x2 was $2,400, million. Compute the amount of dividends Old Gold Mines declared during 20x2.

a. $500 million

*b. $1,000 million

c. $1,500 million

d. $2,000 million

e. $2,500 million

64. Chapter 1: Introduction to Business Activities and Overview of64 (1.0 point)
The balance sheet of Copper Industries, a producer of copper, showed retained earnings of $26,000 million at March 31, 20x1. At March 31, 20x2, the balance in retained earnings was $70,500 million . Copper declared dividends during the year ended March 31, 20x2, of $3,500 million. Compute Copper’s net income for the year ended March 31, 20x2 (fiscal 20x1).

a. $41.000 million

b. $44.500 million

*c. $48.000 million

d. $53.500 million

e. $58.000 million

65. Chapter 1: Introduction to Business Activities and Overview of65 (1.0 point)
The statement of cash flows for Goal Corporation, a U.S. retailer, for the year ended February 2, 20x2 (fiscal 20x1), showed a net cash inflow from operations of $4,100 million, a net cash outflow for investing of $6,200 million, and a net cash inflow for financing of $3,700 million. The balance sheet at February 3, 20x1, showed a balance in cash of $800 million. Compute the amount of cash on the balance sheet at February 2, 20x2.

a. $800 million.

b. $1,600 million.

*c. $2,400 million.

d. $3,200 million.

e. $4,700 million.

66. Chapter 1: Introduction to Business Activities and Overview of66 (1.0 point)
The statement of cash flows for Lights-On, a leading electric utility for the year ended December 31, 20x2, showed a net cash inflow from operations of $427,000 million and a net cash outflow for financing of $21,800 million. The comparative balance sheets showed a balance in cash of $32,700 at December 31, 20x1, and $101,200 at December 31, 20x2. Compute the net amount of cash provided or used by Lights-On’s investing activities for 20x2.

a. $68,500 million provided

b. $271,300 million used

c. $372,500 million provided

*d. $336,700 million used

e. $236,700 million used