Question: Listed here are some items found in the financial statements of Finzelberg. Indicate in which financial statement each item would appear.

1. service revenue

2. b. equipment

3. c. advertising expense

4. d. accounts receivable

5. e. common stock

6. f. interest payable

7. Answer: a.income statement

8. b. balance sheet

9. c. income statement

10. d. balance sheet

11. e. balance sheet

12. f. balance sheet

13. Question: What is the basic accounting equation?

14. Answer: assets = liabilities + stockholders’ equity

15. Question: Which one of the following are liabilities?

16. a. cash

17. b. accounts payable

18. c. dividends

19. d. accounts receivable

20. e.supplies

21. f. equipment

22. g. salaries and wages payable

23. h. service revenue

24. i. rent expense

25. Answer: a. not a liability

26. b.liability

27. c. not a liability

28. d. not a liability

29. e. not a liability

30. f. not a liability

31. g. liability

32. h. not a liability

33. i.not a liability

34. Question:

35. Answer: a. operating activities

36. b. financing activities

37. c. financing activities

38. d. operating activities

39. e. investing activities

40. Question: In each case, identify whether the item would appear on the balance sheet or income statement.

41. a. Income tax expense

42. b. Inventory

43. c. Accounts payable

44. d. Retained earnings

45. e. Equipment

46. f. Sales revenue

47. g. Cost of goods sold

48. h. Common stock

49. i. Accounts receivable

50. j. Interest expense

51. Answer: a. income statement

52. b. balance sheet

53. c. balance sheet

54. d. balance sheet

55. e. balance sheet

56. f. income statement

57. g. income statement

58. h. balance sheet

59. i. balance sheet

60. j. income statement

61. Question:

62. Answer: a. income statement

63. b. balance sheet

64. c. statement of cash flows

65. d. balance sheet

66. Question: Which statement about users of accounting information is incorrect?

67. a. Taxing authorities are considered external users.

68. b. Present creditors are considered external users.

69. c. Regulatory authorities are considered internal users.

70. d. Management is considered an internal user.

71. Answer: C

72. Question: Resources owned by a business are referred to as

73. a. assets.

74. b. revenues.

75. c. stockholders’ equity.

76. d. liabilities.

77. Answer: A

78. Question: Paying interest expense and receiving interest revenue are examples of

79. a. delivery activities.

80. b.investing activities.

81. c. financing activities.

82. d. operating activities

83. Answer: D

84. Question: The payment of dividends is an example of a(n)

85. a. delivery activity.

86. b. operating activity.

87. c. financing activity.

88. d. investing activity.

89. Answer: C