Robert Half Assessment Test Core Accounting Principles 4

Question 1

Which section of the statement of cash flows reflects proceeds from issuing long-term bonds?

Accepted Answer

Financing activities

Answer

Operating activities

Answer

Investing activities

Answer

Supplemental disclosures

Question 2

Deferred revenue appears on the balance sheet as a:

Accepted Answer

Liability

Answer

Current asset

Answer

Long-term asset

Answer

Component of equity

Question 3

If a company has a current ratio of 2.0 and current liabilities of $50,000, what are its current assets?

Accepted Answer

$100,000

Answer

$25,000

Answer

$50,000

Answer

$150,000

Question 4

Which of the following is NOT a characteristic of a liability?

Accepted Answer

It represents an ownership claim on assets

Answer

It represents a present obligation

Answer

It will likely require an outflow of resources

Answer

It arises from a past transaction or event

Question 5

What effect does declaring (but not yet paying) a cash dividend have on the balance sheet?

Accepted Answer

Decreases retained earnings; increases dividends payable

Answer

Decreases cash; decreases retained earnings

Answer

No effect until payment is made

Answer

Increases retained earnings; increases liabilities

Question 6

Under the straight-line depreciation method, an asset costing $24,000 with a $4,000 salvage value and a 5-year life results in annual depreciation of:

Accepted Answer

$4,000

Answer

$4,800

Answer

$5,000

Answer

$6,000

Question 7

The debt-to-equity ratio measures:

Accepted Answer

A company's reliance on creditor financing relative to owner financing

Answer

Short-term liquidity

Answer

How efficiently assets generate revenue

Answer

The proportion of assets financed by current liabilities