ACC 211-Ch1Quiz 2

A corporation purchased a $40,000 delivery truck by paying 4,000 cash and signing a $36,000 note payable. Immediately prior to this transaction the corporation had assets, liabilities, and owners' equity in the amounts of $75,000, $52,000, and $23,000 respectively. What is the total amount of the corporation's assets after this transaction has been recorded? $115,000 $111,000 $79,000 $71,000 $75,000

$111,000

Below is accounting information for Cascade Company for 2013: Revenue $416,000 Cash $120,000 Common Stock $200,000 Expenses $300,000 Equipment $240,000 Accounts receivable $35,000 Notes payable $50,000 Notes receivable $62,000 What was net income for the year? $320,000 $296,000 $100,000 $457,000 $116,000

$116,000

Beginning assets were $437,600, beginning liabilities were $262,560, common stock issued during the year totaled $45,000, revenue for the year was $414,250, expenses for the year were $280,000, dividends declared was $22,700, and ending liabilities is $$350,000. What is net income for the year? $700,160 $331,590 $134,250 $612,560 $175,040

$134,250

A parcel of land is: offered for sale at $150,000, assessed for tax purposes at $95,000, recognized by its purchasers as being worth $140,000, and purchased for $137,000. The land should be recorded in the purchaser's books at: $95,000 $137,000 $138,500 $140,000 $150,000

$137,000

A company has twice as much owner's equity as it does liabilities. If total liabilities are $50,000, what amount of assets are owned by the company? $50,000 $100,000 $150,000 $200,000 Assets cannot be determined from the given information.

$150,000

Determine the net income of a company for which the following information is available: Employee salaries expense $180,000 Interest expense 10,000 Rent expense 20,000 Consulting revenue 400,000 $190,000 $210,000 $230,000 $400,000 $610,000

$190,000

FastForward has beginning equity of $257,000, net income of $51,000, dividends of $40,000, and investments by owners in exchange for stock of $6,000. Its ending equity is: $223,000 $240,000 $268,000 $274,000 $208,000

$274,000

Below is accounting information for Cascade Company for 2013, its first year of business Revenue $416,000 Cash $120,000 Common Stock $200,000 Expenses $300,000 Equipment $240,000 Accounts receivable $35,000 Notes payable $50,000 Notes receivable $62,000 What was total equity at year end? $320,000 $296,000 $316,000 $457,000 $116,000

$316,000

Below is accounting information for Cascade Company for 2013: Revenue $416,000 Cash $120,000 Common Stock $200,000 Expenses $300,000 Equipment $240,000 Accounts receivable $35,000 Notes payable $50,000 Notes receivable $62,000 What were the total assets at year-end? $320,000 $296,000 $316,000 $457,000 $116,000

$316,000

If equity is $300,000 and liabilities are $192,000, then assets equal: $108,000 $192,000 $300,000 $492,000 $792,000

$492,000

Beginning assets were $437,600, beginning liabilities were $262,560, common stock issued during the year totaled $45,000, revenue for the year was $414,250, expenses for the year were $280,000, dividends declared was $22,700, and ending liabilities is $$350,000. What are the ending assets for the year? $700,160 $612,560 $787,600 $681,590 $1,159,410

$681,590

If net income for the period was $134,250, dividends distributed were $76,530 and ending retained earnings was $862,520, what was the beginning retained earnings for the period? $1,073,300 $651,740 $804,800 $920,240 $728,270

$804,800

How would the accounting equation of Boston Company be affected by the billing of a client for $10,000 of consulting work completed? +$10,000 accounts receivable, -$10,000 accounts payable. +$10,000 accounts receivable, +$10,000 accounts payable. +$10,000 accounts receivable, +$10,000 cash. +$10,000 accounts receivable, +$10,000 consulting revenue. +$10,000 accounts receivable, -$10,000 consulting revenue

+$10,000 accounts receivable, +$10,000 consulting revenue.

Which of the following is the correct sequence for the heading for ABC Company's 2013 balance sheet? ABC Company, For the year ended 12/31/13, Balance Sheet For the year ended 12/31/13, Balance Sheet, ABC Company Balance Sheet, 12/31/13, ABC Company 12/31/13, ABC Company, Balance Sheet ABC Company, Balance Sheet, 12/31/13

ABC Company, Balance Sheet, 12/31/13

Assets created by selling goods and services on credit are: Accounts payable Accounts receivable Liabilities Expenses Equity

Accounts receivable

Resources owned or controlled by a company that are expected to yield benefits are: Assets Revenues Liabilities Stockholder's equity Expenses

Assets

Apatha Company has assets of $600,000, liabilities of $250,000, and equity of $350,000. It buys office equipment on credit for $75,000. The effects of this transaction include: Assets increase by $75,000 and expenses increase by $75,000. Assets increase by $75,000 and expenses decrease by $75,000. Liabilities increase by $75,000 and expenses decrease by $75,000. Assets decrease by $75,000 and expenses decrease by $75,000. Assets increase by $75,000 and liabilities increase by $75,000.

Assets increase by $75,000 and liabilities increase by $75,000.

The income statement reports all of the following except: Revenues earned by a business. Expenses incurred by a business. Assets owned by a business. Net income or loss earned by a business. The time period over which the earnings occurred.

Assets owned by a business

Photometer Company paid off $30,000 of its accounts payable in cash. What would be the effects of this transaction on the accounting equation? Assets, $30,000 increase; liabilities, no effect; equity, $30,000 increase. Assets, $30,000 decrease; liabilities, $30,000 decrease; equity, no effect. Assets, $30,000 decrease; liabilities, $30,000 increase; equity, no effect. Assets, no effect; liabilities, $30,000 decrease; equity, $30,000 increase. Assets, $30,000 decrease; liabilities, no effect; equity $30,000 decrease.

Assets, $30,000 decrease; liabilities, $30,000 decrease; equity, no effe

Accounts payable appear on which of the following statements? Balance sheet. Income statement. Statement of retained earnings. Statement of cash flows. Transaction statement.

Balance sheet

The distribution of assets to stockholders is called a(n): Liability Dividend Expense Contribution Investment

Dividend

Decreases in retained earnings that represent costs of assets or services that are used to earn revenues are called: Liabilities Equity Withdrawals Expenses Contributed capital

Expenses

A net loss arises when revenues exceed expenses. True or False

False

Which of the following statements is true? Assets and revenues are the same thing. If employees have not yet been paid for their work, the company has wages payable. Retained earnings equal cash that the company has earned and kept. Revenue is another term for profit. Revenue minus expense equals retained earnings.

If employees have not yet been paid for their work, the company has wages payable.

The financial statement that reports whether the business earned a profit and also lists the types and amounts of the revenues and expenses is called a(n): Balance sheet. Statement of retained earnings. Statement of cash flows. Income statement. Statement of financial position.

Income Statement

Fees earned (but not yet received in cash) by a business in exchange for services that it has provided appear on which of the following statements? Income statement. Statement of cash received. Statement of retained earnings. Statement of cash flows. Schedule of accounts receivable.

Income statement

Rent expense that is paid with cash appears on which of the following statements? Balance sheet. Income statement. Statement of retained earnings. Schedule of accounts receivable. Statement of cash received.

Income statement

Generally Accepted Accounting Principles: Focus on the review of a situation. Do not require financial statements. Never change. Intend to make information on the financial statements relevant, reliable, and comparable. Oversees Security and Exchange Commission

Intend to make information on the financial statements relevant, reliable, and comparable.

Net income: Decreases equity. Represents the amount of assets owners put into a business. Equals assets minus liabilities. Is the excess of revenues over expenses. Represents the owners' claims against assets.

Is the excess of revenues over expenses.

Creditors' claims on the assets of a company are called: Net losses Expenses Revenues Equity Liabilities

Liabilities

Which of the following accounting principles dictates when expenses are recognized? Revenue recognition principle Monetary unit principle Business entity principle Matching principle Full disclosure principle

Matching principle

Which of the following elements are found on the balance sheet? Service revenue. Net income. Operating activities. Utilities expense. Retained earnings.

Retained earnings

On December 15, 2013, Myers Legal Services signed a $50,000 contract with a client to provide legal services to the client in 2014. Which accounting principle would require Myers Legal Services to record the legal fees revenue in 2014 and not 2013? Monetary unit principle. Going-concern principle. Cost principle. Business entity principle. Revenue recognition principle.

Revenue recognition principle

Increases in retained earnings from a company's earnings activities are: Assets Revenues Liabilities Stockholder's equity Expenses

Revenues

Which of the following elements are found on the income statement? Cash Accounts receivable Common stock Retained earnings Salaries expense

Salaries expense

The financial statement that describes where a company's cash came from and how it was spent during the period is the: Statement of financial position. Statement of cash flows. Balance sheet. Income statement. Statement of retained earnings.

Statement of cash flows

The financial statement that shows beginning and ending retained earnings balances and the effects of net income (loss) and a dividend for the period is the: Statement of financial position. Statement of cash flows. Balance sheet. Income statement. Statement of retained earnings.

Statement of retained earnings

A balance sheet lists: The types and amounts of the revenues and expenses of a business. Only the information about what happened to retained earnings during a time period. The types and amounts of assets, liabilities and equity of a business as of a specific date. The cash inflows and outflows during the period. The assets and liabilities of a company, but not the equity.

The types and amounts of assets, liabilities and equity of a business as of a specific date.

Which accounting assumption assumes that all accounting information can be reported monthly or yearly? Business entity assumption Monetary unit assumption Value assumption Cost assumption Time period assumption

Time period assumption

The primary objective of financial accounting is: To serve the decision-making needs of internal users. To provide financial statements to help external users analyze and interpret an organization's activities. To monitor and control company activities. To provide information on both the costs and benefits of managing products and services. To know what, when and how much to produce.

To provide financial statements to help external users analyze and interpret an organization's activities.

Every business transactions should leave the accounting equation in balance. True or False

True

The accounting equation can be restated as: Assets - Equity =Liabilities True or False

True

The balance sheet is based on the accounting equation. True or False.

True