accounting 2101 exam 1

Fundamental qualitative characteristics of accounting information are:

Faithful representation and relevance.

Which of the following accounts are stockholders' equity accounts? (Select all that apply.) Salaries Payable Common stock Cash Retained earnings Land

Common stock Retained earnings

The accounting basis that records revenues in the period that goods and services are provided to customers is referred to as

accrual-basis accounting.

Which of the following is used to record the summary of effects on one particular item?

an account

Adjusting entries: (Select all that apply.) are required in cash-basis accounting only. are needed before financial statement preparation. are prepared at the beginning of the period. update the accounts to their proper balances.

are needed before financial statement preparation. update the accounts to their proper balances.

Stockholders' equity arises primarily from amounts invested by shareholders and amounts ______.

earned by the corporation

Stockholders' equity arises primarily from amounts invested by shareholders and amounts ______. received by customers borrowed from investors earned by the corporation borrowed from banks

earned by the corporation

Gem Corporation is a new company and obtains financing by issuing common stock to investors for $30,000. During the year, Gem earns $8,000 in net income and pays stockholders a dividend of $5,000. What is the total stockholders' equity at the end of the year?

33,000

Which of the following financial statements shows a firm's financial position on a particular date? Income statement Statement of stockholders' equity Balance sheet Statement of cash flows

Balance sheet

Which of the following appear on the statement of stockholders' equity? Beginning balance of retained earnings Dividends Net income Cash received during the accounting period Property, plant, and equipment

Beginning balance of retained earnings Dividends Net income

The title of a balance sheet prepared for the calendar year 2018 includes: For the year ended December 31, 2018 For 2018 December 31, 2018

December 31, 2018

The heading of a balance sheet for the 2018 fiscal period will include which of the following? (Select all that apply.) Multiple select question. December 31, 2018 The name of the business For the Year Ended December 31, 2018 The title "Balance Sheet"

December 31, 2018 The name of the business The title "Balance Sheet"

Which of the following accounts would normally have a debit balance on the trial balance?

Equipment Dividends Accounts receivable

Which of these would be found on a company's balance sheet? (Select all that apply.) Equipment Notes payable Depreciation expense Sales revenue Accounts receivable

Equipment Notes payable Accounts receivable

An income statement includes which of the following items? Amounts contributed by stockholders Expenses Net income Cash Revenues

Expenses Net income Revenues

The independent, private-sector group that is primarily responsible for setting financial reporting standards in the United States is the:

FASB.

When services are provided on account, what is the effect on stockholders' equity?

Increase

What are the effects of providing services on account to customers?

Increase retained earnings Increase assets

Which of the following best describes the primary role of auditors in financial reporting?

Independent party hired by management to express a professional opinion of the extent to which the company's financial reporting is in compliance with generally accepted accounting principles.

Which of the following items is a financing activity on the statement of cash flows? Multiple choice question. Purchase inventory Issue stock Purchase land Pay suppliers

Issue stock

Which of the following is classified as an investing activity on the statement of cash flows? Payment of dividend Purchase of inventory Cash sale to customers Purchase of land

Purchase of land

Which of the following represents the net income earned by

Retained earnings

Generally Accepted Accounting Principles (GAAP) are best defined as:

Standards for presenting financial accounting information.

Dividends paid to shareholders is on which financial statement? Income Statement Statement of Shareholders' Equity Balance Sheet

Statement of Shareholders' Equity

London Corp. issues 1,000 shares of stock for $20 per share. What is the effect of this transaction on the accounting equation?

Stockholders' equity increases Assets increase

Identify which of the following are included in the heading of the statement of stockholders' equity for Xoff, Inc. (Select all that apply.)Xoff, Inc. The day the statement was prepared The period of time covered by the statement Statement of Stockholders' Equity

Xoff, Inc. The period of time covered by the statement Statement of Stockholders' Equity

Utility costs that relate to current year's operations but are not paid until the following year require: (Select all that apply.)

a debit to Utilities Expense a credit to Utilities Payable

Accounts receivable are

assets.

The acronym DEALOR can be used to remember how debits and credits affect different accounts. The three types of accounts that are increased with debits

assets. expenses. dividends.

The financial statement that reflects the accounting equation is referred to as the

balence sheet

The purpose of a statement of cash flows is to provide information about the Multiple choice question. assets used during the period. income and related expenses during the period. cash receipts and cash disbursements during a period. assets, liabilities, and stockholders' equity used during the period.

cash receipts and cash disbursements during a period.

A list of all account names used to record transactions of a company is referred to as the

chart of accounts

A journal provides a

chronological record of all transactions affecting a firm.

Tabor Company issues $20,000 of common stock to investors. Recording this transaction will include a credit to

common stock.

In a double-entry accounting system, the ______ represents the left side of the account.

debit

The two sources of stockholders' equity are amounts ______. earned by the corporation borrowed from banks paid in from shareholders borrowed from related companies

earned by the corporation paid in from shareholders

Salaries already paid to employees for the month is a(n) ______ account that appears on the ______.

expense; income statement

Generally accepted accounting principles are abbreviated as

gaap

The abbreviation GAAP stands for

generally accepted accounting principles.

Which of the following are among the four basic assumptions underlying U.S. GAAP? Multiple select question. fair value monetary unit matching going concern economic entity periodicity historical cost

monetary unit going concern economic entity periodicity

The statement of cash flows classifies items as

operating, investing, and financing.

The process of transferring information from the journal to the ledger is referred to as

posting

The purpose of a general ledger is to

provide in a single location the list of transactions affecting each account and the account's balance.

Ursula Company's bookkeeper records revenue relating to a customer transaction. This indicates that the company

provided goods or services to a customer.

The accumulated net income earned since the inception of the corporation and not yet paid to shareholders is referred to as

retained earnings

The financial statement that provides information about cash receipts and cash disbursements for the period is the

statement of cash flows.

Retained earnings represents

the total net income earned over the life of the company that has not been distributed as dividends.

True or false: The statement of stockholders' equity indicates the changes in the various equity accounts.

true