Accounting Quiz 1

Gilkey Corporation began the year with retained earnings of $310,000. During the year, the company issued $420,000 of common stock, recorded expenses of $1,200,000, and paid dividends of $80,000. If Gilkey's ending retained earnings was $330,000, what was the company's revenue for the year?

$1,300,000

If total liabilities increased by $90,000 and stockholders' equity increased by $30,000 during a period of time, then total assets must change by what amount and direction during that same period?

$120,000 increase

Jimmy's Repair Shop started the year with total assets of $300,000 and total liabilities of $240,000. During the year the business recorded $630,000 in revenues, $330,000 in expenses, and dividends of $60,000. Stockholders' equity at the end of the year was

$300,000.

Henson Company began the year with retained earnings of $380,000. During the year, the company recorded revenues of $500,000, expenses of $380,000, and paid dividends of $40,000. What was Henson's retained earnings at the end of the year?

$460,000

Elston Company compiled the following financial information as of December 31, 2017: Service revenue $840,000 Common stock 180,000 Equipment 240,000 Operating expenses 750,000 Cash 210,000 Dividends 60,000 Supplies 30,000 Accounts payable 120,000 Accounts receivable 90,000 Retained earnings, 1/1/17 450,000 Elston's assets on December 31, 2017 are?

$570,000

Which of the following is not an advantage of the corporate form of business organization? a. No personal liability b. Easy to transfer ownership c. Favorable tax treatment d. Easy to raise funds

C. Favorable tax treatment

Jackson Cement Corporation reported $35 million for sales when it only had $20 million of actual sales. Which of the following qualities of useful information has Jackson most likely violated? a. Comparability b. Relevance c. Faithful representation d. Consistency

c. Faithful representation

All of the following are interrelationships that are important to understand when preparing financial statements except a.the net income from the income statement is used in the retained earnings statement. b.the ending retained earnings from the retained earnings statement is used in the stockholder's equity section of the balance sheet. c.the cash on the balance sheet should be equal to the cash at the end of the period on the statement of cash flows. d.all of the payments on the balance sheet should be equal to the cash payments for operating activities on the statement of cash flows.

d. all of the payments on the balance sheet should be equal to the cash payments for operating activities on the statement of cash flows.

Which accounting assumption assumes that an enterprise will continue in operation long enough to carry out its existing objectives and commitments? a.Monetary unit assumption b.Economic entity assumption c.Periodicity assumption d.Going concern assumption

d.Going concern assumption