Chapter One Accounting

which of the following is the most appropriate and modern definition of accounting

the information system that identifies, record, and communicate the economic events of an organization to interested users

The balance sheet for Raymond Company shows total assets of $4,000, liabilities of $1,500, and retained earnings of $1,200. Based on this information, the amount of common stock must be:

1,300 assets = liabilities + equity. equity has two accounts common stock and retained earnings

net income?

40,000 net income = total revenues - total expenses

what are total assets Cash $10,000 Inventory $31,000 Loan $26,000 Equipment $18,000 Revenue $103,000 Common Stock $143,000 Dividends $81,000 Expenses $46,000 Land $100,000

159,000 cash + inventory + equipment + land

Please calculate net income based on the information provided Salary expense 21,200 Rent expense 5,400 Retained earnings 52,000 Cash 10,000 Advertisement expense 3,000 Service revenue 50,700

21,100 net income = total revenues - total expenses total revenues = 50,700 total expenses = 21,200 + 5,400 + 3,000 = 29,600 net income = 50,700 - 29,600 = 21,100

A company's retained earnings at the beginning and ending of the accounting period were $100,000 and $120,000, respectively. Common stock at the end of the year was $90,000. If the company had dividends of $3,000 and revenues of $280,000, the amount of expenses must have been?

257,000 R/E end =R/E beg+Revenue-Expenses-Dividends R/E end =Retained Earnings at the end of the period R/E beg =Retained Earnings at the begining of the period So, by plugging the numbers we have: 120,000=100,000+280,000-Expenses-3,000 Expenses=100,000+280,000-3,000-120,000=257,000

If total liabilities increased by $69,000 during a period of time and stockholders' equity decreased by $27,000 during the same period, then the amount and direction (increase or decrease) of the period's change in total assets is a(n)

42,000 assets = liabilities + equity

total assets

428,000 assets = accounts receivable, inventory, land revenue

based on this information what is damson's retained earning balance at the end of the year?

480 end (retained earnings) = beg (retained earnings) + net income - dividend

What is Stockholders Equity? Assets=75,000 Liabilities=25,000

50,000 assets = liabilities + stockholders equity

At the beginning of the year BobCat Inc. assets were $650,000, liabilities were $110,000, and common stock was $90,000. Net income for the year was 280,000. Dividends of $220,000 were paid during the year. What is the ending balance for retained earnings in 2012?

510,000

what is assets?Liabilities=20,000 Common Stock=15,000 Retained Earnings=23,500

58,500 assets = liabilities + common stock and retained earnings = 20,000 + 15,000 + 23,500 = 58,500

What is the most probable name of the statement below? Assets: Cash 10,000 Land 100,000 Truck 30,000 Total Assets 140,000 Liabilities: Loan 50,000 Equity Common Stock 85,000 Retained earnings 5,000 Total Liabilities and Shareholders' Equity 140,000

Balance sheet

a company has to provide ALL available accounting information in the summarized format to current or potential investors

FALSE

which of the following is an asset

accounts receivable

what is the accounting equation

assets = liabilities + stockholders' equity

which account is associated with the asset financial statement element

cash

liabilities are

claims of creditors

a document that is evidence of ownership in a business is called

common stock

which of the following financial statements will be the most useful in evaluating company profitability

income statement

In a study session, a classmate makes this statement "Dividends are listed as expenses on the income statement." What is your best response to this statement?

dividends represent a portion of corporate profits that are paid to the shareholders. they belong on the retained earnings statement

a corporation has which of the following

easier to transfer ownership and raise funds, no personal liability

which financial statement element is the common stock account associated with?

equity

investing activities involve collecting necessary funds from investors

false

a business is usually involved in two types of activity - financing and investing

false 3. finance, invest, and operate

the company issues stock

financing

the company pays cash for a building, is what type of cash flow activity?

investing

which account is associated with the asset financial element

land

the company pays cash for insurance, is what type of cash flow activity?

operating

an income statement

presents the revenues and expenses for a specific period of time

Which account is associated with the equity financial statement element

retained earnings

the motivation for an investor to provide resources to a business is

to gain on share appreciation and potentially receive a portion of the income of the company in the future