FA - CH1

Milton Corp. has beginning retained earnings of $800. During the year Milton had $2,000 of revenues and $900 in expenses. Milton paid a dividend of $100. What is retained earnings at year-end?

$1,800

Jackson Corp. has beginning retained earnings of $400. During the year Jackson had $800 of revenues and $200 in expenses. Jackson paid a dividend of $100. What is retained earnings at year-end?

$900

Which of the following accounts is on the statement of stockholders' equity?

Common stock

Which of the following accounts are stockholders' equity accounts?

Common stock Retained earnings

Which financial statement reports revenues and expenses?

Income statement

Which of the following represents the net income earned by a corporation and not yet paid to shareholders?

Retained earnings

The four financial statements published to provide information to external users include which of the following?

Statement of Cash Flows Balance Sheet Income Statement Statement of Stockholders' Equity

Which financial statement shows the changes in common stock and retained earnings?

Statement of stockholders' equity

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

True

The financial statement that displays a firm's financial position on a particular date is the

balance sheet

Ending retained earnings is calculated as

beginning retained earnings + net income - dividends

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

earned by the corporation

A(n) ______ is a cost of doing business that is necessary to produce ___.

expense; revenue

_____________ _________________ represent a company's primary means of communicating information to external users.

financial statements

Where is the time period covered by the income statement found?

in the heading

When revenues are greater than expenses, a company has net ______________ , whereas when revenues are less than expenses, a company has a net ______________________ .

income, loss

Amounts owed to creditors are

liabilities.

Pizza Aroma generated $11,000 in revenues and had expenses of $6,000. Pizza Aroma's net income or loss is:

net income of $5,000

The two sources of stockholders' equity are amounts ______.

paid in from shareholders earned by the corporation

Profits earned by a company that have not been paid to stockholders are called ______________________ earnings.

retained

An income statement reports:

revenues expenses net income / loss

For a corporation, the owners' claims to the resources of a company are called

stockholders' equity.

Stockholders' equity is

the owners' claims to resources of the corporation.

Retained earnings represents

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

The four financial statements published to provide information to external users include which of the following?

The four financial statements published to provide information to external users include which of the following?

The accounting equation is: Assets = ______ + Stockholders' Equity.

liabilities