Accounting 201-04 chapter 1

Assume that beginning retained earnings is $1,000. Revenues for the year total $260 while expenses total $150. The company paid out dividends during the year totaling $45. What is ending retained​ earnings?

$1,065 ending retained earnings = [beginning earnings + (revenues for year total - expenses - dividends)] [1000 + (260 - 150 - 45)] = 1,065

Connar Company reports the following accounts and balances at the end of the first year of​ operations: Long−Term Notes Payable $150,000 Accounts Receivable $28,000 Accounts Payable ​$37,000 Building ​$55,000 Cash and Cash Equivalents $83,000 Salaries Expense ​$20,500 Common Stock ​$41,000 Interest Payable ​$1,500 Land ​$40,000 Short−term Investments $5,000 Income Taxes Payable $8,000 Equipment ​$59,500 Supplies $9,000 Service Revenue ​$99,000 Supplies Expense ​$18,000 Utilities Expense ​$8,500 Income Tax Expense ​$10,000 What is the total amount of current assets at the end of the​ year?

$125,000 Current Assets: Accounts receivables $28,000 Cash & cash Equivalents $83,000 Supplies $9,000 Short term investments $5,000 Total Current Assets = $125,000

Michael Company reports Total Assets of $285,000​, Common Stock of $59,000​, and Retained Earnings of $100,000. What are total liabilities at the end of the first​ year?

$126,000 total liabilities = total assets - total equity ( 285,000 - (59,000 + 100,000) = 126,000

Golden Company had the following accounts and balances at the end of the first year of operations. What are total assets at the end of the​ year? Cash $79,000 Accounts Payable $17,000 Common Stock ​$21,000 Dividends $12,000 Operating Expenses $25,000 Accounts Receivable $55,000 Inventory $40,000 Long−term Notes Payable $33,000 Revenues $115,000 Salaries Payable $25,000

$174,000 total assets at the end of the year = cash + accounts receivable + inventory (79,000 + 55,000 + 40,000) = 174,000

Wetzel Company has the following accounts and balances at the end of the first year of​ operations: Long−Term Notes Payable $155,000 Accounts Receivable $33,000 Accounts Payable $38,000 Building $55,000 Cash and Cash Equivalents $75,000 Salaries Expense $20,500 Common Stock $125,000 Interest Payable $1,500 Land $43,000 Short−term Investments $25,000 Income Taxes Payable $13,000 Equipment $59,500 Supplies $29,000 Service Revenue $99,000 Supplies Expense $38,000 Utilities Expense $28,500 Income Tax Expenses $25,000 What is the total amount of liabilities at the end of the​year?

$207,500 Total amount of Liabilities are as follow : Long term note payable 155,000 Account payable 38,000 Interest payable 1,500 Income tax payable 13,000 Total liabilities = 207,500

If assets are $6,600​, and equity is $1,600​, what are​ liabilities?

$5,000 (6,600-1,600 = $5,000)

Lorna Company is a new company with a beginning retained earnings balance of zero. It has the following account balances at the end of the first year of​ operations: Accounts Payable $37,000 Revenues $105,000 Salaries Expense $15,000 Dividends $10,000 Utilities Expense $14,000 Advertising Expense $8,000 Short−term Investments $20,000 Cash $82,000 Land $50,000 Common Stock $57,000 What is the ending balance in Retained​ Earnings?

$58,000 Ending balance of retained earnings = Revenues - expenses - Dividends (105,000 - 15,000 - 14,000 - 8,000 - 10,000) = 58,000

Kolander Company has the following accounts and balances at the end of the first year of​ operations: Long−Term Notes Payable $50,000 Accounts Receivable $32,000 Accounts Payable $39,000 Building $58,000 Cash and Cash Equivalents $84,000 Common Stock $122,000 Interest Payable $2,500 Land $41,000 Short−term Investments $10,000 Income Taxes Payable $15,000 Equipment $61,500 Supplies $6,000 What is the amount of Retained Earnings at the end of the​ year?

$64,000 Assets Accounts Receivables$32,000 Building$58,000 Cash and Cash Equivalents$84,000 Land$41,000 Short term Investments$10,000 Equipment$61,500 Supplies$6,000 Total Assets (A)$292,500 Liabilities and Equity Long term Note Payable$50,000 Accounts Payable$39,000 Common stock$122,000 Interest payable$2,500 Income Tax payable$15,000 Total Liabilities and Equity (B)$228,500 Retained Earnings (A-B)$64,000

Census Company had the following accounts and balances at the end of the first year of operations. What are total liabilities at the end of the​ year? Cash ​$72,000 Accounts Payable $14,000 Common Stock $21,000 Dividends $12,000 Operating Expenses $21,000 Accounts Receivable $58,000 Inventory $46,000 Long−term Notes Payable $38,000 Revenues $110,000 Salaries Payable $26,000

$78,000 total liabilities = accounts payable + long term notes payable + salaries payable (14,000 + 38,000 + 26,000) = 78,000

Assume that beginning retained earnings is $500. Revenues for the year total $255 while expenses total $175. The company paid out dividends during the year totaling $30. What is net​ income?

$80 net income = revenues for year total - expenses total 255 - 175 = 80

Question content area top Part 1 At the end of the current accounting​ period, account balances were as​ follows: Cash, $27,000​; Accounts​ Receivable, $43,000​; Common​ Stock, $22,000​; Retained​ Earnings, $10,000. Liabilities at the end of the period​ were: A. $38,000. B. $70,000. C. $48,000. D. $60,000.

A. $38,000. Total liabilities = Total asset -total equity Total asset = 27,00 + 43,000 = 70,000 Total equity = 22,000 + 10,000 = 32,000 Total liabilities = 38,000

You get an especially good buy on a laptop for your​ business, paying only​ $300 when it normally costs​ $800. What accounting concept or principle will govern what is recorded as the accounting value for this​ laptop? A. Historical cost principle B. Entity assumption C. ​Stable-monetary unit

A. Historical cost principle

Advantages of a corporation​ include: A. Limited liability of the stockholders B. Mutual agency C. A single owner D. The double taxation of distributed profits

A. Limited liability of the stockholders

Revenues were $144,000​, expenses were $140,000​, and cash dividends declared and paid were $3,000. What were the net income and the change in retained earnings for the​ period? A. Net income was $4,000​; the change in retained earnings was $1,000. B. Net income was $4,000​; the change in retained earnings was $4,000. C. Net income was $144,000​; the change in retained earnings was $7,000. D. Net income was $144,000​; the change in retained earnings was $141,000

A. Net income was $4,000​; the change in retained earnings was $1,000. Net income = Revenue -expense 144,000 - 140,000 = 4,000 4,000 - 3,000 = 1,000

Cash dividends​ declared: A. decrease retained earnings on the statement of retained earnings. B. increase expenses on the income statement. C. decrease operating activities on the statement of cash flows. D. decrease revenue on the income statement.

A. decrease retained earnings on the statement of retained earnings.

the balance sheet includes​ the: A. ending balance in retained earnings. B. beginning balance in retained earnings. C. amount of net income or net loss. D. amount of cash dividends paid to stockholders.

A. ending balance in retained earnings.

Which financial statement answers the following​ question: How well did the company perform during the​ year? A. income statement B. statement of retained earnings C. statement of cash flows D. balance sheet

A. income statement

Enhancing qualitative characteristics of accounting information do NOT​ include: A. materiality. B. comparability. C. verifiability. D. timeliness.

A. materiality.

The owner of a​ ________ is personally liable for all the​ business's debts. A. proprietorship B. corporation C. limited−liability company D. All of the above are correct.

A. proprietorship

Which of the following accounts are​ ASSETS? ​(Select all that​ apply.) Question content area bottom Part 1 A. Land B. Accounts receivable C. Bonds payable D. Retained earnings E. Common stock F. Accounts payable G. Cash H. Investments

A. Land B. Accounts Receivable G. Cash H. Investments

Question content area top Part 1 When total expenses exceed total​ revenues, the result​ is: A. a net loss. B. a net profit. C. a dividend. D. an increase to retained earnings.

A. a net loss

The accounting equation can be stated​ as:

Assets − Liabilities = Stockholders' Equity OR Assets​ = Liabilities​ + Paid−in-Capital + Retained Earnings.

Which financial statement answers the following​ question: What is the​ company's financial position at fiscal year​ end? A. income statement B. balance sheet C. statement of cash flows D. statement of retained earnings

B. balance sheet

The two types of accounting​ are: A. internal and external. B. financial and managerial. C. profit and nonprofit. D. bookkeeping and decision−oriented.

B. financial and managerial.

Which of the following statements is​ TRUE? A. Dividends reduce net income. B. Dividends reduce retained earnings. C. Dividends are expenses of a business. D. Dividends increase retained earnings.

B. Dividends reduce retained earnings.

Which statement is the only statement that is as of ONE date​ (rather than for a period of​ time)? A. Income statement B. Statement of retained earnings C. Balance sheet D. Statement of cash flows

C. Balance sheet

Which​ statement(s) reports the​ revenues, gains,​ expenses, and losses of an​ entity? A. Balance sheet B. Statement of cash flows and income statement C. Income statement D. Statement of retained earnings and statement of operations

C. Income statement

The income​ statement: A. must cover only a month in time. B. reports the results of operations since the inception of the business. C. covers a defined period of time. D. is not dated.

C. covers a defined period of time.

Liabilities​ are: A. future economic benefits to which a company is entitled. B. a form of paid−in capital. C. debts payable to outsiders called creditors. D. the outflow of resources that decrease common stock.

C. debts payable to outsiders called creditors.

Which financial statement reports cash payments and cash receipts over a period of​ time? A. balance sheet B. income statement C. statement of cash flows D. statement of retained earnings

C. statement of cash flows

An​ investor, wishing to assess the reasons for a change in retained earnings over a period of a​ year, would probably examine​ the: A. balance sheet. B. income statement only. C. statement of retained earnings. D. statement of cash flows and the income statement.

C. statement of retained earnings.

The major types of transactions that affect retained earnings​ are: A. revenues and liabilities. B. assets and liabilities. C. ​revenues, expenses, and dividends. D. paid−in capital and common stock.

C. ​revenues, expenses, and dividends.

Which is the CORRECT order for items to appear on the income​ statement? A. interest​ expense, revenues, income from operations B. cost of goods​ sold, revenues, net income C. ​revenues, operating​ expenses, net income D. ​revenues, net​ income, operating expenses

C. ​revenues, operating​ expenses, net income

All of the following are expenses EXCEPT​ for: A. Cost of products and services. B. Depreciation Expense. C. Dividends. D. Salary Expense.

C. Dividends

Which of the following increases retained​ earnings? A. expenses B. net loss C. net income D. dividends

C. net income

A construction company paid $81,000 cash for land used in the business. At the time of​ purchase, the land had a list price of $89,000. When the balance sheet was​ prepared, the fair value of the land was $86,000. At what amount should the land be reported on the balance sheet of the​ company? A. $86,000 B. $89,000 C. $81,000 D. $85,000

C.$ 81,000 $81,000

If an investor wants to know a​ company's cash balance at the end of the​ year, this balance is reported on​ the: A. statement of cash flows. B. balance sheet. C. income statement. D. A and B.

D. A and B.

Which of the following is a TRUE statement about the characteristics of​ partnerships? A. The partnership agreement must be in writing. B. In a limited liability​ partnership, all partners have limited liability for the​ partnership's debts. C. General partners in a general partnership have mutual agency and limited liability for the​ partnership's debts. D. Income and losses of the partnership​ "flow through" to the partners.

D. Income and losses of the partnership​ "flow through" to the partners.

All of the following will appear on the income statement EXCEPT​ for: A. expenses. B. revenues. C. gains. D. assets.

D. assets

The principle stating that assets acquired by the business should be recorded at their actual cost on the date of purchase​ is: A. stable−monetary−unit. B. reliability. C. objectivity. D. historical cost.

D. historical cost.

A potential​ investor, interested in predicting the earnings of a company in the​ future, should examine​ the: A. Balance Sheet only. B. Statement of Retained Earnings. C. Statement of Retained Earnings and Balance Sheet. D. Income Statement only.

D. income statement only

The CORRECT data flow from one financial statement to the next​ is: A. statement of retained​ earnings, income​ statement, balance​ sheet, statement of cash flows. B. balance​ sheet, statement of retained​ earnings, income​ statement, statement of cash flows. C. statement of retained​ earnings, income​ statement, statement of cash​ flows, balance sheet. D. income​ statement, statement of retained​ earnings, balance​ sheet, statement of cash flows.

D. income​ statement, statement of retained​ earnings, balance​ sheet, statement of cash flows.

​Accounting: A. processes data into reports and communicates the data to decision makers. B. measures business activities. C. is often called the language of business. D. is all of the above.

D. is all of the above.

The assets of a​ company: A. must equal the liabilities of the company. B. include​ property, plant, and equipment and accounts payable. C. include short−term investments and notes payable. D. represent economic resources that are expected to produce a future benefit.

D. represent economic resources that are expected to produce a future benefit.

Net income is computed​ as: A. revenues − expenses​ + dividends. B. revenues − expenses − dividends. C. revenues​ + expenses. D. revenues − expenses.

D. revenues − expenses.

Information must be sufficiently transparent so that it makes sense to reasonably informed users of the financial​ statements, such as creditors. This qualitative characteristic of information is​ called: A. relevant. B. verifiability. C. faithful representative. D. understandability.

D. understandability.

The accounting equation consists of all of the following types of accounts​ EXCEPT: Assets B. Liabilities C. ​Stockholders' equity D. Revenues

D. Revenues

Which of the following entities use financial accounting​ information? A. Creditors B. Investors C. Regulatory bodies D. All of the above

D. all of the above

In​ 1990, Johnson Company purchased a building for $200,000. In​ 2022, a real estate professional says the building has a fair value of $1,100,000. In​ 2022, a similar building down the street recently sold for​ $900,000. What​ value, before consideration of accumulated​ depreciation, is reported for the building on the balance sheet at December​ 31, 2022? A. ​$900,000 B.$ 1,100,000 $1,100,000 C.$ 650,000 $650,000 D.$ 200,000 $200,000

D.$ 200,000 $200,000

Beck Company had the following accounts and balances at the end of the first year of operations. What is net income or net loss for the​ year? Cash $77,000 Accounts Payable $12,000 Common Stock $21,000 Dividends $12,000 Operating Expenses $12,000 Accounts Receivable $50,000 Inventory $49,000 Long−term Notes Payable $33,000 Revenues $107,000 Salaries Payable $27,000

net income of $95,000 Net Income = Revenue - Operating Expenses (107,000 - 12,000) = 95,000

Choose all of the accounts that would be listed on the balance sheet​

stockholders equity liabilities assets