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