accounting exam 1

Nelson Company experienced the following transactions during Year 1, its first year in operation. Acquired $8,800 cash by issuing common stock. Provided $5,100 of services on account. Paid $2,300 cash for operating expenses. Collected $3,300 of cash from customers in partial settlement of its accounts receivable. Paid a $240 cash dividend to stockholders. What is the balance of the retained earnings that will be reported on the balance sheet as of December 31, Year 1? (question 8 practice exam)

$2,560

The following account balances were taken from the adjusted trial balance of Kendall Company: Revenues$24,800Operating Expenses15,800Dividends5,300Retained Earnings17,800 What is the Retained Earnings account balance that will be included on the post-closing trial balance? (18 on practice)

$21,500

Sales on account amounted to $87,000. Sales returns were $2,100 and sales discounts were $900. Cost of goods sold amounted to $50,000. Based on this information the amount of gross margin was

$34,000

Walter Company's multistep income statement shows cost of goods sold of $42,000, a gross margin of $37,000, operating income of $10,000 and a loss of $19,000 on the sale of land. Based on this information the sales revenue amounted to

$79,000

The following accounts and balances were drawn from the records of Barnes Company: Cash$3,100Accounts receivable$2,400Equipment$12,800Accumulated depreciation$2,100Accounts payable$2,300Common stock$5,900 Based on this information alone the amount of Barnes's retained earnings is: (question 7 practice exam)

$8,000

The following account balances were drawn from the Year 1 financial statements of Grayson Company: Cash$5,700Accounts payable$1,900Accounts receivable$2,800Common stock?Land$9,300Retained earnings, January 1$4,000 Revenue$10,800 Expenses$7,900 What is the balance of the Common Stock account? (question 9 on practice exam)

$9,000

Retained earnings at the beginning and ending of the accounting period were $500 and $1,100, respectively. Revenues of $1,900 and dividends paid to stockholders of $400 were reported during the period. What was the amount of expenses reported for the period?

$900

Turner Company reported assets of $20,000 (including cash of $9,000), liabilities of $8,000, common stock of $7,000, and retained earnings of $5,000. Based on this information, what can be concluded?

25% of Turner's assets are from prior earnings, $5,000 is the maximum possible dividend, and 40% of assets are the result of borrowed resources.

Assume the total amount of the debit column of a trial balance is greater than the total amount of the credit column. Which of the following could have caused this result?

A $250 entry to accounts receivable was recorded as $520. The corresponding credit to sales was recorded correctly.

Glavine Company repaid a bank loan with cash. How should the cash flow from this event be shown on the horizontal statements model?

A financing activity that decreases cash and decreases liabilities

Amarillo Company experienced the following events during its first accounting period. (1) Purchased $5,000 of inventory on account under terms 1/10, n/30. (2) Returned $1,000 of the inventory purchased in Event 1. (3) Paid the remaining balance in accounts payable within the discount period for the inventory purchased in Event 1. Based on this information the journal entry necessary to record the purchase discount is

Account TitleDebitCreditAccounts Payable40 Inventory 40

Beachwood Clothing Company operates a chain of high end men's clothing stores. Beachwood owned land that was originally purchased as a store location. However, after abandoning the plan to build a new store, the land that had cost $5,000 was sold for $6,000 cash. Which of the following journal entries would be required to record the sale of the land?

Account TitleDebitCreditCash6,000 Land 5,000Gain from Sale of Land 1,000

Edwards Shoe Store sold shoes that cost the company $5,700 for $8,200. Which of the following journal entries would be required to recognize the cost of goods sold? (Ignore the effects of the associated revenue recognition.) (19 on practice)

Account TitleDebitCreditCost of goods sold5,700 Inventory 5,700

Which of the following is a (are) temporary account(s)?

All income statement accounts

Which of the following types of accounts is closed at the end of an accounting cycle?

Dividends

At the end of Year 1, the following information is available for Grumpy, Happy, and Doc Companies. GrumpyHappyDocTotal Assets$2,000,000$2,000,000$3,000,000Total Liabilities1,400,000800,0001,800,000Stockholders' Equity600,0001,200,0001,200,000Net Income118,000190,000150,000 Which company is the most profitable from the stockholders' perspective? (question 16 on practice exam)

Grumpy

Revenues are reported on which of the following financial statement(s)?

Income statement

Yowell Company began operations on January 1, Year 1. During Year 1, the company engaged in the following cash transactions: 1) issued stock for $58,000 2) borrowed $34,000 from its bank 3) provided consulting services for $56,000 4) paid back $24,000 of the bank loan 5) paid rent expense for $13,500 6) purchased equipment costing $21,000 7) paid $3,900 dividends to stockholders 8) paid employees' salaries, $30,000 What is Yowell's net cash flow from operating activities?

Inflow of $12,500

Jackson Company paid $500 cash for salary expenses. Which of the following accurately reflects how this event affects the company's financial statements? Balance SheetIncome StatementStatement of Cash FlowsAssets=Liabilities+Stockholders' EquityRevenue−Expense=Net IncomeA.n/a 500 (500)n/a 500 (500) n/aB.(500) n/a (500)n/a 500 (500)(500)OAC.(500) n/a (500)n/a n/a n/a(500)OAD.(500) n/a (500)n/a 500 (500)(500)IA (question 6 on practice exam)

Option B

Peterson Corporation recorded an adjusting entry using T-accounts as follows: Depreciation ExpenseDebitCredit 750 Accumulated DepreciationDebitCredit 750 Which of the following reflects how this adjustment affects the company's financial statements? Balance SheetIncome StatementStatement of Cash FlowsAssets=Liabilities+Stockholders' EquityRevenue−Expenses=Net IncomeA.+ + n/an/a n/a n/a+FAB.− n/a −n/a + −NAC.+ n/a ++ n/a ++OAD.− − n/an/a + −−OA (question 14 on practice exam)

Option B

Which of the following correctly states the proper order of the steps in the accounting cycle?

Record transactions, adjust accounts, prepare statements, close temporary accounts.

Fitzpatrick Company had $500 of accrued salary expenses that will be paid during the following accounting period. How would the adjusting entry be recorded in the company's T-accounts?

Salaries Expense500 Salaries Payable 500

Which of the following is not one of the common elements that are typically present when fraud occurs?

The assistance of others

What happens when merchandise is delivered FOB destination?

The seller pays the freight cost and records an expense.