accounting practice exam 1 questions

If a company has current assets of $2,100,000 and current liabilities of $500,000, calculate its working capital.

$1,600,000

If a company has assets of $5,000,000, liabilities of $3,000,000, and retained earnings of $1,200,000, how much is total stockholders' equity?

$2,000,000

The company reported the following information for the year ended December 31, 2019: Net income $100,000 Dividends 6,000 Retained earnings at December 31, 2019 $120,000 Refer to Beard Marine. What was the balance of Retained Earnings at January 1, 2019?

$26,000

The following balances are provided: Cash $234,000 Accounts Payable $ 97,000 Inventories 121,000 Notes Payable (due 2018) 211,000 Land 453,000 Accounts Receivable 46,000 Refer to Benchmark Surveyors. Calculate Current Assets.

$401,000

On January 1, 2019, a company reported assets of $1,000,000 and liabilities of $600,000. During 2019, assets decreased by $100,000 and Stockholders' Equity decreased $200,000. What is the amount of liabilities at December 31, 2019?

$700,000

Which of the following statements best describes the effects of recognizing revenue earned by a business entity?

Assets and stockholders' equity increase when either cash or credit sales are made.

Which one of the following financial statements show the end of the year cash balance for a business entity?

Balance Sheet and Statement of Cash Flows

Which set of items below are current assets?

Cash, Accounts Receivable, Inventory, and Office Supplies

Which of the following best describes the term "retained earnings" of a company?

The accumulated net income of a company that has not been distributed to owners in the form of dividends.

The purchase of office equipment on credit has what effect on the accounting equation?

assets and liabilities increase

All of the following accounts have normal credit balances except

inventory

The company reported the following items on its financial statements for the year ended December 31, 2019: Sales $780,000 Cost of Sales $700,000 Selling, general & administrative expense 20,000 Other Expense 15,000 Dividends 5,000 Income Tax Expense 12,500 Refer to Bay Camera. What is the company's Net Income for the current year?

$32,500

This company's end-of-year balance sheet consisted of the following amounts: Cash $75,000 Accounts Receivable $250,000 Property, plant & equipment 350,000 Long-term debt 200,000 Capital stock 500,000 Accounts payable 100,000 Retained earnings ? Inventory 175,000 Refer to Bargain Spot Fabrics. What amount should the company report on its Balance Sheet for Total Assets?

$850,000

Which of the following will not cause a trial balance to be out of balance?

A credit entry is posted to the wrong account, but still as a credit.

Hesson Properties, Inc. The following transactions occurred during June: June 1 Purchased two new maintenance carts on account at $750 each. Payment is due in 30 days June 8 Accepted $500 of advance payments from customers for services to be provided next month June 15 Received the utility bill for $300. Payment is due in 30 days June 20 Billed customers $1,500 services provided. Payment is due in 30 days. June 30 Received $500 from customers who were billed earlier Refer to Hesson Properties. What journal entry is required to record the purchase of the carts?

Equipment: 1,500 Accounts Payable: 1,500

Which of the following are Noncurrent assets?

machinery and equipment

B&B Painting reported the following information for the year ended December 31, 2019. Revenues $2,500,000 Expenses 2,000,000 Retained Earnings at December 31, 2018 100,000 Retained Earnings at December 31, 2019 450,000 How much was paid out in dividends in 2019?

$150,000

The company reported the following items on its financial statements for the year ended December 31, 2019: Sales $780,000 Cost of Sales $700,000 Selling, general & administrative expense 20,000 Other Expense 15,000 Dividends 5,000 Income Tax Expense 12,500 Refer to Bay Camera. What amount will be reported as Retained Earnings on the Balance Sheet at December 31, 2019, assuming this is the first year of operations?

$27,500

This company's end-of-year balance sheet consisted of the following amounts: Cash $75,000 Accounts Receivable $250,000 Property, plant & equipment 350,000 Long-term debt 200,000 Capital stock 500,000 Accounts payable 100,000 Retained earnings ? Inventory 175,000 Refer to Bargain Spot Fabrics. What is the retained earnings balance at the end of the current year?

$50,000

Which one of the following correctly represents one of the basic financial statement models?

Beginning Retained Earnings + Net Income − Dividends = Ending Retained Earnings