ACCT 203: Ch 1 - Part 2 Review Questions

Given the list of accounts below, identify which of them would appear on a balance sheet. (Check all that apply.) Rental Revenue Cash Accounts Payable Equipment Utilities Expense Retained earnings, 12/31 Rent Expense Supplies

Cash Accounts Payable Equipment Retained earnings, 12/31 Supplies

The correct definition of a balance sheet includes which of the following statements? (Check all that apply.) The statement explains the changes in equity over a period of time. The statement reports revenues and expenses over a period of time. The statement reports the equality of the accounting equation at any point in time. The statement reports the financial position of a company at a point in time. The statement reports assets, liabilities and equity at a point in time.

The statement reports the equality of the accounting equation at any point in time. The statement reports the financial position of a company at a point in time. The statement reports assets, liabilities and equity at a point in time.

An income statement reports a company's net income or net loss during a period. Which of the following accounts would appear on an income statement? (Check all that apply.) Wages Expense Rent Expense Service Revenue Rent Revenue Accounts Payable Cash

Wages Expense Rent Expense Service Revenue Rent Revenue

From the following statements, identify the correct definition of a liability. A company's obligation to provide assets, products or services to others. Something of value that a business owns. The claims of a business's owners.

A company's obligation to provide assets, products or services to others.

Which list of accounts below, identifies only accounts that would appear on a balance sheet. Rental Revenue, Accounts Payable, Accounts Receivable Wages Expense, Cash, Supplies Common Stock, Equipment, Accounts Payable Supplies Expense, Supplies, Dividends

Common Stock, Equipment, Accounts Payable

Identify which of the following lists of accounts would belong on the statement of retained earnings. Retained earnings and Cash Dividends and Account Payable Retained earnings and Dividends Service Revenue and Wages Expense

Retained earnings and Dividends

Identify the main sections on a statement of cash flows. (Check all that apply.) Cash flows from operating activities Cash flows from investing activities Cash flows from borrowing activities Cash flows from owner activities Cash flows from financing activities

Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities

Recall how to calculate net income using the following information: Total Assets = Liabilities + Common Stock - Dividends +Revenues - Expenses $50,000 = $10,000 +$10,000 - $2,000 + $35,000 - $3,000 Revenues + Expenses = Net Income Assets - Liabilities = Net Income Revenues - Expenses = Net Income Common Stock - Expenses = Net Income

Revenues - Expenses = Net Income

Which statements below define a liability? (Check all that apply.) The company obligations to provide assets, products or services to others A creditor's claims against the assets of a business An amount owed to a creditor An amount owed to the owners of the business Resources owned by the business

The company obligations to provide assets, products or services to others A creditor's claims against the assets of a business An amount owed to a creditor

Which statements below define equity? (Check all that apply.) They are resources owned by the business. Equity is equal to assets minus liabilities. Claims of the owner(s) on the assets of the business It is the total dollar amount of debt owed to creditors of the business.

Equity is equal to assets minus liabilities. Claims of the owner(s) on the assets of the business

From the following statements, identify the correct definition of equity. Equity is something of value that a business owns or possesses. Equity refers to the claims of the owners on the assets of a business. Equity represents the dollar amount owed to a creditor.

Equity refers to the claims of the owners on the assets of a business.

The statement of retained earnings explains changes in equity from net income (or loss) and from any ______ over a period of time. (Select the accounts below which will correctly complete this question.) dividends revenues liabilities

dividends

Net income is calculated using the following formula: ____________(expenses/revenues/assets) - ___________________ (expenses/revenues/assets) = Net income. Use one word for each blank.

revenues - expenses = net income

Define what the income statement reports by completing the following sentence: The income statement describes a company's ___________ (assets/revenues) and ___________ (expenses/liabilities) along with the resulting net income or loss over a period of time due to earnings related activities.

revenues and expenses