ACCT EXAM 1

Paying cash to settle a salaries payable obligation will affect which section of the statement of cash flows? A) Financing activities B) Operating activities C) Noncash activities D) Investing activities

Operating activities

Which of the following accounts are permanent A. Retained Earnings B. All income statement accounts C. Dividends D. All balance sheet accounts including dividends

Retained Earnings

Revenue on account amounted to $6,200. Cash collections of accounts receivable amounted to $5,900. Cash paid for expenses was $4,100. The amount of employee salaries accrued at the end of the year was $1,900. What is the net cash flow from operating activities for the year? A) $1,800 B) $1,900 C) $2,100 D) $7,700

$1,800

The balance sheet of the Algonquin Company reported assets of $50,000 , liabilities of $22,000 and common stock of $15,000. Based on this information only, what is the amount of retained earnings A. $7,000 B. $57,000 C. $13,000 D. $87,000

$13,000

Revenue on account amounted to $5,000. Cash collections of accounts receivable amounted to $2,300. Expenses for the period were $2,100. The company paid dividends of $450. What was the amount of net income for the period? A) $1,200 B) $2,900 C) $2,850 D) $2,450

$2,900

Revenue on account amounted to $6,000. Cash collections of accounts receivable amounted to $3,800. Expenses for the period were $3,100. The company paid dividends of $950. What was the amount of net income for the period? A) $1,950 B) $2,900 C) $700 D) $2,850

$2,900

At the beginning of year 2, X company had assets of $300, liabilities of $150, liabilities of $150, and common stock of $50. During year 2, the company earned revenue of $500 , incurred expenses of $200 , and paid dividends of $50. All transactions were cash transactions..The amount of net income reported on X Company's December 31, Year 2 income statement would be A) $500 B)$300 C)$250 D) None of these answers are correct.

$300

If Ballard Company reported assets of $500 and liabilities of $200, Ballard's stockholders' equity equals: A. $300 B. $500 C. $700 D. Cannot be determined

$300

Finn Company reported assets of $1,000 and stockholders' equity of $600. What amount will Finn report for liabilities? A. $400 B $600 C. $1,600 D. Cannot be determined

$400

As of December 31, year 1, year 1, mason Company had $500 cash. During year 2, Mason had 500 cash. During Year 2, Mason earned $1,200 of cash revenue and paid $800 of cash expenses. What is the amount of cash that would be reported on the balance sheet at the end of year 2?

$900

As of December 31, Year 2, Bristol Company had $100,000 of assets, $40,000 of liabilities and $25,000 of retained earnings. What percentage of Bristols assets were obtained from investors A. 60% B. 25% C. 40% D. 35%

35%

Which of the following is an accurate definition of the term Asset A. An obligation to creditors B. A resource that will be used to produce revenue C. A transfer of wealth from the business to its stockholders D. A sacrifice incurred from operating the business

A resource that will be used to produce revenue

Which of the following is (are) sources of assets to a business A. Creditors B. Investors C. Operations D. All the answers represent sources of assets

All the answers represent sources of assets

How will accounts receivable appear on the following financial statements? A) Asset on the balance sheet B) Expense on the income statement C) Liability on the balance sheet D) Revenue on the income statement

Asset on the balance sheet

Hazeltine Company issued common stock for $200,000 cash. As a result of this event: A. Assets increased B. Stockholders equity increased C. Claims increased D. Assets, claims, and stockholders equity all increased

Assets, claims, and stockholders equity all increased

Which of the following is an accurate depiction of the accounting equation A. Assets= Liabilities+ Common Stock + Retained earnings B. Assets= Liabilities + Common Stock - Expenses C. Assets= Liabilities + Retained earnings - Dividends D. Assets= Liabilities + Common Stock + Dividends

Assets= Liabilities+ Common Stock + Retained earnings

Liabilities are shown on the: A) Income statement B) Balance sheet C) Statement of cash flows D) Statement of changes in stockholders' equity

Balance sheet

The balance of Accounts Receivable is shown on which of the following financial statements? A) Income statement B) Balance sheet C) Statement of cash flows D) None of these answer choices

Balance sheet

Which of the following financial statements provides information about a company as of a specific point of time A. Income statement B. Balance sheet C. Statement of cash flows D. Statement of changes in stockholders equity

Balance sheet

The amount of retained earnings is shown on the A. Income statement B. Balance sheet C. Statement of Cash flows D. Statement of changes in stockholders equity E. Balance sheet and statement of changes in stockholders equity

Balance sheet and statement of changes in stockholders equity

The amount of retained earnings is shown on the A. Income statement B. Balance sheet C. Statement of Cash flows D. statement of changes in stockholders equity E. Balance sheet and statement of changes in stockholders equity

Balance sheet and statement of changes in stockholders equity

The heritage company is a manufacturer of office furniture, Which term best describes heritages role in society A. Business B. Regulatory agency C. Consumer D. Resource Owner

Business

The transaction, provided services for cash, affects which two accounts A. Revenue and Expense B. Cash and Revenue C. Cash and Revenue D. Cash and Dividends

Cash and Revenue

Which of the following items would appear in the financing activities section of the statement of cash flows A. Cash outflow for the purchase of land B. Cash inflow from sales revenue C. Cash inflow from issuance of common stock D. Cash outflow for the payment of accounts payable

Cash inflow from issuance of common stock

Which of the following items appears in the investing activities section of the statement of cash flows A. Cash inflow from interest revenue B. Cash inflow from the issuance of common stock C. Cash outflow for the payment of dividends D. Cash outflow for the purchase of land

Cash outflow for the purchase of land

Which of the following would appear in the investing activities section of the statement of cash flows? A) Cash outflow for the purchase of supplies B) Cash inflow from interest revenue C) Cash inflow from issuance of common stock D) Cash outflow for the purchase of land

Cash outflow for the purchase of land

Which of the following items is an example of revenue A. Cash received from a bank loan B. Cash received from investors from the sale of common stock C. Cash received from customers at the time services were provided D. Cash received from the sale of land for its original selling price

Cash received from customers at the time services were provided

The statement of changes in stockholders equity shows changes in which of the following accounts A. Retained earnings and assets B. Assets and liabilities C. Common stock and retained earnings D. Liabilities and common stock

Common stock and retained earnings

Which resource providers lend financial resources to a business with the expectation of repayment with interest A. Consumers B. Creditors C. Investors D. Owners

Creditors

Which term describes a distribution of the business's assets back to the owners of the business A. Liability B. Dividend C. Retained earnings D. Common Stock

Dividend

Which of the following financial statement elements is closed at the end of an accounting cycle? A) Dividends B) Common stock C) Assets D) Liabilities

Dividends

Salaries expense appears in the A. Liabilities section of the balance sheet B. Financing activities section of the statement of cash flows C. Asset section of the balance sheet D. Expense section of the income statement

Expense section of the income statement

What types of accounts are "matched" when the matching concept is used in a discussion of accrual accounting? A) Expenses and revenues B) Expenses and liabilities C) Assets and stockholders' equity D) Assets and liabilities

Expenses and revenues

Which of the following groups has the primary responsibility for establishing generally accepted accounting principles for business entities in the United States A. Securities and Exchange Commission B. U.S. Congress C. International Accounting Standards Board D. Financial Accounting Standards Board

Financial Accounting Standards Board

Which type of accounting information is intended to satisfy the needs of external users of accounting information A. Cost accounting B. Managerial accounting C. Tax accounting D. Financial accounting

Financial accounting

In which section of a statement of a cashflows would the payment of cash dividends be reported A. Investing Activities B. Operating activities C. Financing activities D. Dividends are not reported on the statement of cash flows

Financing activities

Financial accoutning standards are known collectively as GAAP, what does that acronym stand for A. Generally accepted accounting principles B. Generally applied accounting procedures C. Governmentally approved accounting practices D. Generally authorized auditing principles

Generally Accepted Accounting Principles

If total assets decrease, then which of the following statements is true A. Liabilities must increase and retained earnings must decrease B. Common stock must decrease and retained earnings must increase C. Liabilities , common stock, or retained earnings must decrease D. Liabilities, common stock, or retained earnings must increase

Liabilities , common stock, or retained earnings must decrease

How will accounts payable appear on the following financial statements? A) Expense on the income statement B) Revenue on the income statement C) Liability on the balance sheet D) Asset on the balance sheet

Liability on the balance sheet

What is the primary goal of the accrual basis of accounting? A) Report revenue when received. B) Match assets and liabilities in the proper period C) Report expenses when cash disbursements are made. D) Match revenues and expenses in the proper period.

Match revenues and expenses in the proper period.

Which of the following events would not require an end-of-year adjusting entry? A)Purchasing supplies for cash B)Paying for one year's rent on July 1 C) Providing services for cash D) Each of these answer choices would require an end-of-year adjusting entry.

Providing services for cash

Which of the following correctly states the proper order of the accounting cycle? A) Record transactions, adjust accounts, close temporary accounts, prepare statements. B) Adjust accounts, record transactions, close temporary accounts, prepare statements. C) Record transactions, adjust accounts, prepare statements, close temporary accounts. D) Adjust accounts, prepare statements, record transactions, close temporary accounts.

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

Which of the following transactions does not involve an accrual? A) Recording interest earned that will be received in the next period B) Recording operating expense incurred but not yet paid C) Recording salary expense incurred but not yet paid D) Recording the pre-payment of two years' worth of insurance

Recording the pre-payment of two years' worth of insurance

Which of the following accounts is not closed at the end of an accounting cycle? A) Revenues B) Retained earnings C) Dividends D) Expenses

Retained earnings

which term describes assets generated through operations that have been reinvested into the business A. Liability B. Dividend C. Common stock D. Retained earnings

Retained earnings

Which of the following statements about accrual accounting is true ? A)Revenue is recorded only when cash is received. B)Expenses are recorded when they are incurred. C)Revenue is recorded in the period when it is earned. D)Revenue is recorded in the period when it is earned and expenses are recorded when they are incurred.

Revenue is recorded in the period when it is earned and expenses are recorded when they are incurred.

Which of the following accounts would not appear on a balance sheet? A)Service Revenue. B)Salaries Payable. C)Unearned Revenue. D)Neither Service Revenue nor Unearned Revenue would appear on a balance sheet.

Service Revenue.

Dividends paid by a company are shown on the: A) Income statement B) Statement of changes in stockholders' equity C) Statement of cash flows D) Statement of changes in stockholders' equity and statement of cash flows

Statement of changes in stockholders' equity and statement of cash flows

Which of the following statements about the balance in a revenue account at the beginning of an accounting period is true? A) The beginning balance of a revenue account will always be zero. B) The beginning balance of a revenue account equals last period's ending balance. C) The beginning balance of a revenue account will always be higher than the previous periods ending balance. D) The beginning balance of a revenue account will equal to the amount of retained earnings for the previous period.

The beginning balance of a revenue account will always be zero.

Chow Company earned $1,500 of cash revenue, paid $1,200 for cash expenses, and paid a $200 cash dividend to its owners. Which of the following statements is true? A) The net cash inflow from operating activities was $100. B) The net cash outflow for investing activities was $200. C) The net cash inflow from operating activities was $300. D) The net cash outflow for investing activities was $100.

The net cash inflow from operating activities was $300.

What happens when a company collects cash from accounts receivable? A) The asset accounts receivable increases. B) Stockholders' equity increases. C) Liabilities decrease. D) Total assets are not affected.

Total assets are not affected.

Li Company paid cash to purchase land. As a result of this accounting event, which of the following statements is true A. Total assets decreased B. Total assets were unaffected C. Total stockholders equity decreased D. Both assets and total stockholders equity decreased

Total assets were unaffected

Expenses are shown on the:

income statement

Which of the following items would appear in the cash flow from financing activities section of a statement of cash flows? A. Paid cash for dividends B. Received cash for common stock C. Sold land for cash D. Paying cash for dividends as well as receiving cash from common stock

paying cash for dividends as well as receiving cash from common stock

Dividends are reported on which financial statement A. Balance sheet B. Income statement C. statement of changes in stockholders equity D. Both the income statement and statement of changes in stockholders equity

statement of changes in stockholders equity