CH 1 part 2

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

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

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

Accounts Payable, equipment, supplies, cash, retained earnings 12/31

Identify the correct definition of an asset: Multiple choice question. An asset refers to the claims of the owners An asset is an amount owed to a creditor An asset is something of value that a business owns or controls

An asset is something of value that a business owns or controls

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

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

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

Which of the statement(s) below define(s) an asset? (Check all that apply.) An amount owed to the owners Resources controlled by the business An amount owned An amount owed to a creditor Resources with expected future benefits

Resources controlled by the business An amount owned Resources with expected future benefits

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

Retained earnings and Dividends

Recall how to calculate net income using the following information: Common Stock - Expenses = Net Income Assets - Liabilities = Net Income Revenues - Expenses = Net Income Revenues + Expenses = Net Income

Revenues - Expenses = Net Income

The correct definition of an income statement includes which of the following? The statement identifies cash flows and outflows during a period of time The statement explains changes in equity over a period of time. The statement describes a company's assets, liabilities and equity at a point in time. The statement describes a business is revenues and expenses over a period of time.

The statement describes a business's revenues and expenses over a period of time.

The correct definition of a balance sheet includes which of the following statements? (Check all that apply.) Multiple select question. 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 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.

Which of the statement(s) below define(s) an asset? (Check all that apply.) Multiple select question. An amount owed to the owners An amount owed to a creditor An amount owned Resources controlled by the business Resources with expected future benefits

an amount owned Resources controlled by the business resources with expected future benefits

Each of the financial statements on the left are described on the right. Identify the description that goes with each financial statement. Instructions balance sheet income statement statement of retained earnings statement of cash flows reports the balance of assets, liabilities and equity at a point in time reports the changes in the equity during a period of time reports the revenues and expenses incurred by a business for a period of time identifies the cash inflows and outflows over a period of time

balance sheet - Reports the balance of assets, liabilities and equity at a point in time income statement - Reports the revenues and expenses incurred by a business for a period of time statement of retained earnings - Reports the changes in equity during a period of time Statement of Cash Flows - Statement of Cash Flows Drop zone Identifies the cash inflows and outflows over a period of time

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.) Multiple choice question. revenues dividends liabilities

dividends

Other names for equity in a corporation include: Multiple choice question. net assets or residual equity liabilities and investments owner's claims and owner's payables

net assets or residual equity

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

revenues expenses

Net income is calculated using the following formula: __________ - __________ = Net income. Use one word for each blank.

revenues expenses