Chapter 1

Thompson Corporation begin the year with cash of $133,000 and land that cost $24,800. During the year summer earned service revenue of $255,000 and had the following expenses: Salaries, $175,000; $81,000; And utilities, $30,000. At your end Thompson's cash balance is down to $433,000. How much net income (or net loss) did Thompson experience for the year? $(31,000) $80,000 $(121,000) $(1000)

$(31,000)

Boston company has current assets of $70,000 and long-term assets of $100,000. It's total liabilities equals $65,000. Stockholders equity is $235,000 $165,000 $170,000 $105,000

$105,000

If the equity in a business is $100,000 and the liabilities are $140,000, how much are the assets?

$140,000 + $100,000 = $240,000

The stockholders equity of Virinsky Company at the beginning and end of 2018 totaled $118,000 and $138,000, respectively. Assets at the beginning of 2018 were $154,000. If the liabilities of Virinsky Company increased by $64,000 in 2018, how much for a total assets at the end of 2018? Use the accounting equation. $218,000 $70,000 $228,000 $238,000

$238,000

A company reported monthly revenue is a $300,000 in monthly expenses of $110,000. What is the result of operations for the month?

$300,000 - $110,000 = $190,000

If the assets of a business or $350,000 and the liabilities are $180,000, how much is the equity?

$350,000 - $180,000 = $170,000

Electronic Instruments have retained earnings of $370,000 on December 31, 2017. Net income for 2018 totaled $210,000, and the dividends declared for 2018 or $75,000. How much retained earnings for Electronic record at December 31, 2018? $445,000 $370,000 $505,000 $580,000

$505,000

Harrison have no stock transactions in 2018, so the change in stockholders equity for 2018 was due to net income and dividends. If dividends were $50,000, how much was Harrison's net income for 2018? $520,000 $620,000 $470,000 $570,000

$570,000

Hoot Enterprises buys a warehouse for $590,000 to use for its East Coast distribution operations. On the date of purchase, a professional appraisal shows a value of $630,000 for the warehouse. The seller had originally purchased the building for $495,000. Hoot has a similar warehouse on the West Coast that has a book value of $604,000. Under the historical cost principal, Hoot record the building for $495,000 $590,000 $630,000 $604,000

$590,000

Lonestar corporation ended it's fiscal year on September 30, 2018, with cash of $72 million, accounts receivable of $29 million, property and equipment of $31 million, and other long-term assets of $15 million. The company's liabilities consist of accounts payable of $36 million and long-term notes payable of $20 million. Lonestar corporation has total stockholders equity of $91 million; Of this total, common stock is $27 million. Solve for the company's ending retained earnings.

$64 million

During the year, Ecowash corporation has $250,000 in revenues, $145,000 in expenses, and $2000 in dividends declarations and payments. Net income for the year was $97,000 $240,000 $95,000 $147,000

$95,000

All of the following are current assets except Prepaid expenses Inventory Accounts receivable Accounts payable

Accounts payable

Financial statements can be used by which of the following groups? Regulatory bodies Investors and creditors Individuals All of the above

All of the above

Which of the following factors should influence business and accounting decisions? Legal Ethical Economic All of the above

All of the above

On which financial statement with the ending balance of the account "accounts receivable" be found? Statement of retained earnings Balance sheet Statement of cash flows Income statement

Balance sheet

The amount a company expects to collect from customers appears on the Balance sheet in the stockholders' equity section Income statement in the expenses section Balance sheet in the current assets section Statement of cash flows

Balance sheet is the current assets section

It's the beginning balance of retained earnings is $160,000, revenue is $100,000, expenses total of $30,000, and the company to Claire's and pay a $250,000 dividend, what is the ending balance of retained earnings?

Beginning retained earnings $160,000 plus net income for the period $70,000 minus dividends declared ($25,000) = ending retained earnings $205,000

Net income appears on which financial statement(s)? Balance sheet Statement of retained earnings Income statement Both B and C

Both B and C

Assume that a business is headed for certain bankruptcy and it is evident that its liabilities greatly exceeded its assets. Which principle would be violated if its financial statements were prepared using U.S. GAAP? Continuity assumption Entity assumption Historical cost principal Stable-monetary-unit assumption

Continuity assumption

Necklace is a software engineer and starting a consulting practice. What form of business organization limited liability to the amount he has invested in the business? Corporation Partnership Proprietorship None of the above

Corporation

Which type of business organization provides the least amount of protection for bankers and other creditors of a company? Proprietorship Corporation Partnership Both A and C

Corporation

What item flows from the income statement the statement of retained earnings? Dividends Cash Inventory Net income

Net income

Which of the following is the most accurate statement regarding ethics has applied to decision making in accounting? Ethics involves making difficult choices under pressure and should be kept in mind making every decision, including those involved in accounting Ethics is becoming less and less important as a field study in business It is impossible to learn ethical decision making, since it is just some thing that you decide to do or not to do Ethics has no place in accounting, because accounting deals purely with numbers

Ethics involves making difficult choices under pressure and should be kept in mind making every decision, including those involving accounting

The costs of doing business are classified as Liabilities Assets Expenses Revenues

Expenses

Assets are usually reported at their Current market value Appraised value Historical cost None of the above

Historical cost

The financial statement that reports revenues and expenses is called the Statement of retained earnings Statement of cash flows Income statement Balance sheet

Income statement

Which financial statement would show how well a company performed over the past year? Income statement Statement of cash flows Statement of retained earnings Balance sheet

Income statement

How was the issuance of common stock for cash affect the accounting equation? Increase assets and increase stockholders' equity Increase assets and increase liabilities Increase liabilities and decrease stockholders' equity Decrease assets and decrease liabilities

Increase assets and increase stockholders' equity

During February, assets increased by $88,000 and liabilities increased by $30,000. Equity must have Decreased by $58,000 Increased by $118,000 Increased by $58,000 Increased by $118,000

Increased by $58,000

Revenues are Increases in retained earnings resulting from selling products or performing services Increases and paid-in capital resulting from the owners investing in the business Decreases in liabilities resulting from paying off loans All of the above

Increases in retained earnings resulting from selling products or performing services

Cash paid to purchase a building appears on the statement of cash flows among the Investing activities Financing activities Operating activities Stockholders' equity

Investing activities

You'll be useful, information must have which of the following fundamental qualitative characteristics? Relevance and faithful representation Expediency and relevance Faithful representation and diversity Timeliness and affordability

Relevance and faithful representation

What item flows from the statement of retained earnings to the balance sheet? Retained earnings Dividends Net income Cash

Retained earnings

Another name for the balance sheet is the Statement of profit and loss Statement of financial position Statement of operations Statement of earnings

Statement of financial position

And organizations investors and creditors will primarily use information provided by The organization's financial accounting system The Financial Accounting Standards Board The organization's managerial accounting system The Internal Revenue Service

The organization's financial accounting system

Which of the following is a true statement about International Financial Reporting Standards? They are more exact (contain more rules) than U.S. generally accepted accounting principles They are considered to be the single strongest set of accounting standards in the world They are converging gradually with U.S. standards They are not being applied anywhere in the world yet, but they soon will be

They are converging gradually with U.S. standards

Albany Corporation holds cash of $8000 and owes $23,000 on accounts payable. Albany has accounts receivable a $40,000, inventory of $20,000, and land that cost $40,000. How much are Albany's total assets and liabilities? Total assets $68,000 liabilities $63,000 Total assets $108,000 liabilities $43,000 Total assets $88,000 liabilities $43,000 Total assets $108,000 liabilities $23,000

Total assets $108,000 liabilities $23,000

The primary objective a financial reporting is to provide information On the cash flows of a company Useful for making investment and credit decisions About the profitability of an enterprise To the federal government

Useful for making investment and credit decisions