ACC 211-Ch1

Beginning assets were $437,600, beginning liabilities were $262,560, common stock issued during the year totaled $45,000, revenue for the year was $414,250, expenses for the year were $280,000, dividends declared was $22,700, and ending liabilities is $$350,000. What is net income for the year? $700,160 $331,590 $134,250 $612,560 $175,040

$134,250 414,250 - 280,000 = 134,250

A parcel of land is: offered for sale at $150,000, assessed for tax purposes at $95,000, recognized by its purchasers as being worth $140,000, and purchased for $137,000. The land should be recorded in the purchaser's books at: $95,000 $137,000 $138,500 $140,000 $150,000

$137,000

Resources owned or controlled by a company that are expected to yield benefits are: Assets Revenues Liabilities Stockholder's equity Expenses

Assets

Resources owned or controlled by a company that are expected to yield benefits are: a. Assets b. Revenues c. Liabilities d. Stockholder's equity e. Expenses

Assets

Apatha Company has assets of $600,000, liabilities of $250,000, and equity of $350,000. It buys office equipment on credit for $75,000. The effects of this transaction include: Assets increase by $75,000 and expenses increase by $75,000. Assets increase by $75,000 and expenses decrease by $75,000. Liabilities increase by $75,000 and expenses decrease by $75,000. Assets decrease by $75,000 and expenses decrease by $75,000. Assets increase by $75,000 and liabilities increase by $75,000.

Assets increase by $75,000 and liabilities increase by $75,000.

Below is accounting information for Cascade Company for 2013, its first year of business. What was total equity at year end? Revenue: 416000 Cash: 120000 Common Stock: 200000 Expenses: 300000 Equipment: 240000 Accounts Receivable: 35000 Notes Payable: 50000 Notes Receivable: 62000

316000 416,000 - 300,000 = 116,000 + 200,000

The primary objective of financial accounting is to provide general-purpose financial statements to help external users analyze and interpret an organization's activities. True or False

True

How would the accounting equation of Boston Company be affected by the billing of a client for $10,000 of consulting work completed? +$10,000 accounts receivable, -$10,000 accounts payable. +$10,000 accounts receivable, +$10,000 accounts payable. +$10,000 accounts receivable, +$10,000 cash. +$10,000 accounts receivable, +$10,000 consulting revenue. +$10,000 accounts receivable, -$10,000 consulting revenue.

+$10,000 accounts receivable, +$10,000 consulting revenue.

Assets created by selling goods and services on credit are: Accounts payable Accounts receivable Liabilities Expenses Equity

Accounts receivable

Accounts payable appear on which of the following statements? Balance sheet. Income statement. Statement of retained earnings. Statement of cash flows. Transaction statement.

Balance sheet

The difference between a company's assets and its liabilities is: Net income Expense Equity Revenue Net loss

Equity

Decreases in retained earnings that represent costs of assets or services that are used to earn revenues are called: Liabilities Equity Withdrawals Expenses Contributed capital

Expenses

A net loss arises when revenues exceed expenses. True or False

False

Net income: Decreases equity. Represents the amount of assets owners put into a business. Equals assets minus liabilities. Is the excess of revenues over expenses. Represents the owners' claims against assets.

Is the excess of revenues over expenses

Which of the following elements are found on the balance sheet? Service revenue. Net income. Operating activities. Utilities expense. Retained earnings.

Retained earnings.

An asset is: a. Only acquired with cash. b. Something the company owns. c. Only contributed by stockholders. d. A company's obligation to pay. e. Is also called contributed capital.

b. Something the company owns.

If equity is $300,000 and liabilities are $192,000, then assets equal: $108,000 $192,000 $300,000 $492,000 $792,000

$492,000 Assets= Liabilities + Equity = 192000 + 300000 =492000

Which of the following elements are found on the income statement? Cash Accounts receivable Common stock Retained earnings Salaries expense

Salaries expense

Every business transaction should leave the accounting equation in balance. True or False

True

Expenses decrease retained earnings and are the costs incurred to earn revenues. True or False

True

Generally accepted accounting principles are the concepts and rules for preparing financial statements. True or False

True

Ownership of a corporation is divided into units called shares or stock. True or False

True

Revenues are increases in retained earnings from a company's earnings activities. True or False

True

he accounting equation can be restated as: Assets - Equity = Liabilities. True or False

True

A corporation purchased a $40,000 delivery truck by paying 4,000 cash and signing a $36,000 note payable. Immediately prior to this transaction the corporation had assets, liabilities, and owners' equity in the amounts of $75,000, $52,000, and $23,000 respectively. What is the total amount of the corporation's assets after this transaction has been recorded? $115,000 $111,000 $79,000 $71,000 $75,000

$111,000 75,000 (assets prior to transaction) + 40,000 (truck) - 4,000 (cash) = 111,000

Below is accounting information for Cascade Company for 2013: Revenue: 416000 Cash: 120000 Common Stock: 200000 Expenses: 300000 Equipment: 240000 Accounts receivable: 35000 Notes payable: 50000 Notes receivable: 62000 What net income for the year? $320,000 $296,000 $316,000 $457,000 $116,000

$116,000 416,000 - 300,000 = 116,000

Increases in retained earnings from a company's earnings activities are: Assets Revenues Liabilities Stockholder's equity Expenses

Revenues

The income statement is a financial statement that shows revenues earned and expenses incurred during a specified period of time. True or False

True

A company has twice as much owner's equity as it does liabilities. If total liabilities are $50,000, what amount of assets are owned by the company? $50,000 $100,000 $150,000 $200,000 Assets cannot be determined from the given information.

$150,000 Owners' equity = 2 (50,000) = 100,000 Assets = Liabilities 50,000 + Owners' equity 100,000

Determine the net income of a company for which the following information is available: Employee salaries expense: 180000 Interest expense: 10000 Rent expense: 20000 Consulting revenue: 400000 $190,000 $210,000 $230,000 $400,000 $610,000

$190,000 Expenses: $180,000 + $10,000 + $20,000 = $210,000 Net income = $400,000 - $210,000 = $190,000

FastForward has beginning equity of $257,000, net income of $51,000, dividends of $40,000, and investments by owners in exchange for stock of $6,000. Its ending equity is: $223,000 $240,000 $268,000 $274,000 $208,000

$274,000 $257,000 + $51,000 - $40,000 + $6,000 = $274,000

Below is accounting information for Cascade Company for 2013: Revenue: 416000 Cash: 120000 Common Stock: 200000 Expenses: 300000 Equipment: 240000 Accounts receivable: 35000 Notes payable: 50000 Notes receivable: 62000 What were the total assets ay year-end? $320,000 $296,000 $316,000 $457,000 $116,000

$457,000 120,000 + 35,000 + 62,000 + 240,000 = 457,000

Beginning assets were $437,600, beginning liabilities were $262,560, common stock issued during the year totaled $45,000, revenue for the year was $414,250, expenses for the year were $280,000, dividends declared was $22,700, and ending liabilities is $$350,000. What are the ending assets for the year? $700,160 $612,560 $787,600 $681,590 $1,159,410

$681,590 (437,600 - 262,560) + 45,000 + 414,250 - 280,000 - 22,700 = 331,590 (end. equity) + 350,000 = 681,590

If net income for the period was $134,250, dividends distributed were $76,530 and ending retained earnings was $862,520, what was the beginning retained earnings for the period? $1,073,300 $651,740 $804,800 $920,240 $728,270

$804,800 862,520 + 76,530 - 134,250 = 804,800

Identify the users and uses of accounting information.

1.external user like shareholders, lenders, suppliers, and many more. External users do not run an organization and have limited access to a company's information. External users use financial accounting, which provides them with general-purpose financial statements. 2. internal user like CEO, CFO, officers, internal auditors, and many more. Internal users are directly involved in running and operating an organization. There use of accounting information is to make sure that their companies are running efficiently and effectively. Internal users use managerial accounting, which is the area of accounting that serves the decision-making needs.

Which of the following is the correct sequence for the heading for ABC Company's 2013 balance sheet? ABC Company, For the year ended 12/31/13, Balance Sheet For the year ended 12/31/13, Balance Sheet, ABC Company Balance Sheet, 12/31/13, ABC Company 12/31/13, ABC Company, Balance Sheet ABC Company, Balance Sheet, 12/31/13

ABC Company, Balance Sheet, 12/31/13

The income statement reports all of the following except: Revenues earned by a business. Expenses incurred by a business. Assets owned by a business. Net income or loss earned by a business. The time period over which the earnings occurred.

Assets owned by a business.

Photometer Company paid off $30,000 of its accounts payable in cash. What would be the effects of this transaction on the accounting equation? Assets, $30,000 increase; liabilities, no effect; equity, $30,000 increase. Assets, $30,000 decrease; liabilities, $30,000 decrease; equity, no effect. Assets, $30,000 decrease; liabilities, $30,000 increase; equity, no effect. Assets, no effect; liabilities, $30,000 decrease; equity, $30,000 increase. Assets, $30,000 decrease; liabilities, no effect; equity $30,000 decrease.

Assets, $30,000 decrease; liabilities, $30,000 decrease; equity, no effect.

The distribution of assets to stockholders is called a(n): Liability Dividend Expense Contribution Investment

Dividend

Which of the following statements is true? Assets and revenues are the same thing. If employees have not yet been paid for their work, the company has wages payable. Retained earnings equal cash that the company has earned and kept. Revenue is another term for profit. Revenue minus expense equals retained earnings.

If employees have not yet been paid for their work, the company has wages payable

The financial statement that reports whether the business earned a profit and also lists the types and amounts of the revenues and expenses is called a(n): Balance sheet. Statement of retained earnings. Statement of cash flows. Income statement. Statement of financial position.

Income Statement

Fees earned (but not yet received in cash) by a business in exchange for services that it has provided appear on which of the following statements? Income statement. Statement of cash received. Statement of retained earnings. Statement of cash flows. Schedule of accounts receivable.

Income statement.

Rent expense that is paid with cash appears on which of the following statements? Balance sheet. Income statement. Statement of retained earnings. Schedule of accounts receivable. Statement of cash received.

Income statement.

Generally Accepted Accounting Principles: a.Focus on the review of a situation. b.Do not require financial statements. c.Never change. d.Intend to make information on the financial statements relevant, reliable, and comparable. e.Oversees Security and Exchange Commission.

Intend to make information on the financial statements relevant, reliable, and comparable

Net income: Decreases equity. Represents the amount of assets owners put into a business. Equals assets minus liabilities. Is the excess of revenues over expenses. Represents the owners' claims against assets.

Is the excess of revenues over expenses.

Creditors claims on the assets of a company are called: a.Net losses b.Expenses c.Revenues d.Equity e.Liabilities

Liabilities

Creditors' claims on the assets of a company are called: Net losses Expenses Revenues Equity Liabilities

Liabilities

Which of the following accounting principles dictates when expenses are recognized? Revenue recognition principle Monetary unit principle Business entity principle Matching principle Full disclosure principle

Matching principle

The statement of retained earnings: Reports how retained earnings changes at a point in time. Reports how retained earnings changes over a period of time. Reports on cash flows for operating, financing and investing activities over a period of time. Reports on cash flows for operating, financing and investing activities at a point in time. Reports on amounts for assets, liabilities and equity at a point in time.

Reports how retained earnings changes over a period of time.

The question of when revenue should be recognized on the income statement (according to GAAP) is addressed by the: a.Revenue recognition principle. b.Going-concern principle. c.Objectivity principle. d.Business entity principle. e.Cost principle.

Revenue recognition principle

On December 15, 2013, Myers Legal Services signed a $50,000 contract with a client to provide legal services to the client in 2014. Which accounting principle would require Myers Legal Services to record the legal fees revenue in 2014 and not 2013? Monetary unit principle. Going-concern principle. Cost principle. Business entity principle. Revenue recognition principle

Revenue recognition principle.

The financial statement that describes where a company's cash came from and how it was spent during the period is the: Statement of financial position. Statement of cash flows. Balance sheet. Income statement. Statement of retained earnings.

Statement of cash flows

The financial statement that shows beginning and ending retained earnings balances and the effects of net income (loss) and a dividend for the period is the: Statement of financial position. Statement of cash flows. Balance sheet. Income statement. Statement of retained earnings.

Statement of retained earnings.

Identify and describe the four basic financial statements

The four basic financial statements are income statement, statement of retained earnings, balance sheet, and statement of cash flows. The income statement includes a company's revenues and expenses, which is the resulting net income or loss over a period of time. The statement of retained earnings is an explanation of swifts in equity from the net income and from any dividends through the period of time recorded. The balance sheet is a complete record of the company's financial position in assets, liabilities, and equity in a certain given period. The statement of cash flows is a statement of receipts and payments over a period of time.

A balance sheet lists: The types and amounts of the revenues and expenses of a business. Only the information about what happened to retained earnings during a time period. The types and amounts of assets, liabilities and equity of a business as of a specific date. The cash inflows and outflows during the period. The assets and liabilities of a company, but not the equity.

The types and amounts of assets, liabilities and equity of a business as of a specific date

Which accounting assumption assumes that all accounting information can be reported monthly or yearly? Business entity assumption Monetary unit assumption Value assumption Cost assumption Time period assumption

Time period assumption

The primary objective of financial accounting is:To serve the decision-making needs of internal users. To provide financial statements to help external users analyze and interpret an organization's activities. To monitor and control company activities. To provide information on both the costs and benefits of managing products and services. To know what, when and how much to produce.

To provide financial statements to help external users analyze and interpret an organization's activities.