Dave Barrett- Financial Accounting Exam 1

Which of the following is not one of the three forms of business organization?

Investors

Which of the following groups uses accounting information primarily to insure the entity is operating within prescribed rules.

Regulatory agencies

Issuing shares of stock in exchange for cash is an example of a(n):

financing activity.

For 2014 Kuhlman Corporation reported net income of $28,000; net sales $400,000; and average share outstanding 16,000. There were no preferred stock dividends. What was the 2014 earnings per share?

$1.75

Marvin Services Corporation had the following accounts and balances: Accounts payable: $18,000 Equipment: $21,000 Accounts receivable: 3,000 Land: 21,000 Buildings: ? Unearned service revenue: 6,000 Cash: 9,000 Total stockholders' equity: ? If the balance of the Buildings account was $51,000, what would be the total of liabilities and stockholders' equity?

$105,000

Use the following data to determine the total amount of working capital.

$240,000

McKinney Corporation had beginning retained earnings of $2,242,000 and ending retained earnings of $2,499,000. During the year they issued common stock totaling $141,000. No dividends were paid. What was their net income for the year?

$257,000

In 2014 Grider Corporation had cash receipts of $35,000 and cash disbursements of $20,000. Grider's ending cash balance at December 31, 2014 was $55,000. What was Grider's beginning cash balance?

$40,000

Elston Company compiled the following financial information as of December 31, 2014: Service revenue: $700,000 Common stock: 150,000 Equipment: 200,000 Operating expenses:625,000 Cash: 175,000 Dividends: 50,000 Supplies: 25,000 Accounts payable: 100,000 Accounts receivable: 75,000 Retained earnings, 1/1/14: 375,000 Elston's retained earnings on December 31, 2014 are:

$400,000.

Jackson Company recorded the following cash transactions for the year: Paid $135,000 for salaries. Paid $60,000 to purchase office equipment. Paid $15,000 for utilities. Paid $6,000 in dividends. Collected $245,000 from customers. What was Jackson's net cash provided by operating activities?

$95,000

Which of the following statements is true? - Amounts paid out as dividends are reported on the income statement. -Amounts received from issued stock are reported on the income statement. -Amounts received from issuing stock are revenues. -Amounts paid out as dividends are not expenses.

Amounts paid out as dividends are not expenses.

Which of the following is not a principal type of business activity?

Delivering

Which accounting assumption assumes that an enterprise will continue in operation long enough to carry out its existing objectives and commitments?

Going concern assumption

Which of the following is the best definition of an internal user of accounting information?

Managers who use accounting information to plan, organize, and run a business.

Free Cash Flow=

Net cash provided by operating expenses - capital expediters - cash dividends

The agency of the United States Government that oversees the U.S. financial markets is the

Security Exchange Commission

The liability created by a business when it purchases coffee beans and coffee cups on credit from suppliers is termed a(n):

account payable.

The periodicity assumption states that the economic life of a business can be divided into:

artificial time periods.

Working capital=

current assets - current liabilities

Current ratio=

current assets/current liabilities

Current assets divided by current liabilities is known as the:

current ratio

A current asset is:

expected to be converted to cash or used in the business within a relatively short period of time.

In order for accounting information to be relevant, it must

help predict future events or confirm prior expectations.

On a classified balance sheet, companies usually list current assets:

in the order in which they are expected to be converted into cash.

Relevant accounting information:

is information that is capable of making a difference in a business decision.

The information needed to determine whether a company is using accounting methods similar to those of its competitors would be found in the:

notes to the financial statements.

Dividends appear on

the retained earnings statement only.

The retained earnings statement shows all of the following except:

the time period following the one shown for the income statement.

debt to assets ratio=

total liabilities/total assets