ACC Practice Quiz

What financial statement is the Dividends account associated with?

Statement of Retained Earnings

JS Company collected $9,200 in May of 2017 for 5 months of service which would take place from October of 2017 through February of 2018. The following accounts were affected as a result of the transaction in May

Unearned revenue

Which account is associated with the LIABILITIES financial statement element. A. Prepaid rent B. "Payable" accounts C. Cost of goods sold D. Inventory

"Payable" accounts

The Blumer Company entered into the following transactions during 2012: 1. The company was started with $22,000 of common stock issued to investors for cash. 2. On July 1, the company purchased land that cost $15,500 cash. 3. There were $700 of supplies purchased on account. 4. Sales on account amounted to $9,500. 5. Cash collections of receivables were $5,500. 6. On October 1, 2012, the company paid $3,600 in advance for a 12-month insurance policy that became effective on October 1. 7. Supplies on hand as of December 31, 2010 amounted to $225. The amount of cash inflow from operating activities would be:

$1,900

In 1998, Parker Corporation purchased land for $130,000. In 2010, Parker Company had the land appraised, and its value was estimated to be $190,000. Also during 2010, another company offered Parker $145,000 for the parcel of land. When the balance sheet is prepared at the end of 2010, at what dollar amount should the land be reported?

$130,000

Nez Company provided services for $7,500 cash during the 2012 accounting period. Nez incurred $6,000 expenses on account during 2012, and by the end of the year, $3,000 of that amount had been paid with cash. Nez paid dividends of $900 to stockholders during the year. Assume that these are the only accounting events that affected Nez during the 2012 accounting period. What is the cash flow from operation for 2012?

$4,500

The balance sheet for Raymond Company shows total assets of $4,000, liabilities of $1,500, and retained earnings of $1,200. Based on this information, the amount of common stock must be:

1,300

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 $275,000 from customers. What was Jackson's net cash provided by operating activities? A. $125,000 B. $65,000 C. $140,000 D. $119,000

125,000

Based on the following information, Cash $10,000 Inventory $31,000 Loan $26,000 Equipment $18,000 Revenue $103,000 Common Stock $143,000 Dividends $81,000 Expenses $46,000 Land $100,000 What are total assets?

159,000

Please, calculate Net income based on the information provided: Salary expense 21,200 Rent expense 5,400 Retained earnings 52,000 Cash 10,000 Advertisement expense 3,000 Service revenue 50,700

21,100

A company's retained earnings at the beginning and ending of the accounting period were $100,000 and $120,000, respectively. Common stock at the end of the year was $90,000. If the company had dividends of $3,000 and revenues of $280,000, the amount of expenses must have been? A. 257,000 B. None of the above C. 347,000 D. 377,000

257,000

Beginning and ending of the accounting period were $48,000 and $55,000. Common stock at the end of the year was $150000. If the company had revenues and expenses $50,000, the amount of cash dividends paid must have been:

4000

If total liabilities increased by $69,000 during a period of time and stockholders' equity decreased by $27,000 during the same period, then the amount and direction (increase or decrease) of the period's change in total assets is a(n)

42,000 increase

What is Stockholders Equity? Assets=75,000 Liabilities=25,000 A. None of the above B. 100,000 C. 50,000 D. Can not be determined

50,000

At the beginning of the year BobCat Inc. assets were $650,000, liabilities were $110,000, and common stock was $90,000. Net income for the year was 280,000. Dividends of $220,000 were paid during the year. What is the ending balance for retained earnings in 2012? A. $450,000 B. $150,000 C. $730,000 D. $510,000

510,000

What is Assets? Liabilities=20,000 Common Stock=15,000 Retained Earnings=23,500

58,500

What type of account is an accounts receivable account?

Asset

What type of accounts are prepaid accounts?

Asset

On September 15, 2017 BobCat InC. received $30,000 from its customer for the services to be performed starting January 1st, 2018. BobCat company records on Septermber 15th the following:

Assets 30K, unearned rev 30k, cash flow 30k OA

What is the accounting equation?

Assets = Liabilities + Stockholders' Equity

What is the most probable name of the statement below? Assets: Cash 10,000 Land 100,000 Truck 30,000 Total Assets 140,000 Liabilities: Loan 50,000 Equity Common Stock 85,000 Retained earnings 5,000 Total Liabilities and Shareholders' Equity 140,000 A. Income Statement B. Balance Sheet C. Statement of Cash Flow D. Statement of Changes in Shareholders Equity

Balance Sheet

Pick FALSE statement A. Revenues are reported on the income statement B. Dividends are not an expense C. Dividends are reported on the retained earnings statement D. Dividends are not directly reported on the balance sheet E. Dividends paid will decrease revenue accounts F. Dividends will decrease retained earnings

Dividends paid will decrease revenue accounts

In a study session, a classmate makes this statement "Dividends are listed as expenses on the income statement." What is your best response to this statement? A. I've been struggling with that concept and I feel that dividends should be shown on the balance sheet as assets. B. You are right. Revenues and expenses are shown on the income statement. Dividends are a cost of generating revenues and that makes them an expense. Why else would a corporation pay dividends? C. Dividends represent a portion of corporate profits that are paid to the shareholders. They belong on the retained earnings statement. D. Dividends are deducted from retained earnings on the balance sheet.

Dividends represent a portion of corporate profits that are paid to the shareholders. They belong on the retained earnings statement.

A corporation has which of the following set of characteristics? A. Shared control, tax advantages, increased skills and resources B. Simple to set up and maintains control with founder C. Easier to transfer ownership and raise funds, no personal liability D. Harder to raise funds and gives owner control

Easier to transfer ownership and raise funds, no personal liability

What type of account is the unearned revenue account? A. Equity B. Asset C. Revenue D. Liabilities

Liabilities

Which ACCOUNT is associated with the EQUITY financial statement element.

Retained earnings

Which of the following is the most appropriate and modern definition of accounting? A. The information system that identifies, records, and communicates the economic events of an organization to interested users. B. A means of collecting information. C. The interconnected network of subsystems necessary to operate a business. D. Electronic collection, organization, and communication of vast amounts of information.

The information system that identifies, records, and communicates the economic events of an organization to interested users.

The motivation for an investor to provide resources to a business is: A. To receive a legal right to receive a portion of profit at a specified date in the future... B. To receive the priority of claims in event of liquidation. C. To gain on share appreciation and/or potentially receive a portion of the Income of the company in the future D. To earned a promised income and be repaid at a given date.

To gain on share appreciation and/or potentially receive a portion of the Income of the company in the future

BobCat InC. paid $11,000 on October 1, 2017 for rent for a one year period beginning that date. As a result of this event:

Total assets remained unchanged

Which of the following is an asset? A. Service Revenue B. Notes Payable C. Supplies Expense D. Accounts Receivable

accounts receivable

if a company issues common stock for $40,000 and uses $30,000 of the cash to purchase a truck,

assets will be increased by $40,000

Which account is associated with the ASSET financial statement element. A. Salaries payable B. Retained earnings C. Notes payable D. Cash

cash

Liabilities are: A. claims of creditors B. the owner's interest in the company C. claims of investors D. both claims of creditors and owner's interest in the company

claims of creditors

A document that is evidence of ownership in a business (i.e. a claim to a business' assets) is called

common stock

which of the following external groups uses accounting information to determine whether the company can pay its obligations

creditors

On June 1 the FL Store paid $18,000 to Acme Realty for 6 months rent beginning July 1. The company did the correct recording on June 1. What accounts of FL Store were affected

decrease in Cash, $18,000; increase in Prepaid Rent, $18,000

Which financial statement element is the common stock account associated with?

equity

A business is usually involved in two types of activity—financing and investing.

false

A company has to provide ALL available accounting information in the summarized format to current or potential investors.

false

Investing activities involve collecting necessary funds from investors

false

Generally accepted accounting principles (GAAP) are measurement rules for

financial accounting

The company issues stock. This is what type of cash flow activity?

financing

Which of the following financial statements will be the most useful in evaluating company profitability? A. Income Statement B. Balance Sheet C. Statement of Cash Flow D. Statement of Changes in Shareholders Equity

income statement

STU Company received $32,000 of cash from investors (shareholders). Which of the following choices accurately reflects how this event would affect the company's financial statements?

increase of assets, equity and statements of cashflow

The company pays cash for a building. This is what type of cash flow activity?

investing

Which account is associated with the ASSET financial statement element. A. Expense B. Accounts payable C. Net income D. Land

land

The Unearned Service Revenue account is classified as a(n)

liability

a short-term creditor is primarily interested in the _______ of the borrower

liquidity

Long-term creditors are usually most interested in evaluating

liquidity and solvency

BobCat InC. paid $10,000 on October 1, 2017 for insurance coverage for a one year period beginning that date. How would this transaction affect financial statements as of October 1, 2017?

only change is cash flow (10k OA)

Joe Company paid $8,100 on April 1, 2012 for insurance coverage for a one year period beginning that date. What effect would this transaction have on the financial statements? Please select the letter corresponding to the line that best answers the question.

only change is in cash flow (8100 OA)

The company pays cash for insurance. This is what type of cash flow activity?

operating

An income statement A. summarizes the changes in retained earnings for a specific period of time. B. reports the changes in assets, liabilities, and stockholders' equity over a period of time. C. reports the assets, liabilities, and stockholders' equity at a specific date. D. presents the revenues and expenses for a specific period of time.

presents the revenues and expenses for a specific period of time.

Operating as a sole proprietorship. The business is growing, and now the owner wants to incorporate (set his/her company as a corporation). Which of the following is NOT a reason for this owner to incorporate?

the prestige of operating as a corporation

Bathlinks Corporation has a debt to assets ratio of 73%. This tells the user of Bathlinks's financial statements that

there is a risk that Bathlinks cannot pay its debts as they come due

All of the following are advantages of choosing sole proprietorship for your business form EXCEPT

transfer ownership is easily achieved through stock sales.

Prepaid Insurance is an asset?

true