Accounting 201

Whistler Company had retained earnings of $411,000 at the end of Year 1. During Year 2, Whistler had net income of $182,000. Retained earnings were $467,000 at December 31, Year 2. The amount of dividends for Year 2 must have been:

126000

Which of the following are possible effects on the accounting equation when recording a transaction that increases an asset by $100? (Select all that apply.)

Shareholders' equity increases by $100 An asset decreases by $100 A liability account increases by $100

shareholders' equity

decrease

The expensing of a long-term asset, such as Equipment, over its useful life is called ______

depreciation

the balance sheet reports the ____

describes the financial situation of a company at a specific point in time

A(n) ______ is a cost of doing business that is necessary to earn ______.

expense; revenue

Depreciating a long-term asset, such as Equipment, over its useful life records the ______. (Select all that apply.)

giving up some of the asset's usefulness, Accumulated Depreciation getting use of or service from an asset, Depreciation Expense giving up some of the asset's usefulness, Accumulated Depreciation

Sofa So Good, Inc., signs a contract with a programmer for the development of software that will be developed, delivered and paid for in the next year. Signing the contract ______.

has no effect on the accounting equation

The cost of a long-term asset, such as Equipment, is expensed ______.

over its useful life

An asset is an amount ______, while a liability is an amount ______.

owned; owned

Which financial statement reports how much cash was paid for its inventory?

statement of cash flows

cash paid for supplies

statement of cash flows

investing activities=

statement of cash flows

How many of the following line items are on the Income Statement? Supplies Expense Retained Earnings Notes Payable Depreciation Expense Stock Equipment

two

In its first year of business, Scents for Cents' earned Revenues of $20,000, incurred Expenses of $16,000 and paid a $2,000 Dividend to its shareholders. Given Scents for Cents' incomplete balance sheet at yearend, determine the missing Retained Earnings balance.

2,000

Florist Grump, Inc., had beginning retained earnings of $165,000. During the year, Florist Grump had net income of $68,000 and declared and paid dividends of $23,000. What will be shown for ending retained earnings on Florist Grump's year-end balance sheet?

210,000

Over Armour, Inc., sold 5 shirts that cost $6 each to its customer for $10 each. Over Armour should record a total of $______ as an expense for the cost of the goods sold.

30

The contra-asset account, ______, is used to record depreciation on equipment.

Accumulated Depreciation

A financial statement heading states that it was prepared: "For the Year Ended December 31". Which financial statements could this be? (Select all that apply

Income Statement Statement of Shareholders' Equity Statement of Cash Flows

In its first year of business, Scents for Cents' earned Revenues of $20,000, incurred Expenses of $16,000 and paid a $2,000 Dividend to its shareholders. Given Scents for Cents' incomplete balance sheet at yearend, determine the missing Supplies balance.

$3000

Cycle Path, Inc., sold 100 bikes to its customers at $400 each. The bikes cost $250. The entry to record this sale includes a ______. (Select all that apply.)

$40,000 Sales Revenue $(25,000) Inventory $(25,000) Cost of Goods Sold $40,000 Cash

Whistler Company had retained earnings of $411,000 at the end of Year 1. During Year 2, Whistler had net income of $182,000. Retained earnings were $467,000 at December 31, Year 2. The amount of dividends for Year 2 must have been:

126,000

At December 31, Year 1, Lord of the Fries, Inc.'s assets were $60,000 and liabilities were $40,000. At December 31, Year 2, its assets are $110,000 and liabilities are $50,000. During the year, it did not issue new stock and did not declare or pay dividends. Calculate net income for Year 2.

40,000

At December 31, Year 1, Sea the World Cruises, Inc.'s assets were $60,000 and liabilities were $40,000. At December 31, Year 2, its assets are $110,000 and liabilities are $50,000. During the year, it did not issue new stock, and it declared and paid $100 dividend. Calculate net income for Year 2.

40,100

Purses, Inc., sold 8 purse(s) that cost $40 each to its customers for a price of $90 each. The Gross Profit amount on the income statement will equal $______.

400

At December 31, Year 1, Lord of the Fries, Inc.'s assets were $50,000 and liabilities were $40,000. At December 31, Year 2, its assets are $110,000 and liabilities are $50,000. During the year, it did not issue new stock and did not declare or pay dividends. Calculate net income for Year 2.

50,000

At December 31, Year 1, Lord of the Fries, Inc.'s assets were $50,000 and liabilities were $40,000. At December 31, Year 2, its assets are $120,000 and liabilities are $50,000. During the year, it did not issue new stock and did not declare or pay dividends. Calculate net income for Year 2.

60,000

At December 31, Year 1, Lord of the Fries, Inc.'s assets were $60,000 and liabilities were $40,000. At December 31, Year 2, its assets are $130,000 and liabilities are $50,000. During the year, it did not issue new stock and did not declare or pay dividends. Calculate net income for Year 2.

60,000

At December 31, Year 1, Lord of the Fries, Inc.'s assets were $70,000 and liabilities were $40,000. At December 31, Year 2, its assets are $140,000 and liabilities are $50,000. During the year, it did not issue new stock and did not declare or pay dividends. Calculate net income for Year 2.

60,000

At December 31, Year 1, Sea the World Cruises, Inc.'s assets were $70,000 and liabilities were $40,000. At December 31, Year 2, its assets are $140,000 and liabilities are $50,000. During the year, it did not issue new stock, and it declared and paid $100 dividend. Calculate net income for Year 2.

60,100

Jim's Jungle Gyms reported the following information in its year ended December 31 financials What were the company's total Expenses for the current year?

63,000

At December 31, Year 1, Lord of the Fries, Inc.'s assets were $60,000 and liabilities were $40,000. At December 31, Year 2, its assets are $140,000 and liabilities are $50,000. During the year, it did not issue new stock and did not declare or pay dividends. Calculate net income for Year 2.

70,000

At December 31, Year 1, Sea the World Cruises, Inc.'s assets were $60,000 and liabilities were $40,000. At December 31, Year 2, its assets are $140,000 and liabilities are $50,000. During the year, it did not issue new stock, and it declared and paid $100 dividend. Calculate net income for Year 2.

70,100

Using the following information for Morris Lest Co. for the year ended December 31, Year 2 and assuming no new stock was issued during the year, Total Assets at December 1, Year 2 equals _______.

765

Lawn & Order borrowed cash from a bank by issuing a $10,000 promissory note. The effect on Lawn & Order's accounting equation is as follows:

Assets and liabilities increase

Businesses earn profits by

Having revenues greater than expenses. Selling goods or services at more than the cost having revenue greater than expenses issuing stock to owners for cash selling goods or services at more than they cost borrowing from creditors

Haira Noia, Inc., issued $10,000 of stock to its owners for cash. It recorded the transaction by increasing assets and increasing liabilities. Which of the following statements are correct? (Select all that apply.)

Liabilities will be too high. Shareholders' equity will be too low.

Retained Earnings appears on the ______

More than one of these statements

Select all of the statements that are true.

Net Losses decrease Retained Earnings. Net Income equals Revenues minus Expenses. Net Income increases Retained Earnings. When Revenues are less than Expenses, a Net Loss is reported.

On December 1, Burrows, Inc., borrowed money from a bank. The bank requires Burrows to pay the interest and the principal at the end of six months. As a result, the year-ended December 31 financial statements will report ______. (Select all that apply.)

Notes Payable on the Balance Sheet

Which of these events would not be recorded as transactions in an accounting system? (Select all that apply.)

Ordering supplies to be delivered and paid for in the future Hiring an employee

Which of the following will result in a decrease to assets and shareholders' equity? (Select all that apply.)

Payment of utilities incurred during the period Payment for interest incurred during the period Payment of wages incurred during the period

Which financial statement reports the activity in stock and retained earnings during the period?

Statement of Shareholders' Equity

Interest Expense on Notes Payable is recorded with an increase to Interest Expense, which decreases Shareholders' Equity, and ______. (Select all that are true.)

a decrease to Cash, an asset, if the interest is paid an increase to Interest Payable, a liability, if the interest is owed

financial information needed to manage a company is provided by a(n) _______ system.

accounting

Financial statements can be prepared ______. (Select all that apply.)

annually quarterly monthly

Match the financial statement that reports each of the following. asset=

balance sheet

Match the financial statement that reports each of the following. supplies=

balance sheet

Total assets appears on the ______.

balance sheet

Which one of the following financial statements reports the creditors' claims to the company's resources?

balance sheet

which of these would be reported as cash flows from investing activities?

cash paid to build a new corporate headquarters cash paid to buy equipment

which of the following would be included in the operating activity section of the Statement of Cash Flows.

cash paid to suppliers cash paid to employees cash paid from customers

Expenses appear on the ______.

income statement

Supplies Expense=

income statement

net income=

income statement

liabilities=

increase

The adjusting entry for the amount of interest owed on Notes Payable causes a(n) ________.

increase in total Liabilities and decrease in total Shareholders' Equity

Burrows, Inc. issued a note payable to the bank at the beginning of the month and owes interest on the note at the end of the month. (The interest is not going to be paid until later.) Show the effect of this transaction on total Assets, Liabilities and/or Shareholders' Equity and the account titles. If no effect, select "No Effect" assets=

no effect

Liabilities=

no effect

Dividends are ______. (Select all that apply.)

not an expense incurred to earn revenue company profits that are paid to shareholders

Profits earned by a company that have not been paid to shareholders are called ______ Earnings.

retained

An income statement includes which of the following items? (Select all that apply.)

revenues expenses net income

ways in which a business may be organized

sole proprietorship partnership corporation

Expenses are _____

the costs of doing business that are necessary to earn revenue

The heading of an income statement should include ______. (Select all that apply.)

the title "Income Statement" the accounting period covered by the statement the name of the business

How many of the following line items are on the Balance Sheet? Supplies Expense Retained Earnings Notes Payable Depreciation Expense Accumulated Depreciation Interest Expense

three

Miss Take, the company bookkeeper, recorded the $1,000 purchase of inventory by decreasing Cash and decreasing Shareholders' Equity. Show the effect on total Assets, Liabilities and/or Shareholders' Equity and the account titles. If no effect, select "No Effect". assets=

too low

Shareholders' Equity

too low