Accounting 211 Ch. 1

GAAP stands for

Generally Accepted Accounting Principles

At October 1, Arcade Fire Enterprises reported stockholders' equity of $70,000. During October, no stock was issued and the company earned net income of $18,000. If stockholders' equity at October 31 totals $78,000, what amount of dividends were paid during the month?

$10,000

The accounting equation for Quattro Enterprises is as follows: Assets Liabilities Stockholders' Equity $120,000 = $60,000 + $60,000 If Quattro purchases office equipment on account for $25,000, the accounting equation will change to

$145,000 = $85,000 + $60,000

Centro-matic Company began the year with stockholders' equity of $30,000. During the year, Centro-matic issued additional shares of stock in exchange for cash of $42,000, recorded expenses of $120,000, and paid dividends of $8,000. If Centro-matic's ending stockholders' equity was $112,000, what was the company's revenue for the year?

$168,000

Mofro's Computer Repair Shop started the year with total assets of $300,000 and total liabilities of $200,000. During the year, the business recorded $500,000 in computer repair revenues, $300,000 in expenses, and Mofro paid dividends of $50,000. Stockholders' equity at the end of the year was

$250,000

Barsuk Company began the year with stockholders' equity of $108,000. During the year, Barsuk issued stock for $147,000, recorded expenses of $420,000, and paid dividends of $28,000. If Barsuk's ending stockholders' equity was $290,000, what was the company's revenue for the year?

$483,000

If total liabilities increased by $30,000 and stockholders' equity increased by $20,000 during a period of time, then total assets must change by what amount and direction during that same period?

$50,000 increase

Stahl Consulting started the year with total assets of $60,000 and total liabilities of $15,000. During the year, the business recorded $48,000 in catering revenues and $30,000 in expenses. Stahl issued stock of $9,000 and paid dividends of $15,000 during the year. The stockholders' equity at the end of the year was

$57,000

At October 1, Arcade Fire Enterprises reported stockholders' equity of $70,000. During October, common stock of $10,000 was issued and the company posted a net loss of $4,000. If stockholders' equity at October 31 totals $70,000, what amount of dividends were paid during the month?

$6,000

On January 1, 2015, Cat Power Company reported stockholders' equity of $705,000. During the year, the company paid dividends of $30,000. At December 31, 2015, the amount of stockholders' equity was $825,000. What amount of net income or net loss would the company report for 2015?

Net income of $150,000

Which of the following would not be considered an internal user of accounting data for the GHI company?

President of the employees' labor union.

Which of the following events cannot be quantified into dollars and cents and recorded as an accounting transaction?

The appointment of a new CPA firm to perform an audit

Which of the following is not an advantage of the corporate form of business organization?

Unlimited personal liability for stockholders

A dividend is

a distribution of the company's earnings to its stockholders

Sources of increases to stockholder's equity are

additional investments by owners

Liabilities -

are existing debts and obligations.

Liabilities of a company would not include

cash

In order to increase comparability, in recent years, the FASB and IASB have made efforts to reduce the differences between U.S.GAAP and IFRS through a process known as

convergence

The historical cost principle requires that when assets are acquired, they be recorded at -

cost

The common characteristic possessed by all assets is

future economic benefit

Martin Corporation purchased land in 2007 for $290,000. In 2015, it purchased a nearly identical parcel of land for $460,000. In its 2015 balance sheet, Martin valued these two parcels of land at a combined value of $920,000. By reporting the land in this manner, Martin Corporation has violated the -

historical cost principle

The partnership form of business organization

is a common form of organization for service-type businesses

A business organized as a corporation

is owned by its stockholders

Revenues would not result from

issuance of common stock

Financial accounting provides economic and financial information for all the following except?

managers

If the retained earnings account increases from the beginning of the year to the end of the year, then

net income is greater than dividends

Stockholders' equity can be described as

ownership claim on total assets.

If a corporation distributes cash to its stockholders, then

stockholders' equity will decrease

The SEC and FASB are two organizations that are primarily responsible for establishing-

the SEC often mandates guidelines when no accounting principles exist

Andre Dickinson, owner of Andre's Fine Wines, also owns a personal residence that costs $475,000. The market value of his residence is $625,000. During preparation of the financial statements for Andre's Fine Wines, the accounting concept most relevant to the presentation of Andre's home is-

the economic entity assumption

The cost of an asset and its fair value are

the same on the date of acquisition