Accounting Ch 1 Quiz

Income statement includes

"For month ended Oct 31", Revenues and total, expenses and total, and net income

If assets are $300,00 and liabilities are $192000, then equity equals

$108,000

On Aug 31 of the current year, the assets and liabilities of Gladstone, Inc. are as follows: Cash $30,000; Supplies $600; Equipment $10,000; Accounts Payable $8500. What is the amount of stockholders'equity as of Aug 31 of the current year?

$32,100

The income statement reports:

Revenues earned by a business; expenses incurred by a business; net income, which occurs when revenues exceed expenses

A balance sheet lists

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

The description of the relation between a company's assets, liabilities, and equity, which is expressed as Assets = Liabilities + Equity, is known as the:

accounting equation

Resources a company owns or controls that are expected to yield future benefits are:

assets

Saddleback Co paid off $30,000 of its account payable in cash. What would be the effects of this transaction on the accounting equation?

assets $30,000 decrease; liabilities $30,000 decrease

Outflows of cash and other resources to stockholders are

dividends

The difference between a company's assets and its liabilities, or net assets is

equity

Revenues are:

increases in equity from a company's sales of products and services

Operating Activities

involve using resources to research, develop, purchase, produce, distribute, and market products and services

An example of an investing activity is:

purchase of land

Increases in equity from a company's sales of products or services are

revenues

The financial statement that shows the changes in equity that resulted from net income (or net loss); and dividends to stockholders is the

statement of retained earnings

If a company receives $12,000 from a stockholder the effect on the accounting equation would be

assets increase $12,000 and equity increases $12,000

If a company paid $38,000 of its accounts payable in cash, what was the effect on the accounting equation?

assets would decrease $38,000; liabilities would decrease $38,000; and equity remains unchanged