Accounting chp 1-2

If a company is considering the purchase of a parcel of land that was acquired by the seller for $85000, is offered for sale at $150000, is assessed for tax purposes at $95000,is considered by the purchaer as easily being worth $140,000, and is purchased for $137,000 the land should be recorded in the purchasers book at:

$137,000

Rushing had net income of $240 million and average total assets of $2000 million. Its return on assets is:

12%

if a company receives $12000 from a stockholder, the effect on the accounting equation would be:

Assets increase $12000 and equity increases $12000

Alpha Company has assets of $600,000, liabilities of $250,000, and equity of $350,000. It buys office equipment on credit for $75,000. What would be the effects of this transaction on the accounting equation?

Assets increase by $75,000 and liabilities increase by $75,000.

Accounting is an information and measurement system that does all of the following except: A) IDENTIFIES BUSINESS ACTIVITIES B)RECORDS BUSINESS ACTIVITIES C)COMMUNICATES BUSINESS ACTIVITIES D)ELIMINATES THE NEED FOR INTERPRETING FINANCIAL DATA E)HELPS PEOPLE MAKE BETTER DECISIONS

D

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

Equity

The financial statement that reports whether the business earned a profit and also lists the revenues and expenses is called the:

Income statement

net income:

Is the excess of revenues over expenses

The area of accounting aimed at serving the decision making needs of internal users is:

Managerial Accounting

If a company uses $1300 of its cash to purchase supplies, the effect on the accounting equation would be:

One asset increases $1300 and another asset decreases $1300, causing no effect.

The primary objective of financial accounting is to :

Provide accounting information that serves external users.

The basic financial statements include all of the following except:

Statement of Changes in Assets

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

A balance sheet lists:

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

Revenue is properly recognized:

When goods or services are provided to customers and at the amount expected to be received from the customer