MGMT 200 EXAM 1 REVIEW

Using the information below from the accounting records of Thomas Corporation, stockholders' claims to the company's resources amount to: Assets $1,200,000Liabilities $800,000Net income $100,000Retained earnings $250,000

400,000

A company's own cash records show a balance of $3,200. After examining the bank statement, the following information is revealed: Bank's balance for cash$4,000 Deposits outstanding$2,300 NSF check$600 Checks outstanding$1,800 Note collected by the bank$2,000 Service fee charged by the bank$100 After reconciliation, the correct balance of cash is:

4500

At the end of the previous year, a company's balance sheet reports cash of $30,000. For the current year, the company's statement of cash flows reports operating cash inflows of $90,000; investing outflows of $110,000; and financing inflows of $40,000. What amount of cash will be reported in the current year's balance sheet?

50,000

Emmitt had the following final balances after the first year of operations: assets, $55,000; stockholders' equity, $25,000; dividends, $3,000; and net income, $10,000. What is the amount of Emmitt's liabilities?

55,000-25,000= 30,000

Use the following appropriate amounts to calculate net income: Revenues, $12,000; Liabilities, $5,000; Expenses, $4,000; Assets, $19,000; Dividends, $4,000.

8000

A debit is used to decrease which of the following accounts?

Accounts payable

Recording salaries owed to employees that will not be paid by the company until the following accounting period is an example of a(n):

Accrued expense.

Financial statements are prepared from which of the following trial balances?

Adjusted trial balance.

Which of the following is considered cash for financial reporting purposes?

Amounts held in checking accounts.

Financing cash flows include which of the following?

Cash received from the issuance of common stock.

Which of the following describes the information reported in the statement of stockholders' equity?

Change in stockholders' equity through changes in common stock and retained earnings.

On November 1, 2021, a company receives cash of $6,000 from a customer for services to be provided evenly over the next six months. Deferred revenue is recorded at that time. Which of the following adjusting entries is needed on December 31, 2021?

Debit Deferred Revenue for $2,000; Credit Service Revenue for $2,000.

The adjusting entry to record supplies used during the period includes a:

Debit to Supplies Expense

13) Assets normally carry a ________ balance and are shown in the ______

Debit; Balance sheet

Liabilities are best defined as:

Debts or obligations the company owes resulting from past transactions.

On December 10, a company pays $500 for advertising to appear on December 20. On which date should the expense be recorded under accrual-basis accounting?

December 20.

Section 404 of the Sarbanes-Oxley Act requires companies to:

Document and assess internal controls.

The balance of retained earnings in the adjusted trial balance:

Equals the balance of retained earnings at the beginning of the accounting period.

The revenue recognition principle states that companies typically record revenue:

In the period in which we provide goods and services to customers.

Under cash-basis accounting, companies typically record revenue:

In the period in which we received cash from customers for goods and services.

Which of the following adjusts the company's balance of cash in a bank reconciliation?

Interest on bank deposit.

Closing entries are:

Made to transfer the balances of temporary accounts to retained earnings.

On May 5, Johnson Plumbing receives a phone call from a customer needing a new water heater and schedules a service visit for May 7. On May 7, Johnson installs the new water heater. The customer pays for services on May 10. According to the revenue recognition principle, on which date should Johnson record service revenue?

May 7 (date of service).

Which of the following describes the information reported in the statement of cash flows?

Net cash flows from operating, investing, and financing activities.

Operating cash flows would include which of the following?

Payment for prepaid insurance.

Which of the following is an example of an accrued revenue?

Providing services to a customer without having yet collected the cash.

net income formula

Revenue - Expenses

Generally Accepted Accounting Principles (GAAP) are best defined as:

Standards for presenting financial accounting information.

When preparing a bank reconciliation, outstanding checks would be:

Subtracted from the bank's cash balance.

Which of the following best explains the meaning of total stockholders' equity?

The amount of capital invested by stockholders plus profits retained over the life of the company.

At any given time, the amount of cash in the petty cash fund should equal:

The established balance of the fund less all vouchers written during the accounting period.

In a classified balance sheet, liabilities are separated into two categories based on

The length of time until the obligation is expected to be satisfied—less than one year versus more than one year.

Employee purchases of supplies with a company-issued credit card is typically recorded with a credit to

accounts payable

Providing services to customers on account for $100 is recorded as

accounts receivable- 100 service revenue- 100

A trial balance can best be explained as a list of

all accounts and their balances at a particular date

To ensure that management has in fact appropriately applied GAAP, the SEC requires independent outside verification of the financial statements of public traded companies by an:

auditor

Which of the following items would not appear in an income statement?

cash

Which of the following is not a major section in the statement of cash flows?

cash flows from customers

Providing services to customers for cash would be recorded with a:

credit to service revenue

The purchase of supplies with cash would be recorded as

debit supplies, credit cash

A credit to cash will

decrease assets

Which of the following is the correct order for preparing the financial statements listed?

income statement, statement of stockholders' equity, and balance sheet.

in the language of accounting, the term "debit" always means

left hand side

Purchasing land with cash would have what effect on the accounting equation?

no effect.

Which of the following transactions decreases stockholders' equity?

pay salaries for the current period.

The process of transferring debit and credit information from the general journal to the general ledger is known as:

posting

Which of the following transactions increases total assets?

provide services to customers on account.

Investing cash flows in the statement of cash flows would include which of the following?

purchase of land

Which of the following accounts is listed in a post-closing trial balance?

salaries payable

Which of the following accounts normally has a credit balance?

service revenue

Purchasing office supplies on account for $100 is recorded as:

supplies- 100 accounts payable- 100

Which of the following is true about a trial balance?

total debit amounts should always equal total credit amounts