accounting 2036 unit 1

A company's fiscal year end is a ______.

12-month period ending on a day other than December 31.

Which of the following are assets?

Land Cash Supplies Equipment

Place the following in order (top down) of how they would appear in the heading of Deli Llama's annual income statement for the fiscal year ended March 31, 2020.

1. Deli Llama, Inc. 2. Income statement 3. For the year ended March 31, 2020

Companies typically prepare ______ financial statements each accounting period.

4

Which of the following are true about the income statement?

Net Income has a double underline. A dollar sign appears only at the top and bottom of the column of numbers. Revenues are listed before expenses. Each major caption has an underlined subtotal, such as Total Expenses.

An amount owed to a supplier for prior purchases on account is an Account ______ which is a(n) ______ account.

Payable; liability

Mauricio, the owner of Pizza Aroma, Inc., arranged for the business to borrow $25,000 from River Bank. Which entity should show the liability on its balance sheet?

Pizza Aroma

A single-step income statement includes which of the following?

Revenues Expenses Net Income

The order in which assets are reported on the balance sheet is based on when the asset is ______.

expected to be used or turned into cash

A financial statement heading states that it was prepared: "For the Year Ended December 31, 2020." What types of financial statements could this be? (Select all that apply.)

income statement statement of cash flows statement of retained earnings

Liabilities are ______.

measurable amounts that the company owes to creditors

Financial statements can be prepared ______.

on a monthly basis on a fiscal year basis on a quarterly basis

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

owned; owed

Three common forms of business organizations include ______.

partnership corporation sole proprietorship

Sole proprietorship, corporation ___________ , __________ are the three primary forms of business organization.

partnerships corporations

Businesses earn profits by ______.

providing service or selling goods at more than the cost to provide the service or deliver the goods having revenues greater than expenses

A corporation earns profits for its stockholders by ______.

providing services at more than cost selling goods at more than their cost

Which of the following statements are true regarding the income statement? Income statements ______.

report revenues minus expenses are sometimes called the statement of operations

The unit-of-measure assumption states that ______.

results of business activities should be reported in an appropriate monetary unit

Financial information is enhanced when it is ______.

verifiable timely comparable understandable

A company started the month with $1,000 of Retained Earnings. During the month, it had Revenue of $5,000 and Expenses of $4,500. It also distributed a Dividend of $100 to its stockholders. The company's Retained Earnings at the end of the period equals $__________.

$1,400

At December 31, Aloe, Inc.'s assets equal $8,000 and stockholders' equity equals $5,000. Liabilities must equal $_____.

$3000

______ are used to accumulate and report the effects of each different business activity separately rather than combining the various types of activities together.

Accounts

Which of the following are found on a balance sheet?

Equipment Common Stock Supplies Notes Payable

Liberty, Inc., a US company, sold merchandise to Belle, a French company, for 10,000 euros. In Liberty's US financial statements, this sale should be reported in ______.

US dollars

True or false: The order of the heading of an income statement indicates the name of the statement first, the period of time covered, and the name of the company third.

False because the name of the company is first, followed by the statement name, and then the period of time covered by the income statement.

True or false: Net income equals the net amount of cash collected during the accounting period.

False; Net income does not equal cash collected because some revenues are collected and some expenses are paid in a later accounting period. Cash can increase from other activities, such as borrowing or owner contributions.

Acme Enterprises, a consulting firm, bought 4 boxes of copy paper from an office supply store for $15 each. The copy paper would be reported as ______.

an asset, Supplies

The balance sheet balances when ______.

assets equal liabilities plus stockholders' equity

The statement of cash flows shows ______.

cash flows from investing activities cash flows from operating activities cash flows from financing activities