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