accounting: exam 1

Wheaton Company performed services for a customer on account. Indicate whether each of the following statements about this transaction is true or false - Assets and stockholders' equity both increase when the revenue is recognized. - This transaction did not affect cash flows. - The Company recorded an increase in revenue and a decrease in accounts receivable. - Recognition of revenue would be delayed until cash was collected. - This transaction is an example of an asset exchange transaction.

- true: assets and stockholders equity both increase -true -false: both increase -false: revenue is recognized when services are performed -false: asset source transaction

the following variable manufacture costs applied: total= 10 determine the total variable manufacturing cost is produces 3,000 units

10 * 3,000= $30,000

on march 1st, company paid 1200 cash for insurance policy provided for 1 year term. the amount of insurance expense appearing on the year 1 income sheet would be:

1000 1200/ 12= 100 100 * 10 (months)= 1000

Bledsoe Company acquired $17,000 cash by issuing common stock on January 1, Year 1. During Year 1, Bledsoe earned $8,700 of revenue on account. The company collected $6,400 cash from customers in partial settlement of its accounts receivable and paid $5,600 cash for operating expenses. Based on this information alone, what was the impact on total assets during Year 1?

17,000+8700-5600 = 20,100 increase

Acquired an additional $1,050 cash from the issue of common stock. Repaid $1,685 of its debt to the bank. Earned revenues, $5,050. Incurred expenses of $2,970. Paid dividends of $1,300. - what was the net cash flow form financing activities reported on statement of cashflows?

1980 outflow

borrowing cash from the bank is an example of what -claims exchange -assset source -asset use -asset exchange

asset source: both assets and liability increases

issued common stock for 200,000 cash, what happened as a result of this event

assets, liabilities, and stockholders equity all increased

what wold happen to financial statements if paying to lease an office for one year

assets: decrease in cash and increase in prepaid rent statement of cashflow: decrease in cash and operating activity

Company earned $15,000 of cash revenue. Which of the following accurately reflects how this event affects the company's horizontal financial statements model?

assets: increase in cash stockholders: increase in retained earnings income: increase in revenue and net income cashflow: increase and OA

Company borrowed $32,000 of cash from a local bank. Which of the following accurately reflects how this event affects the company's horizontal financial statements model?

assets: increase in cash liabilities: increase cashflow: increase FA

what financial statements are affected by collecting cash from an accounts receivable

balance sheet and statement of cashflows

On January 1, Year 2, the Supplies account of Sheldon Company had a balance of $1,200. During the year, the company purchased $3,400 of supplies on account and made partial payments totaling $3,000 on those accounts. On December 31, Year 2, Sheldon determined that there were $1,400 of supplies on hand. Which of the following would be reported on Sheldon's Year 2 financial statements?

beginning balance + addition purchase - leftover = 1200 + 3,400 - 1400= 3,200 ' -1,400 of supples and 3,200 of supplies expense

Retained earnings at the beginning and ending of the accounting period were $1,100 and $2,300, respectively. Revenues of $4,300 and dividends paid to stockholders of $1,000 were reported during the period. What was the amount of expenses reported for the period?

beginning retained earnings + revenue - expenses- dividends= ending retained earnings = 1,100 + 4,300 - expenses - 1,000= 2,300 = 2,100

the manager of kenton company stated that 45% of its total costs were fixed. the manager was describing the companies:

cost structure

Duluth Company collected a $6,000 cash advance from a customer on November 1, Year 1 for services to be provided over a six-month period beginning on that date. If the year-end adjustment is properly recorded, what will be the effect of the adjusting entry on Duluth's Year 1 financial statements?

decrease in liabilities and increase in revenue

As of December 31, Year 2, Bristol Company had $100,000 of assets, $40,000 of liabilities and $25,000 of retained earnings. What percentage of Bristol's assets were obtained through investors?

35% 40,000+25,000+65,000 - means 35,000 has to be common stock 35,000 out of 100,000 is 35%

On January 1, Year 1, Melon Moving Company paid $60,000 to purchase a truck. The truck was expected to have a five-year useful life and a $5,000 salvage value. If Melon uses the straight-line method, the amount of book value shown on the Year 4 balance sheet is

60,000- 5,000= 55,000 55,000/5= 11,000 11,000 * 4= 44,000 60,000-44,000= 16,000 at year 4

During Year 2, Millstone Company provided $6,500 of services for cash, paid cash dividends of $1,000 to owners, and paid $4,000 cash for expenses. Liabilities were unchanged. Which of the following statements accurately describes the effect of these events on the elements of the company's financial statements?

6500-4000-1000 = assets increased b 1500

On August 1, Year 1, Carson Company collected $84,000 for services to be provided for one year beginning immediately. The company's fiscal year ends on December 31. Based on this information, the amount of service revenue and the cash flow from operating activities shown on the Year 1 financial statements would be

84,000/ 12= 7,000 7,000 * 5= 35,000 - service revenue = 35,000 and cash flow = 84,000

Acquired $7,600 cash by issuing common stock. Provided $3,900 of services on account. Paid $2,000 cash for operating expenses. Collected $2,700 of cash from customers in partial settlement of its accounts receivable. Paid a $180 cash dividend to stockholders. -What is the amount of total assets that will be reported on the balance sheet as of December 31, Year 1?

=7,600+3,900-2,00-180= 9,320 - don't include partial settlement payments

which is the definition of an asset

a resource that will be used to produce revenue

On January 1, Year 2, the Supplies account of Sheldon Company had a balance of $1,200. During the year, the company purchased $3,400 of supplies on account and made partial payments totaling $3,000 on those accounts. On December 31, Year 2, Sheldon determined that there were $1,400 of supplies on hand. Which of the following would be reported on Sheldon's Year 2 financial statements?

decrease in liabilities and increase in revenue

which of the following costs typically include both fixed and variable costs - direct materials -direct labor -factory overhead -none

factory overhead

t/f: variable costs will become fixed outside the relevant range

false

t/f: the collection of an accounts receivable is a claim exchange transaction

false: asset exchange

t/f: accrual accounting usually fails to match expenses with revenue

false: matching concept

calculating the debt-to-assets ratio measures how efficiently a company is using its assets in the normal scope of a business

false: measures level of debt risk in a business

which type of accounting is indeed to satisfy the needs of external users of accounting information

financial accounting

which of the following financial statements is impacted most significantly by the matching concepts -balance sheet -income statements -statement of cashflows

income statement

Delta Company experienced an accounting event that affected its accounting equation as indicated below: assets (-) = liabilities (NA) + common stock (NA) + retained earnings (-) -purchased land -earned cash revenue - borrowed money from the bank -incurred a cash expense

incurred a cash expense

what is the return on asset ratio?

net income/ total assets

do dividends show up on the income statement

no, it is not an expense

1) Acquired $1,150 cash from the issue of common stock. 2) Borrowed $620 from a bank. 3) Earned $850 of revenues. 4) Paid expenses of $290. 5) Paid a $90 dividend. What is the net cash inflow from operating activities that will be reported on Packard's statement of cash flows for Year 1?

operating activities= -850 of revenue -expenses of 290 =560

which term describes assets earned from operations that have been reinvested into the business -liability -retained earnings -common stock -dividends

retained earnings

Acquired $3,100 cash from issuing common stock. Borrowed $2,250 from a bank. Earned $3,150 of revenues. Incurred $2,410 in expenses. Paid dividends of $410 - What was the amount of retained earnings that will be reported on Lexington's balance sheet at the end of Year 1?

revenue- expenses - dividends = 3150-2410-410= 330

sales revenue= 2,500,000 fixed costs= 500,000 variable cost= 300,000 what is the company's contribution margin?

sales revenue - variable cost 2,200,000

chow company earned 2300 of cash revenue, paid 1400 for cash expenses, and paid 400 cash dividends to its owners. which of the following is true? - a net cash inflow from operating activities was 900 -a net cash inflow from operating activities was 500 -a net cash outflow for investing activities was 400 -the net cash outflow for investing activities was 900

the net cash inflow from operating activities was 900

t/f : the types of resources needed by business are financial physical, and labor resources

true

t/f: an asset source transaction increases a business's assets and claims to its assets

true

t/f: an increase in revenue may be accompanied by a decrease in a liability

true

t/f: the contribution margin format income statement classifies costs according to their behavior patterns

true: either fixed or variable