Chap 01 videos

Knowledge Check 01 Identify which items belong on the statement of retained earnings. Accounts receivable, net income, and dividends Revenue, expenses and net income Cash, accounts receivable, and common stock Dividends, beginning retained earnings, ending retained earnings

Dividends, beginning retained earnings, ending retained earnings The statement of retained earnings consists of the beginning retained earnings balance, plus net income, minus dividends to equal the ending retained earnings balance.

Knowledge Check 01 Analyze the following transaction and select the best answer.The business pays $2,000 in cash to the landlord for office space rent. Expenses reduce by $2,000 Equity remains unchanged Equity reduces by $2,000 Assets increase by $2,000 Liabilities reduce by $2,000

Equity reduces by $2,000 The accounting equation must remain in balance. Paying rent increases expenses which reduces equity. Cash, an asset, is reduced.

Identify which items belong on the statement of cash flows. Accounts receivable, net income, and dividends Cash flows from investing, operating and financing activities Cash, accounts receivable, and common stock Dividends, beginning retained earnings, ending retained earnings

Cash flows from investing, operating and financing activities The statement of cash flows consists of cash flows from operating, cash flows from investing, and cash flows from financing activities.

Knowledge Check 01 Identify which items belong on the balance sheet. Accounts receivable, net income, and dividends Revenue, expenses and net income Cash, accounts receivable, and common stock Dividends, beginning retained earnings, ending retained earnings

Cash, accounts receivable, and common stock The balance sheet consists of assets (cash, accounts receivable), liabilities (accounts payable) and equity (ending retained earnings balance plus common stock).

Knowledge Check 01 The four basic financial statements are: Income Statement, Sheet of retained earnings, Balance statement, and Statement of cash flows. Income Statement, Statement of earnings, Balance statement, and Statement of cash flows. Income sheet, Statement of retained earnings, Balance sheet, and Statement of cash flows. Income Statement, Statement of retained earnings, Balance sheet, and Statement of cash flows.

Income Statement, Statement of retained earnings, Balance sheet, and Statement of cash flows.

Knowledge Check 01 Identify which items belong on the income statement. Accounts receivable, net income, and dividends Revenue, expenses and net income Cash, accounts receivable, and common stock Dividends, beginning retained earnings, ending retained earnings

Revenue, expenses and net income The income statement consists of the revenues minus expenses which equals net income.

Knowledge Check 01 On January 31, Jean Consulting Company receives a bill for that month's utilities in the amount of $500. Jean sets it aside because she does not plan to pay the bill until its due date of February 15. What effect, if any, does this event have on the company's accounting equation as of January 31? The business must record this event, which would decrease cash and decrease equity on January 31. The business must record this event, which would decrease cash and increase equity on January 31. The business must record this event, which would increase liabilities and decrease equity on January 31. Because the bill is set aside for payment in February, there would be no effect on the accounting equation as of January 31.

The business must record this event, which would increase liabilities and decrease equity on January 31.