Accounting exam 1

Which of the following expenses does not affect the reporting of operating income? Income tax expense Cost of goods sold Depreciation expense Rent expense

Income tax expense

Which of the following best describes the balance sheet? It includes a listing of assets at their market value It includes a listing of assets, liabilities, and stockholders equity at their market value It provides information pertaining to a company's economic resources and the source of financing for those resources It provides information pertaining to a company's liabilities for a period of time

It's provides information pertaining to a company's economic resources and the sources of financing for those resources

Which of the following is considered to be an expense on the income statement? Accounts payable Notes payable Wages payable Cost of goods sold

Cost of goods sold

Which of the following describes the impact on a balance sheet a paying a current liability using cash? Current assets will decrease Current liabilities will increase Stockholders equity will decrease Total assets will remain the same

Current assets will decrease

A companies retained earnings increased $379,000 last year and it's assets increased $977,000. The company declared a $66,000 cash dividend during the year. What was last year's net income? $313,000 $379,000 $445,000 $532,000

$445,000

On January 1, 2019 the general ledger of corporal corporation included supplies of $2200. During 2019, supplies purchased amount to $7700. A physical count of inventory on hand at December 31, 2019 determined that the amount of supplies on hand was $2400. How much is the supplies expense for the year 2019? $9,900 $7,900 $2,200 $7,500

$7,500

Companies January 1, 2019 balance sheet reported total assets of $114,000 and total liabilities of $45,000. During January 2019 the following transactions occurred: (A) The company issued stock and collected cash totaling $24,000; (B) The company paid an account payable of $5400; (C) The company purchased supplies for $2600 with cash; (D) The company purchased land for $44,000, paying $15,000 with cash and signing a note payable for the balance. What is the total stockholders equity after the transactions above? $93,000 $24,000 $69,000 $192,600

$93,000

During the current fiscal year a company had revenue of 440,000 cost of goods sold of 295,000 and an income tax rate of 34% on income before income taxes. What was the company's current year net income? $149,600 $49,300 $95,700 $440,000

$95,700

A company issued 42,000 shares of it's one dollar par value come in stock for $25 per share. The journal entry to record the stock issue would include which of the following? A credit to additional paid in capital for $1,050,000 A credit to common stock for $42,000 A credit to cash for $1,050,000 A credit to additional paid in capital for a $42,000

A credit to common stock for $42,000

Which of the following statements is false? Absent evidence to the contrary a company is expected to continue operating for the foreseeable future An item is considered relevant if it has the ability to influence a decision Information is considered to be faithfully represented when it is complete neutral and free from error Accounting information should be reported in the national monetary unit with adjustments for inflation

Accounting information should be reported in the national monetary unit with adjustment for inflation

How do you company paid in accounts payable of $$2100. This transaction should be recorded on a payment date as follows

Accounts payable $2100 Cash $2100

Assets liabilities and stockholders equity are all found within which of the following financial statements? Balance sheet Income statement The investing activities section of the statement of cash flow Statement of stockholders equity

Balance sheet

Which of the following is represented by elements of the statements of stockholders equity? Common stock reinvested in the business Revenues plus dividends and expenses Earnings not distributed to owners Financing from creditors and stockholders

Earnings not distributed to owners

Which of the following statements regarding earns per share is not correct? Earnings per share can be reported on the income statement The numerator is net income The denominator is the average number of shares of common stock outstanding Earnings per share does not have to be disclosed on the income statement or the notes to the financial statement

Earnings per share does not have to be disclosed on the income statement or the notes to the financial statements

The primary difference between revenue and gain is? Gains or increase in net assets from periodically selling assets while revenues are increases from major or central ongoing operations of business Revenues increase operating income and gains have no impact on income Revenues cause increases in net assets as a result of infrequent activities and games cost increases through ongoing activities Gains result in an increase in operating income whereas revenues do not impact operating income

Gains are increased in net assets from periodically selling assets while revenues are increases from major or central ongoing operations of a business

Which of the following properly describes the impact on the financial statements when a company borrows $21,000 from a local bank? Net income increases $21,000 Assets decrease $21,000 Stockholders equity increases $21,000 Liabilities increase $21,000

Liabilities increase $21,000

Which of the following account balances would be closed at year end by crediting the account? Investment revenue Loss on sale of building Sales revenue Unearned revenues

Loss on sale of building

What is the effect on the financial statements when a company fails to adjust the prepaid insurance expense Account at the year end for insurance coverage that has been used? Net income is overstated and stockholders equity is understated Expenses are understated and stockholders equity is understated Expenses are understated and net income is understated Net income is overstated and assets are overstated

Net income is overstated and assets are overstated

Trends decorating company provide decorating services for store displays. Trend sold equipment that I had been using to create decorations. Of the following choices which will trend report on its income statement when it sells its equipment Operating revenue: sales revenue Operating expenses: loss on disposal of equipment Other items: loss on sale of equipment General and administrative expenses: sale of decorating equipment

Operating expenses: loss on disposable of equipment

June pizza company sold land costing $31,000 for $42,000 cash. Which of the following statements concerning the land sale is correct? The revenue account was debited for $42,000 The land account was credited for $42,000 Income before income taxes increased $31,000 Operating income increased $11,000

Operating income increased $11,000

On October 1, 2019 Adams company paid $5280 to for a two year insurance policy with the insurance coverage beginning on that date. As of December 31, 2019 which of the following account balances are correct after adjusting entries have been made? Prepaid insurance $2640 and insurance expense $2640 Prepaid insurance $4620 and insurance expense $660 Prepaid insurance zero dollars and insurance expense $5280 Prepaid insurance $5280 and insurance expense zero dollars

Prepaid insurance $4620 and insurance expense $660

Which of the following correctly describes the closing entry process? The closing process reduces the balances in the permanent account to zero at the end of each period The closing entries are usually prepared prior to the adjusted trial balances The closing process create a zero balance in all temporary accounts at the end of each period The closing process creates a zero balance at the end of each. All accounts on the year and trial balance

The closing process creates a zero balance in all temporary accounts at the end of each period

Which of the following describes the primary objective of financial accounting? To provide useful financial information only to stockholders To provide information about a business' future business strategies To provide useful financial information about a business to help external parties make informed decisions To provide useful financial information about the business to help internal parties make informed decisions

To provide useful financial information about a business to help external parties make informed decisions

Which of the following journal entries is correct when a company has incurred an expense work performed but has not yet been paid for those wages of employees

Wages expense Wages payable