Accounting Test 1

Packard Company engaged in the following transactions during 2015, its first year in operations: (Assume all transactions are cash transactions.) 1) Acquired $950 cash from the issue of common stock. 2) Borrowed $420 from a bank. 3) Earned $650 of revenues. 4) Paid expenses of $250. 5) Paid a $50 dividend. During 2016, Packard engaged in the following transactions: (Assume all transactions are cash transactions.) 1) Issued an additional $325 of common stock. 2) Repaid $220 of its debt to the bank. 3) Earned revenues of $750. 4) Incurred expenses of $360. 5) Paid dividends of $100. The amount of total equity on Packard's 2015 balance sheet is

$1300

The balance sheet of the Algonquin Company reported assets of $50,000, liabilities of $22,000 and common stock of $15,000. Based on this information only, the amount or balance for retained earnings must be:

$13000

Stosch Company's balance sheet reported assets of $40,000, liabilities of $15,000 and common stock of $12,000 as of December 31, 2015. If Retained Earnings on the December 31, 2016 balance sheet is $18,000 and Stosch paid a $14,000 dividend during 2016, then the amount of net income for 2016 was which of the following?

$19000

If Ballard Company reported assets of $500 and liabilities of $200, Ballard's stockholders' equity totaled

$300

On January 1, 2015, Chavez Company had beginning balances as follows: Assets = $12,500 Liabilities = $4,500 Common Stock = $3,000 During 2016, Chavez paid dividends to its stockholders of $2,000. Given that ending retained earnings was $6,000, what was Chavez's net income for the 2016 accounting period?

$3000

At the end of 2016, retained earnings for the Baker Company was $3,500. Revenue earned by the company in 2016 was $1,500, expenses paid during the period were $800, and dividends paid during the period were $500. Based on this information alone, retained earnings at the beginning of 2016 was

$3300

Packard Company engaged in the following transactions during 2015, its first year in operations: (Assume all transactions are cash transactions.) 1) Acquired $950 cash from the issue of common stock. 2) Borrowed $420 from a bank. 3) Earned $650 of revenues. 4) Paid expenses of $250. 5) Paid a $50 dividend. During 2016, Packard engaged in the following transactions: (Assume all transactions are cash transactions.) 1) Issued an additional $325 of common stock. 2) Repaid $220 of its debt to the bank. 3) Earned revenues of $750. 4) Incurred expenses of $360. 5) Paid dividends of $100. The net cash inflow from operating activities on Packard's 2015 statement of cash flows is

$400

Lexington Company engaged in the following transactions during 2015, its first year in operation: (Assume all transactions are cash transactions) 1. Acquired $6,000 cash from issuing common stock. 2. Borrowed $4,400 from a bank. 3. Earned $6,200 of revenues. 4. Incurred $4,800 in expenses. 5. Paid dividends of $800. Lexington Company engaged in the following transactions during 2016: 1. Acquired an additional $1,000 cash from the issue of common stock. 2. Repaid $2,600 of its debt to the bank. 3. Earned revenues, $9,000. 4. Incurred expenses of $5,500. 5. Paid dividends of $1,280. The amount of retained earnings on Lexington's 2015 balance sheet was

$600

Yowell Company began operations on January 1, 2016. During 2016, the company engaged in the following cash transactions: 1) issued stock for $40,000 2) borrowed $25,000 from its bank 3) provided consulting services for $39,000 4) paid back $15,000 of the bank loan 5) paid rent expense for $9,000 6) purchased equipment costing $12,000 7) paid $3,000 dividends to stockholders 8) paid employees' salaries, $21,000 What is Yowell's net income?

$9000

What is managerial accounting information?

Accounting information that is more detailed than financial accounting information, can include non financial information, and focuses on divisional rather than overall profitability.

Borrowing cash from the bank is an example of which type of transaction?

Asset Source

During 2016, Millstone Company earned $6,500 of cash revenue, paid cash dividends of $1,000 to owners and paid $4,000 for cash expenses. Liabilities were unchanged. What accurately describes the effect of these events on the elements of the company's financial statements?

Assets increased by $1500

Hazeltine Company issued common stock for $200,000 cash. As a result of this event, what increases?

Assets, claims, and equity

What is not an element of the financial statement?

Cash

The Heritage Company is a manufacturer of office furniture. What term best describes Heritage's role in society?

Conversion agent (business)

What resource provider lends financial resources to a business with the expectation of repayment with interest?

Creditors

What group has the primary responsibility for establishing generally accepted accounting principles in the United States?

FASB - Financial Accounting Standards Board

Elements are subclassifications of the various accounts of the financial statements.

False

Which financial statement matches asset increases from operating a business with asset decreases from operating the business?

Income Statement

Yowell Company began operations on January 1, 2016. During 2016, the company engaged in the following cash transactions: 1) issued stock for $40,000 2) borrowed $25,000 from its bank 3) provided consulting services for $39,000 4) paid back $15,000 of the bank loan 5) paid rent expense for $9,000 6) purchased equipment costing $12,000 7) paid $3,000 dividends to stockholders 8) paid employees' salaries, $21,000 What is Yowell's net cash flow from operating activities?

Inflow of $9000

What is not an asset use transaction?

Paying cash to purchase land

During 2016, Chico Company earned $1,950 of cash revenue, paid $1,600 of cash expenses, and paid a $150 cash dividend to its owners. Based on this information alone, which of the following is not correct? a) Net income amounted to $350. b) Total assets increased by $200. c) Cash inflow from operating activities was $350. d) Cash inflow from operating activities was $200.

d) Cash inflow from operating activities was $200.

Which of the following items would appear in the cash flow from financing activities section of a statement of cash flows? a) Paid cash for dividends. b) Received cash for common stock. c) Sold land for cash. d) Section paying cash for dividends and receiving cash from common stock would both appear in the cash flow from financing activities section.

d) Section paying cash for dividends and receiving cash from common stock would both appear in the cash flow from financing activities section.

Mayberry Company paid $30,000 cash to purchase land. As a result of this business event... a) Total equity was not affected. b) The net cash flow from investing activities decreased. c) Total assets were not affected. d) Total assets and total equity were not affected, and net cash flow from investing activities decreased.

d) Total assets and total equity were not affected, and net cash flow from investing activities decreased.

Retained earnings reduces a company's commitment to use its assets for the benefit of its stockholders.

false

The stockholders of a business have a priority claim to its assets in the event of liquidation.

false

The value created by a business may be called assets.

false