Learnsmarts Questions I got wrong Test 1
Ace Electronics paid $4,000 of the $5,000 its employees had earned during the period. Ace Electronics should report Wages Expense of $5,000 on the income statement and Wages Payable of ______ on the balance sheet prepared in accordance with generally accepted accounting principles. Multiple choice question.
$1,000, The amount owed, Wages Payable on the balance sheet, is the $5,000 incurred as an expense minus the $4,000 that has been paid.
Axis Company just bought a piece of land for $25,000. What a deal! The land next door was sold last month for $27,000. Axis immediately put the land back on the market for $29,000, but so far hasn't had any offers. This land would appear on Axis Company's balance sheet at a value of:
$25,000, Assets are initially reported based on their original cost to the company.
Ace Electronics sold $5,000 of goods to customers of which $3,000 has been collected. Using accrual accounting, Ace Electronics should report revenues of ______.
$5,000
Prepare a single-step income statement in its proper order starting from the top to the bottom.
(picture on phone)
A company's fiscal year end is a:
12-month period ending on a day other than December 31.
At December 31, Equate, Inc.'s assets equal $50,000 and liabilities equal $30,000. Stockholders' equity must equal
20,000
At December 31, Aloe, Inc.'s assets equal $8,000 and stockholders' equity equals $5,000. Liabilities must equal
3,000 or 3000
Companies typically prepare ______ financial statements each accounting period.
4 (statement of cash flows, balance sheet, etc)
Which of the following are found on a balance sheet? (Select all that apply.)
Accounts Receivable Retained Earnings Notes Payable Cash
Select all of the line-items found on a statement of retained earnings for the month ended September 30.
Add: Net Income Retained Earnings, September 1 Subtract: Dividends Retained Earnings, September 30
Which of the following are ways of expressing the basic accounting equation? (Select all that apply.)
Assets - Stockholders' Equity = Liabilities Assets = Liabilities + Stockholders' Equity Assets - Liabilities = Stockholders' Equity
A single-step income statement includes which of the following? (Select all that apply.)
Expenses Net Income Revenues
Which of the following are the correct terms for the 3 activities found on the statement of cash flows? (Select all that apply.)
Investing Financing Operating
Which of the following statements are true?
Retained Earnings increases when a company earns and keeps its profit
balance sheet
Revenues and expenses are on the income statement. Retained earnings incorporates the revenues and expenses and equals the beginning retained earnings plus the current period's net income (=revenues - expenses) minus dividends equals the ending retained earnings on the balance sheet.
Which financial statement reports the accumulation of profits kept by the business during the current accounting period with that of prior periods?
Statement of retained earnings
Which of the following are found on a balance sheet?
Supplies Notes Payable Equipment Common Stock
True or false: Creditors would like a company that owes them money to have a large positive cash flow from operating activities. True false question.
True
Liberty, Inc., a US company, sold merchandise to Belle, a French company, for 10,000 euros. In Liberty's US financial statements, this sale should be reported in ______.
US dollars
The balance sheet balances when
assets equal liabilities plus stockholders' equity
Supplies are-
assets that can be used in the process of earning revenue in the near future.
The balance sheet reports
assets, liabilities and stockholders' equity at a specific point in time
The purpose of the balance sheet is to report the amount of
assets, liabilities, and stockholders' equity at a specific point in time
The statement of cash flows reports the
cash paid, not expenses. The income statement reports expenses.
Retained earnings are ______. (Select all that apply.)
decreased by dividends increased by net income
The heading of an income statement ______. (Select all that apply.)
includes the time period covered includes the name of the company indicates if the reported numbers are rounded to the nearest thousand or million
The 4 financial statements consist of the
income Blank 2: retained Blank 3: balance Blank 4: cash
Expenses appear on the
income statement
What information appears on the statement of retained earnings? (Select all that apply.)
net income ending balance of retained earnings dividends beginning balance of retained earnings
The main reason companies exist is to maximize their
profits owners' wealth
Information that always makes a difference in a decision is
relevant
An income statement includes which of the following item(s). (Select all that apply.)
revenues expenses net income
A corporation earns profits for its stockholders by ______. (Check all that apply.)
selling goods at more than their cost providing services at more than cost
US GAAP are ______.
the accounting rules developed by the FASB for use in the United States
The heading of an income statement should include ______. (Select all that apply.)
the title "Income Statement" the name of the business the accounting period covered by the statement
A fiscal year can end on a date other than December 31. A calendar year ends on December 31.
true, A company will typically pick a fiscal year end that is the start of its slow business period. It is not required to pick a calendar year end of December 31.