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Study Resources (Accounting)

1.4   Learning Objective 1-4 1) Net income is the profit left over after subtracting expenses and losses from revenues and gains. 2) The income statement is also called the Statement of financial position. 3) A company whose net income from operations is consistently increasing is regarded as a healthy, high-quality company. 4) A corporation.
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28) ABC Company had the following transactions during the year: A) ABC Company delayed issuing its financial statements because the accountant was on vacation. B) ABC Company determined that land that they purchased several years ago for $100,000 had a current fair market value of $140,000. To make the financial statements look.
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24) The proper order for the accounting process is: A) posting, transaction occurs, journalizing. B) transaction occurs, posting, journalizing. C) transaction occurs, transaction analyzed, journalizing, and posting. D) transaction occurs, posting, transaction analyzed, journalizing. 25) The ledger: A) is a grouping of all of the balance sheet accounts. B) is a grouping of all the T-accounts, with.
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49) Anya Smith started Geek Speak, a computer consulting business, in February, 2012. The company completed the following transactions during March, 2012: 1.  Geek Speak paid Anya a dividend of $1,000. 2.  Received partial payment from customers on account, $1,500. 3.  Purchased a new computer for $1,800 and paid cash. 4.  Borrowed $10,000 from.
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11) The basic component of paid-in capital is common stock. 12) The calculation of ending retained earnings considers beginning retained earnings, current net income or net loss, and dividends. 13) The two main components of stockholders' equity are paid-in capital and retained earnings. 14) Long-term debt is a liability that is payable beyond.
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3.1   Learning Objective 3-1 1) Accounting can be based on either the cash basis or the accrual basis. 2) Equity is increased when company makes a sale, not when the company collects the cash. 3) The transaction to record a cash sale will be the same under the accrual and cash-basis of accounting. 4).
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  2.1   Learning Objective 2-1 1) A transaction is any event that has a financial impact on the business that can be measured reliably. 2) Every transaction has two sides—you give something and you receive something. 3) Which of the following is NOT a business transaction? A) The company sells goods on account. B) The company buys.
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31) When preparing the financial statements: A) assets, liabilities, and revenues are reported on the balance sheet. B) the balance sheet reports the beginning balance of retained earnings. C) assets, liabilities, and stockholders' equity are reported on the balance sheet. D) assets, liabilities, and dividends are reported on the balance sheet. 32) Lucy Morton opened.
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2.5   Learning Objective 2-5 1) When preparing a journal entry, debits are always listed before credits. 2) The ledger is the book of original entry. 3) Information is taken from the ledger and the posted to the journal. 4) The total debits to an account must equal the total credits to the account. 5) In.
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2.3   Learning Objective 2-3 1) If a company declares and pays a dividend to its stockholders, both cash and expenses will decrease. 2) The rules for recording accounting transactions include all of the following EXCEPT: A) Every transaction's net amount on the left side of the equation must equal the net amount on.
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12) All of the following will appear on the income statement EXCEPT for: A) assets. B) expenses. C) gains. D) revenues. 13) Cost of goods sold: A) is considered a selling expense. B) is the direct cost of the product to the company. C) is classified as revenue on the income statement. D) is the same as gross profit. 14).
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11) When cash is paid for utilities: A) stockholders' equity is decreased. B) expenses are decreased. C) assets are increased. D) liabilities are increased. 12) A company paid cash for an amount owed to a creditor. This transaction decreased cash and: A) decreased revenues. B) decreased liabilities. C) decreased expenses. D) increased expenses. 13) Company Z sells land for the.
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2.4   Learning Objective 2-4 1) The double-entry system of accounting records the dual effects on the entity. 2) The amount remaining in an account is called its balance. 3) Double-entry accounting affects at least three accounts. 4) The left hand side of a T account is the debit side and the right hand side.
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44) Harvest Company had the following activity during the year: Revenue$139,500 Cost of Goods Sold68,000 Salaries Expense21,000 Utilities Expense12,100 Dividends7,000 At the beginning of the year, the balance in Retained Earnings was $51,000. In addition, Harvest Company had assets at the end of the year of $205,000, and Common Stock of $85,000. REQUIRED: 1.Compute the amount of the.
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25) Evan Jones started a sports consulting business and completed the following transactions during October, 2012: 1.  Evan incorporated the business, Sports, Inc., and invested $15,000 for common stock. 2.  Purchased a new computer on account, $2,000. 3.  Purchased $1,000 of office supplies, paying cash. 4.  Signed a football player to a contract and.
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11) Identify each of the following items with its appropriate financial statement, using the following abbreviations: Income Statement (IS), Statement of Retained Earnings (RE), Balance Sheet (BS), and Statement of Cash Flows (CF). Some items may appear on more than one financial statement. a.___ cash h.___ rent expense b.___ net cash used by operating activities i.___ interest revenue c.___ inventory j.___ retained.
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3.3   Learning Objective 3-3 1) In an unadjusted trial balance, the accounts are not yet ready for the preparation of the company's financial statements. 2) Accounts Receivable and Common Stock are accounts that need to be adjusted at the end of the period. 3) Certain accounts do not need to be adjusted at.
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48) Accounting has its own vocabulary and basic relationships. Match the following accounting terms with the corresponding definition or meaning. _____  1.Net incomeA)The cost of operating a business; a decrease in stockholders' equity _____  2.Receivable B)Always a liability _____  3.Journal C)Revenues minus expenses _____  4.Ledger D)Grouping of accounts _____  5.Balance of account E)Assets minus Liabilities _____ .
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11) To see how a transaction affects a business, managers must first enter the transaction in the journal. 12) The financial statements can be prepared from the information on the trial balance. 13) The normal balance of an expense account is a ________ because expenses decrease ________. A) debit, assets B) debit, expenses C) debit,.
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2.2   Learning Objective 2-2 1) The account is the basic summary device of accounting. 2) An accounts receivable usually specifies an interest rate. 3) Assets include cash, land, and accounts payable. 4) Prepaid expenses are an asset. 5) Income statement data appears as revenues and expenses under Retained Earnings. 6) A record of all the changes.
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17) The accounting equation can be stated as: A) Assets + Stockholders' Equity = Liabilities. B) Assets -Liabilities = Stockholders' Equity. C) Assets = Liabilities - Stockholders' Equity. D) Assets - Stockholders' Equity + Liabilities = Zero. 18) Regarding financial statement elements: A) assets must provide immediate benefits to the company. B) stockholders' equity represents the "outsider.
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1.3   Learning Objective 1-3 1) The accounting equation expresses the idea that Resources - Insider claims = Outsider claims. 2) Elements are the building blocks of the financial statements. 3) The word "payable" always signifies a liability. 4) The accounting equation must always be in balance. 5) Claims to assets must come from outsiders. 6) Owners'.
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34) The payment for monthly rent of an office building would include a: A) debit to Cash. B) debit to Prepaid Rent. C) debit to Rent Expense. D) credit to Revenue. 35) A journal entry that debits Cash and credits Accounts Receivable indicates that: A) payment was received on account. B) payment was made on account. C) revenue.
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12) Atlas, Inc. has the following assets, liabilities, revenues and expenses for the current year. The accounts are listed below in alphabetical order. The company has a December 31, 2012 year end. Accounts receivable$28,000Office equipment$59,500 Accounts payable37,000Office supplies5,000 Building45,000Service revenue130,000 Cash80,000Supplies expense 8,000 Commission expense20,500Utilities expense8,500 Common stock22,000Wage expense11,500 Interest payable1,500 Land40,000 Beginning retained earnings was $120,000 and dividends.
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1.2   Learning Objective 1-2 1) Generally accepted accounting principles, or GAAP, are the rules and procedures established by the Financial Accounting Standards Board, or the FASB. 2) The SEC sets international financial reporting standards. 3) The fundamental qualitative characteristics of accounting are relevance and materiality. 4) Information that is material must be separately disclosed.
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14) Accounting transactions are initially recorded in the: A) T-account. B) ledger. C) journal. D) financial statements. 15) The journalizing process involves all of the following steps except for: A) determining whether each account is increased or decreased by the transaction. B) copying the information from the journal to the ledger. C) entering the debit side on the.
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31) Which of the following is a correct numbering system for a chart of accounts? A) Accounts payable is numbered 153. B) Utilities expense is numbered 487. C) Accounts receivable is numbered 104. D) Sales revenue is numbered 809. 32) Which account has a normal debit balance? A) Salaries payable B) Common Stock C) Advertising Expense D) Service revenue 33).
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52) Stockholders' equity consists of: A) additional paid-in capital, which is equal to the par value of the stock. B) treasury stock, which represents stock of another corporation that the company has purchased. C) accumulated other comprehensive income, which represents items of gain or loss that bypass the income statement. D) common stock, which.
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37) Which of the following must be added to beginning Retained Earnings to compute ending Retained Earnings? A) Net income. B) Expenses. C) Dividends. D) All of the above. 38) At the end of the current accounting period, account balances were as follows: Cash, $15,000; Accounts Receivable, $20,000; Common Stock, $8,000; Retained Earnings, $14,000. Liabilities.
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45) Missy's Exotic Vacations, Inc., had the following transactions during its first month of operations: June1The company received cash of $35,000 and a building valued at $60,000. The corporation issued common stock to the shareholders. 2Borrowed $20,000 from the bank and signed a note payable. 8Purchased equipment on account for $6,000. 9Received cash of.
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27) Which of the following increases retained earnings? A) Net loss. B) Net income. C) Expenses. D) Dividends. 28) Receivables are classified as: A) increases in earnings. B) decreases in earnings. C) liabilities. D) assets. 29) Net income: A) is calculated by subtracting total expenses and total dividends from total revenues. B) occurs when total revenues are less than total expenses. C) is.
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11) The Financial Accounting Standards Board is responsible for establishing: A) the code of professional conduct for accountants. B) the Securities and Exchange Commission. C) generally accepted accounting principles. D) international accounting financial standards. 12) The acronym GAAP stands for: A) generally acceptable authorized pronouncements. B) government authorized accountant principles. C) generally accepted accounting principles. D) government audited accounting.
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1.5   Learning Objective 1-5 1) Retained earnings appears on which of the following financial statements? A) Statement of retained earnings, statement of cash flows, and balance sheet B) Statement of retained earnings and statement of cash flows C) Statement of retained earnings and income statement D) Statement of retained earnings and balance sheet 2) An evaluation.
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39) Sabre Company began business in June and completed the following transactions: A) Received $30,000 cash and issued common stock to the stockholders. B) Purchased supplies for $500, and equipment for $2,000 on account. C) Paid $2,000 monthly rent for office space. D) Performed services for a customer and billed the customer $4,500. E) Paid.
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3.2   Learning Objective 3-2 1) The revenue principle determines when to record revenue and the amount of revenue to record. 2) The revenue principle states that revenue should be recorded in the same period as the cash is received. 3) In the retail industry, income is recognized under IFRS when the cash is.
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21) Paying a repair bill as soon as it was received would: A) increase expenses. B) increase liabilities. C) increase owners' equity. D) decrease revenues. 22) If a company buys inventory on account: A) cash would decrease. B) accounts payable would increase. C) net income would increase. D) common Stock would decrease. 23) Receiving a payment from a customer on.
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