Info
Warning
Danger

Study Resources (Accounting)

              31.If the assets owned by a business total $150,000 and liabilities total $105,000, stockholders’ equity totals $45,000.               32.If the assets owned by a business total $100,000 and liabilities total $65,000, stockholders’ equity totals $25,000.               33.Claims of creditors and owners on the assets of a business are called.
10 Views
View Answer
121.Finney Company began the year by issuing $20,000 of common stock for cash. The company recorded revenues of $185,000, expenses of $160,000, and paid dividends of $10,000. What was Finney’s net income for the year? a.$15,000 b.$35,000 c.$25,000 d.$45,000 122.Lankston Company began the year by issuing $60,000 of common stock for cash. The company.
11 Views
View Answer
TRUE-FALSE STATEMENTS               1.A business organized as a separate legal entity owned by stockholders is a partnership.               2.Corporate stockholders generally pay higher taxes but have no personal liability.               3.The liability of corporate stockholders is limited to the amount of their investment.               4.The majority of U.S. business is transacted.
24 Views
View Answer
              21.Both investors and creditors have an interest in a company’s ability to generate favorable cash flows.               22.The statement of cash flows is divided into two sections corresponding to investing activities and financing activities.               23.The statement of cash flows discloses significant events related to the operating, investing, and financing activities.
8 Views
View Answer
BRIEF EXERCISES Be. 175 Indicate in the space by letter whether each statement below applies to a sole proprietorship (S), partnership (P), or corporation (C). More than one answer may be appropriate. ____a.Simple to establish. ____b.Shared control. ____c.Easy to transfer ownership. ____d.No personal liability. ____e.Tax advantage. ____f.Easier to raise funds. Be. 176 Indicate in the space provided by each.
9 Views
View Answer
              71.Which of the following is a user of accounting information with an indirect financial interest in a business? a.A financial adviser b.Management c.Investor d.Creditor               72.Which type of corporate information is readily available to investors? a.financial comparison of operating alternatives b.marketing strategies for a product that will be introduced in eighteen months c.forecasts of cash needs.
10 Views
View Answer
116.Which of the following is a measure of liquidity? a.Working capital b.Profit margin c.Earnings per share d.Debt to equity ratio 117.Current assets divided by current liabilities is known as the a.working capital. b.current ratio. c.profit margin. d.capital structure.               118.The most important information needed to determine if companies can pay their current obligations is the a.net income for this year. b.projected net.
5 Views
View Answer
106.Most companies use a(n)  _________ rather than a retained earnings statement. a.balance sheet b.income statement c.statement of cash flows d.statement of stockholders’ equity               107.Dividends appear on a.the retained earnings statement only. b.the income statement only. c.both the retained earnings statement and the balance sheet. d.the balance sheet only.               108.Issuing new shares of common stock will a.increase retained earnings. b.decrease retained.
6 Views
View Answer
Be. 179 Listed below in alphabetical order are the balance sheet items of Nolan Company at December 31, 2012. Prepare a balance sheet and include a complete heading. Accounts payable$    6,000 Accounts receivable15,000 Buildings65,000 Cash11,000 Common stock80,000 Land31,000 Equipment5,000 Retained earnings41,000 Be. 180 Indicate in the space provided by each item whether it would appear on the Income Statement (IS), Balance.
8 Views
View Answer
Ex. 194 At September 1, the balance sheet accounts for Kiner's Restaurant were as follows: Accounts Payable$ 3,800Land$33,000 Accounts Receivable1,600Common Stock? Buildings66,000Notes Payable46,000 Cash5,000Supplies3,600 Equipment15,700Retained Earnings45,200 The following transactions occurred during the next two days: Stockholders invested an additional $25,000 cash in the business. The accounts payable were paid in full. (No payment was made on the notes.
11 Views
View Answer
161.Marvin Services Corporation had the following accounts and balances: Accounts payable $12,000 Equipment $14,000 Accounts receivable 2,000 Land 14,000 Buildings ? Unearned service revenue 4,000 Cash 6,000 Total stockholders' equity ? If the balance of the Buildings account was $28,000 and $2,000 of Accounts Payable were paid in cash, what would be the balance of the total stockholders' equity? a.$54,000 b.$48,000 c.$68,000 d.$52,000 162.Marvin Services Corporation had the following accounts and.
10 Views
View Answer
111.The company’s policy toward dividends and growth could best be determined by examining the a.Balance sheet. b.Income statement. c.Retained earnings statement. d.Statement of cash flows.               112.An income statement a.summarizes the changes in retained earnings for a specific period of time. b.reports the changes in assets, liabilities, and stockholders’ equity over a period of time. c.reports the.
7 Views
View Answer
              131.Ashley’s Accessory Shop started the year with total assets of $70,000 and total liabilities of $40,000. During the year the business recorded $110,000 in revenues, $55,000 in expenses, and dividends of $20,000. The net income reported by Ashley’s Accessory Shop for the year was a.$40,000. b.$50,000. c.$65,000. d.$55,000. 132.If total liabilities increased by.
11 Views
View Answer
Ex. 200 This information is for Campo Corporation for the year ended December 31, 2012. Cash received from lenders$20,000 Cash received from customers65,000 Cash paid for new equipment30,000 Cash dividends paid6,000 Cash paid to suppliers18,000 Cash balance 1/1/1212,000 Instructions Prepare the 2012 statement of cash flows for Campo Corporation. Ex. 201 One item is omitted in each of the following summaries.
7 Views
View Answer
              81.Debt securities sold to investors that must be repaid at a particular date some years in the future are called a.accounts payable. b.notes receivable. c.taxes payable. d.bonds payable.               82.Which of the following activities involves collecting the necessary funds to support the business? a.Operating b.Investing c.Financing d.Delivering               83.Buying assets needed to operate a business is an.
11 Views
View Answer
Be. 187 Classify each of these items as an asset (A), liability (L), or stockholders’ equity (SE). _____1.Accounts receivable _____2.Accounts payable _____3.Common stock _____4.Supplies _____5.Retained earnings _____6.Cash _____7.Notes payable _____8.Equipment Be. 188 At the beginning of the year, Gant Company had total assets of $690,000 and total liabilities of $300,000. Answer the following questions viewing each situation as being independent of.
10 Views
View Answer
Be. 183 Determine the missing items. Assets   =   Liabilities + Stockholders’ Equity $75,000$56,000(a) (b)$28,000$34,000 $84,000(c)$55,000 Be. 184 Determine the missing items. Assets   =   Liabilities + Stockholders’ Equity $61,000$50,000(a) (b)$18,000$30,000 $54,000(c)$40,000 Be. 185 Identify which of the following accounts appear on a balance sheet. (a) Service revenue (b) Cash (c) Common stock (d) Accounts payable (e) Rent expense (f)    Supplies (g) Land Be. 186 For the.
9 Views
View Answer
              11.The retained earnings statement describes the changes in retained earnings during the period.               12.The retained earnings statement is more comprehensive than the statement of shareholders’ equity.               13.Revenues have the effect of increasing retained earnings.               14.Most companies use a retained earnings statement rather than a statement of stockholders’ equity.               15.The.
9 Views
View Answer
Ex. 193 Use the following accounts and information to prepare, in good form, an income statement, a retained earnings statement, and a balance sheet for Pierce Industries for the month ended August 31, 2012. Accounts payable$  1,100Dividends$ 3,000 Accounts receivable5,400Insurance expense1,200 Buildings 63,000Supplies1,400 Cash20,600Notes payable3,300 Service revenue 25,700 Rent expense3,400 Common stock52,000Salaries expense 10,000 Retained earnings (beginning)25,900 PIERCE INDUSTRIES Income.
9 Views
View Answer
S-A E 216 How are each of the following financial statements interrelated? (a) Retained earnings statement and income statement. (b) Retained earnings statement and balance sheet. (c) Balance sheet and statement of cash flows. S-A E 217 Broadway Corporation’s stockholders’ equity equals one-fourth of the company’s total assets. The company’s liabilities are $270,000..
10 Views
View Answer
EXERCISES Ex. 192 Prepare an income statement, a retained earnings statement, and a balance sheet for the medical practice of Linda Denny, MD, from the items listed below for the month of October 2012. Retained earnings (October 1)$15,000 Common stock30,000 Accounts payable6,000 Equipment29,000 Service revenue23,000 Dividends6,000 Supplies expense3,500 Cash13,000 Utilities expense700 Supplies2,800 Salaries and wages expense7,000 Accounts receivable10,000 Rent expense2,000 LINDA DENNY, MD Income Statement For the Month.
9 Views
View Answer
101.Ending retained earnings for a period is equal to: a.Beginning retained earnings + Net income + Dividends b.Beginning retained earnings – Net income – Dividends c.Beginning retained earnings + Net income – Dividends d.Beginning retained earnings – Net income + Dividends Ans: C, SO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA.
10 Views
View Answer
MULTIPLE CHOICE QUESTIONS               56.In a classified balance sheet, assets are usually classified as: a.current assets; long-term assets; property, plant, and equipment; and intangible assets. b.current assets; long-term investments; property, plant, and equipment; and common stocks. c.current assets; long-term investments; tangible assets; and intangible assets. d.current assets; long-term investments; property, plant, and equipment; and intangible.
12 Views
View Answer
              91.Resources owned by a business are referred to as a.stockholders’ equity. b.liabilities. c.assets. d.revenues.               92.The best definition of assets is the a.cash owned by the company. b.collections of resources belonging to the company and the claims on these resources. c.Owners’ investment in the business. d.resources belonging to a company have future benefit to the company..
8 Views
View Answer
              11.Two primary external users of accounting information are investors and creditors.               12.Financing activities for corporations include borrowing money and selling shares of their own stock.               13.Investing activities involve collecting the necessary funds to support the business.               14.The purchase of equipment is an example of a financing.
8 Views
View Answer
TRUE-FALSE STATEMENTS               1.Cash and supplies are both classified as current assets.               2.Long-term investments appear in the property, plant, and equipment section of the balance sheet.               3.A liability is classified as a current liability if it is to be paid within the coming year.               4.Stockholders’ equity is divided into two parts:.
19 Views
View Answer
COMPLETION STATEMENTS 202.A business organized as a separate legal entity owned by stockholders is a ___________. 203._______________ of accounting information are managers who plan, organize, and run a business. 204._________________ activities involve collecting the necessary funds to start the business. 205.The ________________ reports the assets, liabilities, and stockholders’ equity of a.
8 Views
View Answer
              61.Which of the following is the most appropriate and modern definition of accounting? a.The information system that identifies, records, and communicates the economic events of an organization to interested users b.A means of collecting information c.The interconnected network of subsystems necessary to operate a business d.Electronic collection, organization, and communication of vast amounts.
8 Views
View Answer
MULTIPLE CHOICE QUESTIONS               41.The proprietorship form of business organization a.must have at least two owners in most states. b.generally receives favorable tax treatment relative to a corporation. c.combines the records of the business with the personal records of the owner. d.is classified as a separate legal entity.               42.A business organized as a corporation a.is.
10 Views
View Answer
              51.A small neighborhood barber shop that is operated by its owner would likely be organized as a a.joint venture. b.partnership. c.corporation. d.proprietorship.               52.A local retail shop has been operating as a sole proprietorship. The business is growing and now the owner wants to incorporate. Which of the following is not a reason.
8 Views
View Answer
Ex. 196 Here are incomplete financial statements for Brandon, Inc. BRANDON, INC. Balance Sheet AssetsLiabilities and Stockholders' Equity Cash$  5,000Liabilities Inventory10,000   Accounts payable$  5,000 Buildings   40,000Stockholders' equity Total assets$55,000   Common stock(a)    Retained earnings    (b)    Total liabilities and    stockholders' equity$55,000 Ex. 196(Cont.) Income Statement Revenues$80,000 Cost of goods sold(c) Administrative expenses  10,000 Net income$   (d)    Retained Earnings Statement Beginning retained earnings$10,000 Net income(e) Dividends   5,000 Ending retained earnings$29,000 Instructions Calculate.
8 Views
View Answer
MATCHING 210.Match the items below by entering the appropriate code letter in the space provided. A.Internal users              F.              Corporation B.Management discussion and analysis              G.Assets C.Annual report              H.              Liabilities D.Sole proprietorship              I.              Expenses E.Dividends              J.               Investing activities ____              1.Distributions of cash from a corporation to its stock holders. ____              2.Consumed assets or services. ____              3.Ownership is limited to one.
8 Views
View Answer
Ex. 198 John Tate is the bookkeeper for Gabelli Company. John has been trying to get the balance sheet of Gabelli Company to balance. It finally balanced, but now he's not sure it is correct. GABELLI COMPANY Balance Sheet December 31, 2012 AssetsLiabilities and Stockholders' Equity Cash$15,500Accounts payable$18,000 Supplies9,500Accounts receivable(12,000) Equipment 50,000Common stock40,000 Dividends  10,000Retained earnings  39,000 Total assets$85,000Total liabilities.
8 Views
View Answer
141.Stockholders’ equity can be described as claims of a.creditors on total assets. b.owners on total assets. c.customers on total assets. d.debtors on total assets. 142.Payments to stockholders are called a.expenses. b.liabilities. c.dividends. d.distributions. 143.Common stock is reported on the a.statement of cash flows. b.retained earnings statement. c.income statement. d.balance sheet. 144.Stockholders’ equity is comprised of a.common stock and dividends. b.common stock and retained earnings. c.dividends.
9 Views
View Answer
IFRS Questions               1.Internal users of accounting information include all of the following except a.the CEO of Sony. b.the Human Resources department at Hyundai. c.the marketing department at Braun. d.the shareholders of Airbus.               2.Internal users of accounting information include a.the shareholders of Royal Dutch Shell. b.the Internal Revenue Service. c.the Chief Financial Officer of Credit Suisse. d.the International Accounting.
11 Views
View Answer
              96.Earnings per share is a a.profitability ratio. b.liquidity ratio. c.solvency ratio. d.trending ratio.               97.Which of the following statements is true? a.Earnings per share is an internal measure and is not used by shareholders. b.The denominator used in computing earnings per share represents the shares of common stock outstanding on the last day of the accounting.
9 Views
View Answer
126.The ability of a business to pay obligations that are expected to become due within the next year or operating cycle is a.leverage. b.liquidity. c.profitability. d.wealth. 127.Based on the following data, what is the amount of current assets? Accounts payable………………………………………………………..$62,000 Accounts receivable……………………………………………………..  100,000 Cash……………………………………………………………………….  30,000 Intangible assets…………………………………………………………  100,000 Inventory………………………………………………………………….  138,000 Long-term investments………………………………………………….  160,000 Long-term liabilities………………………………………………………200,000 Short-term investments………………………………………………….  80,000 Notes payable…………………………………………………………….  56,000 Plant assets………………………………………………………………1,340,000 Prepaid expenses………………………………………………………..    2,000 a.$192,000 b.$350,000 c.$212,000 d.$210,000              .
5 Views
View Answer
              76.Use the following data to determine the total dollar amount of assets to be classified as property, plant, and equipment. Koonce Office Supplies Balance Sheet December 31, 2012 Cash$    130,000Accounts Payable$  140,000 Prepaid Insurance60,000Salaries Payable20,000 Accounts Receivable100,000Mortgage Payable    160,000 Inventory  140,000     Total Liabilities$320,000 Land held for Investment150,000 Land180,000 Buildings$200,000Common Stock$240,000    Less AccumulatedRetained Earnings  500,000         Depreciation(40,000)160,000   Total Stockholders’ Equity$740,000 Trademarks    140,000     .
10 Views
View Answer
              21.A different set of financial statements usually is prepared for each user.               22.The heading for the income statement might include the line “As of December 31, 20xx.”               23.Net income is another term for revenue.               24.Cash is another term for Stockholders’ Equity.               25.The primary purpose of.
9 Views
View Answer
              31.For information to be useful, it must be both relevant and faithfully representative.               32.Consistent use of the same accounting principles and methods is necessary for meaningful analysis of trends within a company.               33.A major function of management is to provide the accountant with relevant and useful information.               34.The advantage.
9 Views
View Answer
              41.The economic entity assumption states that economic events can be identified with a particular unit of accountability.               42.The economic entity assumption states that assets should be recorded at their cost.               43.The monetary unit assumption states that transactions that can be measured in terms of money should be recorded in.
17 Views
View Answer
              86.K2 Corporation has assets of $1.80 million, common stock of $468,000, and retained earnings of $285,000. What are the creditors’ claims on their assets? a.$1,617,000 b.$   753,000 c.$1,047,000 d.$1,983,000               87.Use the following data to determine the total dollar amount of assets to be classified as current assets. Eddy Auto Supplies Balance Sheet December 31, 2012 Cash$    100,000Accounts.
5 Views
View Answer
151.Why are financial statement users interested in the statement of cash flows? a.It is the easiest financial statement to evaluate. b.It provides information about an important company resource. c.It is the first statement that is presented to users. d.It helps users decide whether assets such as office equipment should be replaced. 152.Why should the.
10 Views
View Answer
              66.Equipment is classified on the balance sheet as a.a current asset. b.property, plant, and equipment. c.an intangible asset. d.a long-term investment.               67.It is not true that current assets are resources that are expected to be a.realized in cash within one year. b.sold within one year. c.consumed within one year. d.acquired within one year. 68.              The operating cycle of.
7 Views
View Answer

Welcome Back!

ScholarOn has more then 20 Million answers, flashcards & more being added everyday!

or
Forgot?
Login
Don't have an account? Signup

Join ScholarOn

ScholarOn has more then 20 Million answers, flashcards & more being added everyday!

or
Signup
By registering, I agree to the Terms and Privacy Policies
Already have an account? Log in

Verify Your Email

Check your inbox & click on the link to activate your account.

Resend Email
Verification Mail Send Successfully. Please Check Your Email.

Forgot Password

Please enter your registered email to recieve the password reset link.

Send reset link
Already have an account? Log in
Did you know?

ScholarOn has more than 2 Million+ answers, textbook solutions & flashcards. Explore Now!

Let us boost your grade together!