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Exam 1: An Introduction to Accounting

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Question 51

True/False

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Financial accounting information is usually less detailed than managerial accounting information.

A) True
B) False

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Question 52

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As of December 31, Year 2, Bristol Company had $100,000 of assets, $40,000 of liabilities and $25,000 of retained earnings. What percentage of Bristol's assets were obtained through investors?

A) 60%
B) 25%
C) 40%
D) 35%

E) A) and B)
F) A) and C)

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Question 53

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Liabilities are shown on the:

Borrowing money from the bank is an example of an asset source transaction.

Delta Company experienced an accounting event that affected its financial statements as indicated below: Which of the following accounting events could have caused these effects on Delta's statements?

Which of the following cash transactions results in no net change in assets?

Indicate whether each of the following statements about markets is true or false. _______ a) Financial resources can be provided to a business by conversion agents. _______ b) Resource owners are the businesses that transform resources into products that satisfy consumer desires. _______ c) Labor resources include the both the physical and intellectual labor of a business's employees. _______ d) Conversion agents purchase their resources from resource owners. _______ e) Consumers are the main providers of resources in any market.

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:

Financial accounting standards are known collectively as GAAP. What does that acronym stand for?

Retained Earnings at the beginning and ending of the accounting period was $300 and $800, respectively. If revenues were $1,100 and dividends paid to stockholders were $200, expenses for the period must have been:

During Year 2, 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?

Indicate whether each of the following statements about liabilities is true or false. _______ a) A net loss on the income statement decreases liabilities. _______ b) The acquisition of a bank loan increases both assets and liabilities. _______ c) The accounting equation requires that liabilities be equal to equity. _______ d) The amount of a company's liabilities is equal to (assets - equity). _______ e) Liabilities are reported on the statement of cash flows of a business.

Northern Corporation invested $800 cash in South Company stock. As a result of this transaction:

Which type of accounting information is intended to satisfy the needs of external users of accounting information?

The types of resources needed by a business are financial, physical, and labor resources.

Stosch Company's balance sheet reported assets of $40,000, liabilities of $15,000 and common stock of $12,000 as of December 31, Year 1. If Retained Earnings on the balance sheet as of December 31, Year 2, amount to $18,000 and Stosch paid a $14,000 dividend during Year 2, then the amount of net income for Year 2 was which of the following?

In a market, a company that manufactures cars would be referred to as a conversion agent.

Jackson Company had a net increase in cash from operating activities of $10,000 and a net decrease in cash from financing activities of $2,000. If the beginning and ending cash balances for the company were $4,000 and $11,000, then net cash change from investing activities was:

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

Packard Company engaged in the following transactions during Year 1, its first year of 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 cash. 4) Paid expenses of $250. "5) Paid a $50 dividend. During Year 2, 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 cash. 4) Incurred expenses of $360. "5) Paid dividends of $100. Packard Company's net cash flow from financing activities for Year 2 is:"