Exam 1: Introducing Financial Accounting

The Securities and Exchange Commission (SEC) is an agency of the federal government that establishes reporting requirements for companies that issue stock to the public.

Revenues are increases in retained earnings from a company's earnings activities.

Identifying business activities requires selecting transactions and events relevant to an organization. Which of the following events would be recorded in the accounting records of Acme Car Wash?

Owner financing refers to resources contributed by creditors or lenders.

From the information given, prepare a November income statement. On November 1 of the current year, Lois Bell began Lois Bell, Interior Design as a corporation with an initial investment of $50,000 cash. On November 30 her records showed the following (alphabetically arranged) selected accounts and amounts: Accounts payable \ 12,000 Office furnishings \ 40,000 Accounts receivable 23,000 Dividends 6,000 Cash 17,200 Rent expense 3,600 Fees earned 30,000 Salaries expense 6,200 Notes payable 4,250 Telephone expense 250

______________________ are procedures set up to protect company property and equipment, ensure reliable accounting reports, promote efficiency, and encourage adherence to company policies.

Acme Company had equity of $55,000 at the end of the current year. During the year the company had a $2,000 net loss and investments by owners in exchange for stock of $7,000. Compute equity as of the beginning of the year.

Marian Mosely is the owner of Mosely Accounting Services. Which accounting assumption requires Marian to keep her personal financial information separate from the financial information of Mosely Accounting Services?

Beginning assets were $700,000, beginning equity was $225,000, revenue for the year was $523,000, common stock issued during the year totaled $320,000, expenses for the year were $392,000, ending equity is $751,000, and ending assets are $963,000. What were the total dividends declared?

Our company has three times as many assets as it does liabilities. If total liabilities are $55,000, what is the amount of owners' equity?

If the liabilities of a business increased $86,000 during a period of time and equity in the business decreased $23,000 during the same period, enter the appropriate amounts for this activity in the accounting equation format shown below. Assets = Liabilities + Equity

Photometer Company paid off $30,000 of its accounts payable in cash. What would be the effects of this transaction on the accounting equation?

An asset is:

The balance sheet is based on the accounting equation.

Which of the following statements is true?

Accounting is one way important financial information about businesses is reported to decision makers.

If net income for the period was $134,250, dividends distributed were $76,530 and ending retained earnings was $862,520, what was the beginning retained earnings for the period?

External auditors audit the financial statements to verify that they are prepared according to generally accepted accounting principles.

The financial statement that shows beginning and ending retained earnings balances and the effects of net income (loss) and a dividend for the period is the: