Exam 1: Introduction to Financial Statements

Elston Company compiled the following financial information as of December 31, 2017: Service revenue \ 840,000 Common stock 180,000 Equipment 240,000 Operating expenses 750,000 Cash 210,000 Dividends 60,000 Supplies 30,000 Accounts payable 120,000 Accounts receivable 90,000 Retained earnings, 1/1/17 450,000 Elston's retained earnings on December 31, 2017 are

External users want answers to all of the following questions except

Expenses are incurred

All of the following are advantages for choosing a proprietorship for a business except

Gibson Company recorded the following cash transactions for the year: Paid $180,000 for salaries. Paid $80,000 to purchase office equipment. Paid $20,000 for utilities. Paid $8,000 in dividends. Collected $350,000 from customers. What was Gibson's net cash provided by operating activities?

GAAP, compared to IFRS, tends to be more

Which of the following would not be considered an external user of accounting data for the Julian Company?

Which of the following financial statements is divided into major categories of operating, investing, and financing activities?

Which of the following is not a principal type of business activity?

A business organized as a separate legal entity owned by stockholders is a partnership.

Notes to the financial statements include all of the following except

Assets are resources owned by a business and provide future services or benefits to the business.

The right to receive money in the future is called a(n)

The management discussion and analysis (MD&A) section of the annual report covers all of the following aspects except the

Which of the following is not a reason one set of international accounting standards are needed?

The company's policy toward dividends and growth could best be determined by examining the

Payments to owners are operating activities.

Financing activities for corporations include borrowing money and selling shares of their own stock.

The retained earnings statement shows all of the following except

The purchase of equipment is an example of a financing activity.