Exam 1: Introduction to Accounting and Business

The accountant for Scott Industries prepared the following list of account balances from the company's records for the year ended December 31: Fees earned \ 165,000 Cash Accounts receivable 14,000 Selling expenses Equipment 64,000 Common stock Accounts payable 12,000 Interest income Salaries \& wages expense 40,000 Frepaid rent Income taxes payable 5,000 Income taxes expense Notes payable 20,000 Rent expense -Shiny Kar Company had the following transactions. For each transaction, show the effect on the accounting equation by putting the amount and direction plus, minus, or NC for no change) in each box of the table below. Assets Liabilities Stockholder's equity a) Shiny K ar withdrew \ 500 cash for food b) Shiny K ar Company sold 2 cars for a total of \ 55,000 on account c) The cost of the cars sold in b) above was \ 40,000 d) Shiny Kar received \ 35,000 payment for a car previ ously sold on account e) Shiny Kar paid \ 450 for advertising f) Shiny K ar purchased \ 150 of cleaning supplies on account

Which of the following would not normally operate as a service business?

The objectivity concept requires that

Given the following: Beginning stockholders' equity $58,000 Ending stockholders' equity $30,000 Stockholder dividends $25,000 Calculate net income or net loss.

If total assets increased by $190,000 during a specific period and liabilities decreased by $10,000 during the same period, the period's change in total stockholders' equity was a $200,000 increase.

The stockholders' rights to the assets rank ahead of the creditors' rights to the assets.

All of the following are general-purpose financial statements except

Which of the items below is not a business entity?

As of the end of its accounting period, December 31, Year 1, Great Plains Company has assets of $940,000 and liabilities of $300,000. During Year 2, stockholders invested an additional $73,000 and received $33,000 in dividends from the business. What is the amount of net income during Year 2, assuming that as of December 31, Year 2, assets were $995,000, and liabilities were $270,000?

Which of the following is not a certification for accountants?

Which of the following is not a business transaction?

Which of the following is not true of accounting principles?

Donner Company is selling a piece of land adjacent to its business. An appraisal reported the market value of the land to be $120,000. The Focus Company initially offered to buy the land for $107,000. The companies settled on a purchase price of $115,000. On the same day, another piece of land on the same block sold for $122,000. Under the cost concept, what is the amount that will be used to record this transaction in the accounting records?

Ramierez Company received its first electric bill in the amount of $60 which will be paid next month. How will this transaction affect the accounting equation?

Match the following business types with each business listed below. Each may be used more than once. -A modular homebuilder

Assets that are used up during the process of earning revenue are called expenses.

The debt created by a business when it makes a purchase on account is referred to as an

Earning revenue

Cash dividends

Match the following business types with each business listed below. Each may be used more than once. -A book publisher