Exam 1: Introduction to Financial Statements

If the assets owned by a business total $100,000 and liabilities total $52,000, shareholders' equity totals $48,000.

Revenues are increases in economic resources that result from a business's operating activities.

Financing activities for corporations include borrowing money and selling shares.

High standards of ethics are not required for preparers of financial information.

Use the following information for questions Kareem's Rental Ltd.started the year with total assets of $70,000 and total liabilities of $40,000.During the year, the business recorded $100,000 in car repair revenues, $65,000 in expenses, and paid dividends of $5,000. -The profit reported for the year was

Liabilities:

A proprietor has unlimited liability.

Depreciation is the cost of certain long-lived assets allocated to expense for each period.

A business organized as a separate legal entity is a

Shareholders' equity is always equal to the cash on hand at any given date.

The statement of changes in equity is not dependent on the results from the income statement.

Which of the following groups uses accounting information primarily to ensure the company is operating within prescribed rules?

Which of the following financial statements is concerned with the company at a point in time?

Resources owned by a corporation are referred to as

A proprietorship is usually operated by the owner.

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

The statement of financial position is always the first statement prepared and presented.

The statement of financial position and statement of changes in equity are related because

Economic resources that are owned by a business are called shareholders' equity.

Profit results when