Exam 1: Introduction to Financial Statements

In the annual report, where would a financial statement reader find out if the company's financial statements give a fair depiction of its financial position and operating results?

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

The retained earnings statement shows all of the following except:

The balance sheet reports assets and claims to those assets at a specific point in time.

Accounting communicates financial information about a business to both internal and external users.

Which of the following would not be considered an internal user of accounting data for the Xanadu Company?

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

Two primary external users of accounting information are investors and creditors.

The balance sheet

The financial statement that summarizes the changes in retained earnings for a specific period of time is the

Kilmer Corporation began 2022 with total stockholder's equity of $1,270,000, including retained earnings of $930,000.During the year, the company issued $1,260,000 of common stock, recorded expenses of $3,600,000, and paid dividends of $240,000.If Kilmer's ending retained earnings was $990,000, what was the company's revenue for 2022?

Corporate stockholders have no personal liability for the debts of the corporation.

Cash is another term for stockholders' equity.

Which type of corporate information is not available to investors?

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

The best definition of assets is the

If total liabilities increased by $90,000 and stockholders' equity increased by $30,000 during a period of time, then total assets must change by what amount and direction during that same period?

The majority of U.S.business is transacted by proprietorships.

The total liabilities of Hickory Construction Co.decreased by $90,000 during the month of August 2022.Stockholders' equity increased by $30,000 during this period.By what amount and in what direction must total assets have changed during August?

Claims of owners are called