Exam 16: Basic Accounting Concepts, Techniques, and Conventions

A company had the following information: Beginning retained earnings \ 45,000 Sales \ 194,000 Depreciation expense 7,000 C ash 11,000 Cost of goods sold 102,000 Dividends 15,000 Paid-in capital 26,000 W age expense 40,000 Rent expens e 12,000 Prep aid rent 2,000 The ending balance in the Retained Earnings account is:

Given below is a list of events: 1. payment of employee wages 2) cash collections from customers 3) sale of capital stock 4) sale of land, at cost 5) payment of a cash dividend 6) borrow cash from creditors 7) purchase of equipment 8) cash sale of inventory 9) purchase inventory on account Which of the above events are inflows in the financing section of the statement of cash flows?

The statement of cash flows shows the status of an entity at a point in time.

Converting assets to cash and using the cash to pay off outside claims

A company receives cash before delivering the related goods or services

Allocating the original cost of plant and equipment

Referring to Tables 16- 1 and 16- 2, the cash paid for supplies by Silver Company in 20X6 was:

The cash paid for taxes is included in the section of the statement of cash flows.

The balances in selected accounts of Rerun Company increased (decreased) as follows: Accounts payable \ 10,000 Bonds payable (12,000) Common stock 4,000 Rerun Company declared and paid dividends of $8,800. The cash flow from financing for Rerun Company was:

Referring to Tables 16- 1 and 16- 2, the cash paid to suppliers by Silver Company in 20X6 was:

Which of the following could be used as account titles to refer to the owners paying more than the par value for a company's common stock? 1. paid- in capital 2) additional paid- in capital 3) capital in excess of par value of stock 4) capital surplus

This reduces gross accounts receivable due to some customers not paying

When revenues and expenses on the statement to tax authorities differ from the revenues and expenses on the shareholders' report

Hollander Company gave a long- term note payable in the amount of $285,000 to acquire a new piece of equipment. This transaction will be reported on the statement of cash flows as a:

The excess of the cost of an acquired company over the sum of the fair market values of its identifiable assets less its liabilities

Which of the following would be considered a tangible asset? 1. leasehold improvements 2) goodwill 3) land 4) mineral deposits 5) patent

Convertibility allows a bondholder to exchange:

A financial statement that explains changes in the retained earnings for a given period

Land is never depreciated.

The direct method begins with accrual net income.