Exam 1: Introduction to Financial Statements

A local retail shop has been operating as a sole proprietorship. The business is growing and now the owner wants to incorporate. Which of the following is not a reason for this owner to incorporate?

The partnership form of business organization

The management discussion and analysis (MD & A) section of an annual report covers various financial aspects of a company.

The retained earnings statement shows all of the following except

An income statement shows

Cesar Ruiz was reviewing his company's activities at the end of the year (2014) and decided to prepare a retained earnings statement. At the beginning of the year his assets were $530,000, liabilities were $140,000, and common stock was $120,000. The net income for the year was $250,000. Dividends of $220,000 were paid during the year. Prepare a retained earnings statement in good form.

The conceptual framework that underlines IFRS

Which of the following is an advantage of corporations relative to partnerships and sole proprietorships?

Which activities involve acquiring the resources to run the business?

If total liabilities increased by $46,000 during a period of time and stockholders' equity decreased by $18,000 during the same period, then the amount and direction (increase or decrease) of the period's change in total assets is a(n)

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

Management of a business enterprise is the major external user of information.

This information relates to Connor Co. for the year 2014. Instructions After analyzing the data, prepare an income statement and a retained earnings statement for the year ending December 31, 2014.

Pinson Company began the year with retained earnings of $570,000. During the year, the company recorded revenues of $600,000, expenses of $380,000, and paid dividends of $140,000. What was Pinson's retained earnings at the end of the year?

Which of the following groups uses accounting information to determine whether a marketing proposal will be cost effective?

Which type of corporate information is readily available to investors?

Ending retained earnings for a period is equal to beginning

Explanatory notes and supporting schedules are an optional part of an annual report.

Which of the following is an asset?

Marvin Services Corporation had the following accounts and balances: If the balance of the Buildings account was $51,000, what would be the total of liabilities and stockholders' equity?