Exam 1: Introduction to Financial Statements

Lankston Company began the year by issuing $90,000 of common stock for cash. The company recorded revenues of $825,000, expenses of $720,000, and paid dividends of $45,000. What was Lankston's net income for the year?

Which of the following is the most appropriate and modern definition of accounting?

Notes to the financial statements include all of the following except

Payments to stockholders are called

The heading for the income statement might include the line "As of December 31, 20xx."

Creditors' rights to assets supersede owners' rights to the assets.

Compute the missing amount in each category of the accounting equation.

Identify which of the following accounts appear on a balance sheet. (a) Service revenue (b) Cash (c) Common stock (d) Accounts payable (e) Rent expense (f) Supplies (g) Land

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

The management discussion and analysis (MD&A) section of the annual report covers all of the following aspects except the

The information needed to determine whether a company is using accounting methods similar to those of its competitors would be found in the

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

Which of the following is the best definition of an internal user of accounting information?

An annual report includes all of the following except

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

The statement of cash flows for Nyland Corporation reveals the following information: Provide three comments about this information. Make your comments concise yet thorough.

John Tate is the bookkeeper for Gabelli Company. John has been trying to get the balance sheet of Gabelli Company to balance. It finally balanced, but now he's not sure it is correct. Instructions Prepare a correct balance sheet.

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?

Which of the following is not one of the three forms of business organization?

The primary purpose of the statement of cash flows is to report