Question 1

Robertson Company paid $1,850 cash for rent expense. As a result of this business event:

Accepted Answer

A)  Total stockholders' equity decreased. 
B)  Liabilities decreased. 
C)  The net cash flow from operating activities decreased. 
D)  Both total stockholders' equity and net cash flow for operating activities decreased. 
A)  Total stockholders' equity decreased. 
B)  Liabilities decreased. 
C)  The net cash flow from operating activities decreased. 
D)  Both total stockholders' equity and net cash flow for operating activities decreased. D

Question 2

Stockholders' equity is a source of a business's assets, but liabilities are not.

Accepted Answer

A) True 
 B)False  False

Question 3

Which of the following would appear in the investing activities section of the statement of cash flows?

Accepted Answer

A)  Cash outflow for the purchase of supplies 
B)  Cash inflow from interest revenue 
C)  Cash inflow from issuance of common stock 
D)  Cash outflow for the purchase of land 
A)  Cash outflow for the purchase of supplies 
B)  Cash inflow from interest revenue 
C)  Cash inflow from issuance of common stock 
D)  Cash outflow for the purchase of land D

Question 4

Garrison Company acquired $23,000 by issuing common stock. Which of the following choices accurately reflects how this event affects the company's financial statements?

Accepted Answer

A)  Option A 
B)  Option B 
C)  Option C 
D)  Option D 
A)  Option A 
B)  Option B 
C)  Option C 
D)  Option D

Question 5

The year-end financial statements of Calloway Company contained the following elements and corresponding amounts: Assets = $50,000; Liabilities = ?; Common Stock = $15,000; Revenue = $22,000; Dividends = $1,500; Beginning Retained Earnings = $3,500; Ending Retained Earnings = $7,500. The amount of liabilities reported on the end-of-period balance sheet was:

Accepted Answer

A)  $27,500. 
B)  $31,500. 
C)  $35,000. 
D)  $42,500. 
A)  $27,500. 
B)  $31,500. 
C)  $35,000. 
D)  $42,500.

Question 6

Lexington Company engaged in the following transactions during Year 1, its first year of operations. (Assume all transactions are cash transactions.)1) Acquired $4,800 cash from issuing common stock.2) Borrowed $3,100 from a bank.3) Earned $4,000 of revenues.4) Incurred $2,580 in expenses.5) Paid dividends of $580.Lexington Company engaged in the following transactions during Year 2:1) Acquired an additional $1,400 cash from the issue of common stock.2) Repaid $1,930 of its debt to the bank.3) Earned revenues, $5,400.4) Incurred expenses of $3,110.5) Paid dividends of $1,720. Total liabilities on Lexington's balance sheet at the end of Year 1 equal:

Accepted Answer

A)  $1,400. 
B)  $1,140. 
C)  $3,100. 
D)  ($1,930). 
A)  $1,400. 
B)  $1,140. 
C)  $3,100. 
D)  ($1,930).

Question 7

An asset source transaction increases a business's assets and the claims to assets.

Accepted Answer

A) True 
 B)False

Question 8

If Ballard Company reported assets of $500 and liabilities of $200, Ballard's stockholders' equity equals:

Accepted Answer

A)  $300. 
B)  $500. 
C)  $700. 
D)  Cannot be determined. 
A)  $300. 
B)  $500. 
C)  $700. 
D)  Cannot be determined.

Question 9

Which of the following could represent the effects of an asset exchange transaction on a company's financial statements?

Accepted Answer

A)  Option A 
B)  Option B 
C)  Option C 
D)  Option D 
A)  Option A 
B)  Option B 
C)  Option C 
D)  Option D

Question 10

Glavine Company repaid a bank loan with cash. How should the cash flow from this event be shown on the horizontal financial statements model?

Accepted Answer

A)  As an operating activity that decreases cash, decreases stockholders' equity, and decreases net income. 
B)  As a financing activity that decreases cash and decreases liabilities. 
C)  As a financing activity that decreases cash, decreases stockholders' equity, and decreases net income. 
D)  As an investing activity that decreases cash and decreases liabilities. 
A)  As an operating activity that decreases cash, decreases stockholders' equity, and decreases net income. 
B)  As a financing activity that decreases cash and decreases liabilities. 
C)  As a financing activity that decreases cash, decreases stockholders' equity, and decreases net income. 
D)  As an investing activity that decreases cash and decreases liabilities.

Question 11

Fieldstone Company was founded on January 1, Year 1. During Year 1, the company experienced the following events:
Received cash revenue of $25,500Paid cash expenses of $20,000Issued common stock for $30,000 cashPaid cash dividend of $2,000 to stockholders.
Required: Write an accounting equation and record effects of each accounting event under appropriate general ledger account headings, showing dollar amounts of increases and decreases and totals at the end of the year. Enter 0 for items not affected.Prepare the Year 1 income statement and balance sheet for Fieldstone Company.

Accepted Answer

The accounting equation is Assets = Liab

Question 12

Jackson Company had a net increase in cash from operating activities of $11,400 and a net decrease in cash from financing activities of $4,000. If the beginning and ending cash balances for the company were $5,000 and $10,600, respectively, what is the net cash change from investing activities?

Accepted Answer

A)  An outflow or decrease of $1,800. 
B)  An inflow or increase of $4,000. 
C)  An inflow or increase of $1,800. 
D)  Zero. 
A)  An outflow or decrease of $1,800. 
B)  An inflow or increase of $4,000. 
C)  An inflow or increase of $1,800. 
D)  Zero.

Question 13

An asset use transaction does not affect the total amount of claims to a company's assets.

Accepted Answer

A) True 
 B)False

Question 14

During Year 2, Chico Company earned $3,500 of cash revenue, paid $1,450 of cash expenses, and paid a $950 cash dividend to its stockholders. Based on this information alone, which of the following statements is not true?

Accepted Answer

A)  Net income amounted to $2,050. 
B)  Total assets increased by $1,100. 
C)  Cash inflow from operating activities was $2,050. 
D)  Cash outflow from financing activities was $1,100. 
A)  Net income amounted to $2,050. 
B)  Total assets increased by $1,100. 
C)  Cash inflow from operating activities was $2,050. 
D)  Cash outflow from financing activities was $1,100.

Question 15

Ellen Gatsby and her siblings, Ben and Sarah, started Gatsby Company when they each invested $100,000 in the company. After the investments there will be

Accepted Answer

A)  One reporting entity 
B)  Two reporting entities 
C)  Three reporting entities 
D)  Four reporting entities 
A)  One reporting entity 
B)  Two reporting entities 
C)  Three reporting entities 
D)  Four reporting entities

Question 16

Liabilities represent the future obligations of a business entity.

Accepted Answer

A) True 
 B)False

Question 17

What is meant by the term "accounting period?"

Accepted Answer

An accounting period is the sp

Question 18

Indicate how this event affects the accounting equation. Use the following letters to record your answer in the box shown below each element. If an event increases one account and decreases another account within the same element, record I/D. If an event has no impact on the element, record NA. You do not need to enter amounts.Increase = I Decrease = D Not Affected = NABell Company provided consulting services for $20,000 cash.

Accepted Answer

@#IMG-DLM&
This is an asset source transaction tha

Question 19

Jack Henry borrowed $800,000 from Walt Bank to open a new bike store called Wooden Wheels. Jack transferred $650,000 of the cash he borrowed to Wooden Wheels on the first day of the year. Which of the following appropriately reflects the cash transactions between these reporting entities? $\begin{array}{cccc}
  \text {  option } &  \text {Jack Henry  } &\quad\text { wooden wheels  } &  \text { walt bank }\
\end{array}$

A.
$\begin{array}{ccc}
  &\quad\quad\quad\$ 150,000 \text { increase }  &\$ 650,000&\quad\quad\$800,000\
&& \text { increase } &\quad\quad \text { decrease }\
\end{array}$

B.
$\begin{array}{ccc}
  &\quad\quad\quad\text { \$ 800, 000 increase } & \text { \$ } 650,000 & \$150,000 \
&& \text { increase } & \text { decrease } \
\end{array}$

C.
$\begin{array}{ccc}
  &\quad\quad\quad\text { \$ } 800,000 \text { decrease } & \$ 800,000 & \$ 650,000 \
&& \text { increase } & \text { decreas } \
\end{array}$

D.
$\begin{array}{ccc}
  &\quad\quad\quad\text { \$ 650,000 increase } & \$ 150,000 & \$ 800,000\
&& \text { increase } & \text { decreas } 
\end{array}$

Accepted Answer

A)  Option A 
B)  Option B 
C)  Option C 
D)  Option D 
A)  Option A 
B)  Option B 
C)  Option C 
D)  Option D

Question 20

What does a company's statement of cash flows tell you about the company?

Accepted Answer

The statement of cash flows te

Robertson Company paid $1,850 cash for rent expense. As a result of this business event:

Stockholders' equity is a source of a business's assets, but liabilities are not.

Which of the following would appear in the investing activities section of the statement of cash flows?

Garrison Company acquired $23,000 by issuing common stock. Which of the following choices accurately reflects how this event affects the company's financial statements?

An asset source transaction increases a business's assets and the claims to assets.

If Ballard Company reported assets of $500 and liabilities of $200, Ballard's stockholders' equity equals:

Which of the following could represent the effects of an asset exchange transaction on a company's financial statements?

Glavine Company repaid a bank loan with cash. How should the cash flow from this event be shown on the horizontal financial statements model?

Jackson Company had a net increase in cash from operating activities of $11,400 and a net decrease in cash from financing activities of $4,000. If the beginning and ending cash balances for the company were $5,000 and $10,600, respectively, what is the net cash change from investing activities?

An asset use transaction does not affect the total amount of claims to a company's assets.

During Year 2, Chico Company earned $3,500 of cash revenue, paid $1,450 of cash expenses, and paid a $950 cash dividend to its stockholders. Based on this information alone, which of the following statements is not true?

Ellen Gatsby and her siblings, Ben and Sarah, started Gatsby Company when they each invested $100,000 in the company. After the investments there will be

Liabilities represent the future obligations of a business entity.

What is meant by the term "accounting period?"

What does a company's statement of cash flows tell you about the company?

Accounting for Accruals and Deferrals

Accounting for Merchandising Businesses

Internal Controls, Accounting for Cash, and Ethics

Accounting for Receivables and Inventory Cost Flow

Accounting for Long-Term Operational Assets

Accounting for Liabilities

Proprietorships, Partnerships, and Corporations

Financial Statement Analysis

An Introduction to Management Accounting

Cost Behavior, Operating Leverage, and Profitability Analysis

Cost Accumulation, Tracing, and Allocation

Relevant Information for Special Decisions

Planning for Profit and Cost Control

Performance Evaluation

Planning for Capital Investments

Filters

Exam 1: An Introduction to Accounting

Robertson Company paid $1,850 cash for rent expense. As a result of this business event:

Stockholders' equity is a source of a business's assets, but liabilities are not.

Which of the following would appear in the investing activities section of the statement of cash flows?

Garrison Company acquired $23,000 by issuing common stock. Which of the following choices accurately reflects how this event affects the company's financial statements?

An asset source transaction increases a business's assets and the claims to assets.

If Ballard Company reported assets of $500 and liabilities of $200, Ballard's stockholders' equity equals:

Which of the following could represent the effects of an asset exchange transaction on a company's financial statements?

Glavine Company repaid a bank loan with cash. How should the cash flow from this event be shown on the horizontal financial statements model?

Jackson Company had a net increase in cash from operating activities of $11,400 and a net decrease in cash from financing activities of $4,000. If the beginning and ending cash balances for the company were $5,000 and $10,600, respectively, what is the net cash change from investing activities?

An asset use transaction does not affect the total amount of claims to a company's assets.

During Year 2, Chico Company earned $3,500 of cash revenue, paid $1,450 of cash expenses, and paid a $950 cash dividend to its stockholders. Based on this information alone, which of the following statements is not true?

Ellen Gatsby and her siblings, Ben and Sarah, started Gatsby Company when they each invested $100,000 in the company. After the investments there will be

Liabilities represent the future obligations of a business entity.

What is meant by the term "accounting period?"

What does a company's statement of cash flows tell you about the company?

Accounting for Accruals and Deferrals

Accounting for Merchandising Businesses

Internal Controls, Accounting for Cash, and Ethics

Accounting for Receivables and Inventory Cost Flow

Accounting for Long-Term Operational Assets

Accounting for Liabilities

Proprietorships, Partnerships, and Corporations

Financial Statement Analysis

An Introduction to Management Accounting

Cost Behavior, Operating Leverage, and Profitability Analysis

Cost Accumulation, Tracing, and Allocation

Relevant Information for Special Decisions

Planning for Profit and Cost Control

Performance Evaluation

Planning for Capital Investments

Filters