Exam 1: An Introduction to Accounting

The Heritage Company is a manufacturer of office furniture. Which term best describes Heritage's role in society?

Yowell Company began operations on January 1, Year 1. During Year 1, the company engaged in the following cash transactions: 1) issued stock for $76,0002) borrowed $43,000 from its bank3) provided consulting services for $75,000 cash4) paid back $33,000 of the bank loan5) paid rent expense for $18,0006) purchased equipment for $30,000 cash7) paid $4,800 dividends to stockholders8) paid employees' salaries of $39,000 What is Yowell's net income for Year 1?

Which term describes assets generated through operations that have been reinvested into the business?

Which of the following statements about liabilities is true?

Which of the following is (are) source(s) of assets to a business?

Indicate whether each of the following statements about financial statements is true or false.A cash dividend paid to stockholders is shown in the investing activities section of the statement of cash flows.A cash dividend paid to stockholders is shown on the statement of changes in stockholders' equity.A cash dividend paid to stockholders is shown on the income statement.The balance sheet shows ending balances of permanent accounts as of the last day of the accounting period.Changes in retained earnings for the accounting period are shown on the income statement.

Lexington Company engaged in the following transactions during Year 1, its first year of operations. (Assume all transactions are cash transactions.)Acquired $6,000 cash from issuing common stock.Borrowed $4,400 from a bank.Earned $6,200 of revenues.Incurred $4,800 in expenses.Paid dividends of $800.Lexington Company engaged in the following transactions during Year 2:Acquired an additional $1,000 cash from the issue of common stock.Repaid $2,600 of its debt to the bank.Earned revenues, $9,000.Incurred expenses of $5,500.Paid dividends of $1,280.Total liabilities on Lexington's balance sheet at the end of Year 1 equal:

Dividends paid by a company are shown on the:

Finn Company reported assets of $1,000 and stockholders' equity of $600. What amount will Finn report for liabilities?

During Year 1, Moersch Company issued common stock to stockholders for $10,000; purchased land for $2,000 cash; provided services to customers for $8,000; paid cash operating expenses of $6,200; and paid cash dividends of $1,000 to the company's stockholders. Enter each of these events into the horizontal financial statements model, below. Indicate dollar amounts of increases and decreases. For cash flows, show whether they are operating activities (OA), investing activities (IA), or financing activities (FA). Enter 0 if there would be no entry in a column.

Kelly Company experienced the following events during its first accounting period. (1) Issued common stock for $10,000 cash. (2) Earned $8,000 of cash revenue. (3) Paid $1,000 cash to purchase land. (4) Paid cash dividends amounting to $500. (5) Paid $4,400 of cash expenses. Based on this information, what is the amount of net income?

Packard Company engaged in the following transactions during Year 1, its first year of operations. (Assume all transactions are cash transactions.)1) Acquired $1,250 cash from the issue of common stock.2) Borrowed $720 from a bank.3) Earned $900 of revenues cash.4) Paid expenses of $310.5) Paid a $110 dividend.During Year 2, Packard engaged in the following transactions. (Assume all transactions are cash transactions.)1) Issued an additional $625 of common stock.2) Repaid $430 of its debt to the bank.3) Earned revenues of $1,050 cash.4) Incurred expenses of $480.5) Paid dividends of $160.What was the amount of total stockholders' equity on Packard's balance sheet at the end of Year 1?

What is the name of the group that has the primary authority for establishing U.S. GAAP?

International accounting standards are formulated by the IASB. What does that acronym stand for?

Dividends are reported on which financial statement?

Hazeltine Company issued common stock for $200,000 cash. As a result of this event, which of the following statements is true?

Packard Company engaged in the following transactions during Year 1, its first year of operations. (Assume all transactions are cash transactions.)1) Acquired $1,700 cash from the issue of common stock.2) Borrowed $1,170 from a bank.3) Earned $1,350 of revenues cash.4) Paid expenses of $400.5) Paid a $200 dividend.During Year 2, Packard engaged in the following transactions. (Assume all transactions are cash transactions.)1) Issued an additional $1,075 of common stock.2) Repaid $745 of its debt to the bank.3) Earned revenues of $1,500 cash.4) Incurred expenses of $660.5) Paid dividends of $250.What is the amount of retained earnings that will be reported on Packard's Year 2 balance sheet?

Which of the following is not an asset use transaction?

The stockholders of a business have a priority claim to its assets in the event of liquidation.

Packard Company engaged in the following transactions during Year 1, its first year of operations. (Assume all transactions are cash transactions.) 1) Acquired $1,850 cash from the issue of common stock.2) Borrowed $1,320 from a bank.3) Earned $1,500 of revenues cash.4) Paid expenses of $430.5) Paid a $230 dividend.During Year 2, Packard engaged in the following transactions. (Assume all transactions are cash transactions.)1) Issued an additional $1,225 of common stock.2) Repaid $850 of its debt to the bank.3) Earned revenues of $1,650 cash.4) Incurred expenses of $720.5) Paid dividends of $280.What is the amount of Packard Company's net cash flow from financing activities for Year 2?