Exam 1: Introduction to Financial Statements

Assets are resources owned by a business that provide future services or benefits to the business.

A corporation has which of the following set of characteristics?

The liability of corporate stockholders is limited to the amount of their investment.

Marvin Services Corporation had the following accounts and balances: Accounts payable \ 30,000 Equipment \ 35,000 Accounts receivable 5,000 Land 35,000 Buil dings ? Unearned service revenue 10,000 Cash 15,000 Total stockholders' equity ? If the balance of the Buildings account was $40000 and $10000 of Accounts Payable were paid in cash what would be the total liabilities and stockholders' equity?

Why are financial statement users interested in the statement of cash flows?

The best definition of assets is the

Proprietorships in the United States generate more revenue than the other two forms of business enterprise.

Which of the following statements concerning users of accounting information is incorrect?

Claims of creditors and owners on the assets of a business are called liabilities.

External users want answers to all of the following questions except

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

Claims of owners are called

Which of the following groups uses accounting information primarily to insure the entity is operating within prescribed rules?

Which type of corporate information is readily available to investors?

The cost of assets consumed or services used is also known as

Pinson Company began the year with retained earnings of $670000.During the year the company recorded revenues of $600000 expenses of $380000 and paid dividends of $140000.What was Pinson's retained earnings at the end of the year?

Borrowing money is an example of a(n)

If total liabilities increased by $69000 during a period of time and stockholders' equity decreased by $27000 during the same period then the amount and direction (increase or decrease) of the period's change in total assets is a(n)

Dr.Mark Veterinary Services recorded the following cash transactions for the year: Paid $154000 for salaries. Paid $85000 to purchase equipment. Paid $49000 for utilities supplies insurance and advertising. Paid $36000 for rent. Issued shares of stock for $60000 Paid $28000 in dividends. Collected $650000 from customers. Paid $3600 to purchase investments. What was the company's net cash provided (used) by operating activities?

Finney Company began the year by issuing $80000 of common stock for cash.The company recorded revenues of $740000 expenses of $640000 and paid dividends of $40000.What was Finney's net income for the year?