Exam 1: Accounting As a Form of Communication

Profits from operating activities distributed to business owners are called bonuses.

Provided below is a list of important users of accounting information.Below the list are descriptions of a major need of each of the various users.Fill in the blank with the one user group that is most likely to have the need described to the right of the blank.Some user groups may be used more than once or not at all. -The profitability of the company based upon the Internal Revenue Code.

The following information is provided by the Ferrara Corporation: Beginning retained earnings \ 50,000 Ending retained earnings 70,000 Dividends declared and paid 10,000 Revenue 50,000 What is the net income for Ferrara Corp.?

How is the balance sheet linked to the other financial statements?

All of the following are examples of manufacturers except:

Match the following business forms with their characteristics below. -Usually owned and operated by the same person

Avery Corporation began the year with total assets of $800,000 and total liabilities of $620,000.Use the accounting equation to answer the following questions.Assume no additional investment by owners when answering these questions. A) What was the amount of Avery's total assets at the end of the year if liabilities decreased by $\$ 60,000$ and owners' equity increased by $\$ 90,000$ ? B) Was the company profitable? Expl ain your answer.

_____________ is the type of accounting used by external parties.

Several items from the financial statements of Standard Tires are listed below.Use the following answer choices to identify the type of account for each item listed.Place your answers in the space provided. -Interest income

The income statement is sometimes called the statement of profit and loss.

The names of the four financial statements are ________________________________, ________________________________, ________________________________, and ________________________________

The accountant for Taryn Corporation prepared the following list of account balances from the company's records for the year ended December 31, 2016: ​ Sales revenue \ 165,000 Cash \ 30,000 Accounts receivable 14,000 Selling expenses 44,000 Equipment 42,000 Common stock 41,000 Accounts payable 12,000 Interest income 3,000 Salaries and wages expense 40,000 Cost of sales 51,000 Inventories 22,000 Prepaid expenses 2,000 Income taxes payable 5,000 Income taxes expense 18,000 Notes payable 20,000 Retained earnings ? ​ ​ -Read the information for Taryn Corporation.Determine the following amounts for Taryn Corporation. A) The balance of retained earnings at the end of 2016 .             ------------------------- B) The total stockholders' equity at the end of 2016 .                  ------------------------- C) Name the two events that might cause stockholders' equity to increase.

The concept that assumes that assets are recorded at the amount to acquire them is called the _________________________.

According to the accounting profession, the purpose of financial reporting is to provide information about a company that investors, lenders, and other creditors can use when deciding whether to provide resources to the entity.

The accountant for Taryn Corporation prepared the following list of account balances from the company's records for the year ended December 31, 2016: ​ Sales revenue \ 165,000 Cash \ 30,000 Accounts receivable 14,000 Selling expenses 44,000 Equipment 42,000 Common stock 41,000 Accounts payable 12,000 Interest income 3,000 Salaries and wages expense 40,000 Cost of sales 51,000 Inventories 22,000 Prepaid expenses 2,000 Income taxes payable 5,000 Income taxes expense 18,000 Notes payable 20,000 Retained earnings ? ​ ​ -Read the information for Taryn Corporation.Determine the following amounts for Taryn Corporation: A) Total revenues for 2016.             ------------------------- B) Total expenses for 2016.             ------------------------- C) What is the purpose of the income statement? D) Is Taryn Corp. profitable? Explain your answer. E) Is this the first year of operations for Taryn Corp.? Explain your answer.

Three organizations important to accounting are listed below.Select the organization that most closely achieves the role described. -Primarily responsible for setting accounting standards today.

Several items from the financial statements of Standard Tires are listed below.Use the following answer choices to identify the type of account for each item listed.Place your answers in the space provided. -Inventories

Provided below is a list of important users of accounting information.Below the list are descriptions of a major need of each of the various users.Fill in the blank with the one user group that is most likely to have the need described to the right of the blank.Some user groups may be used more than once or not at all. -The prospects for future dividend payments.

Mobile Power Corp.reported the following information for the year ended December 31, 2016. Revenue \ 40,000 Expenses 23,000 Dividends 10,000 Retained earnings at December 31,2016 175,000 ? What was the retained earnings balance for Mobile Power at December 31, 2015?

Canyon Corporation The accountant for the Canyon Corporation prepared the following list from the company's accounting records for the year ended December 31, 2016: Retained earnings ? Prepaid expenses \ 3,000 Cash \ 7,000 Common stock 40,000 Accounts payable 15,000 Accounts receivable 17,000 Sales revenue 125,000 Interest income 500 Cost of sales 70,000 Salary expense 4,000 Land 75,000 Income tax expense 200 Notes payable 15,000 Selling expense 45,000 Inventory 20,000 Salaries payable 5,000 ​ ​ -Read the information for Canyon Corporation.Using good form, prepare a Balance Sheet for the Canyon Corporation.