Exam 1: Accounting As a Form of Communication

Las Palmas Company reported the following items on its financial statements for the year ending December 31, 2016: ? Sales \ 560,000 Cost of goods sold \ 400,000 Salary expense 40,000 Interest expense 30,000 Dividends 30,000 Income tax expense 25,000 ? How much will be reported as retained earnings on Las Palmas' balance sheet at December 31, 2016, if this is the first year of operations?

An expense is an inflow of assets resulting from the sale of goods and services.

For each statement provided, choose the letter of the appropriate term from the list that each statement best describes.Some terms may be used more than once, while others are not used at all. -An artificial segment on the calendar used as a basis for preparing financial statements.

Domenico Enterprises purchased land for $2,000,000 in 1999.In 2016, an independent appraiser assessed the value at $4,400,000.What amount should appear on the financial statements in 2016 with respect to the land?

Which of the following statements best describes the term "revenues"?

Which one of the following is not an external user of financial information?

The income statement is a statement that summarizes revenues and expenses for a period.

Which financial statement would you analyze to determine if a company distributed any of its profits to its shareholders?

The beginning balance of retained earnings was $630,000, and the ending balance was $650,000.The company declared and paid dividends of $60,000. ​ A) Determine the amount of net income for the year. B) What information would one find on the income statement in addition to net income?

Which one of the following statements is true concerning assets?

The Trenton Corporation began 2016 with $390,000 in assets, $140,000 in liabilities, and $170,000 of retained earnings.Net income for the year was $120,000, and dividends of $110,000 were declared and paid. A) Frepare a statement of retained earnings for 2016 . B) What is the nature or purpose of the statement of retained earnings? C) What was the amount of capital stock for Trenton Corporation at the beginning of 2016 ? D) Identify what business events might occur in Trenton Corp.'s business operations that would cause the two stockholders' equity items to increase. E) How do you identify whether Trenton was profitable during 2016 by examining the statement of retained earnings?

Match the following business forms with their characteristics below. -Easy to raise large sums of money

Harbor City Corporation's end-of-year balance sheet consisted of the following amounts: ? Cash \ 15,000 Accounts receivable \ 50,000 Property, plant, and equipment 70,000 Long-term debt 40,000 Capital stock 100,000 Accounts payable 20,000 Retained earnings ? Inventory 35,000 ? What is Harbor City's retained earnings balance at the end of the current year?

If a company has $152,000 of revenues, declares and pays $55,000 in dividends, and has net income of $89,000, how much were expenses for the year?

Which one of the following items is correct concerning the time element of financial statements?

For each statement provided, choose the letter of the appropriate term from the list that each statement best describes.Some terms may be used more than once, while others are not used at all. -The portion of owner's equity that represents the net income less any dividends paid over the life of the entity.

Gyro's Shop reported a net loss of $15,000 and total expenses of $80,000.How much are total revenues?

An entity's liabilities come from three primary sources: creditors, investors, and profits retained in the business.

Assume that you have received copies of the financial statements for PepsiCo for the years ending December 31, 2016 and 2015.Answer the following questions: A) If you were a banker, why would you need information from PepsiCo's financial statements? B) If you were a potential investor in PepsiCo stock, what information would you want from their financial statements? C) If you were a labor negotiator for a union that represents a group of $\mathrm { PepsiC } \mathrm { Co }$ ' $\mathrm { s }$ employees, which financial statement would provide you with the most useful information?

___________________ means the presentation of information is free from bias toward a particular result.