Exam 1: Accounting As a Form of Communication

Sun City Corporation's end-of-year balance sheet consisted of the following amounts: Cash \ 25,000 Accounts receivable \ 70,000 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 amount should Sun City report on its balance sheet for total assets?

Owners' equity is the residual interest that remains after deducting liabilities from assets.

Marcos Inc.had net income for 2016 of $40,000.It declared and paid a $3,500 cash dividend in 2016.If the company's retained earnings for the end of the year were $38,200, what was the company's retained earnings balance at the beginning of 2016?

Aloha Company reports the following information at December 31, 2016: ? Revenue \ 150,000 Cash 30,000 Accounts payable 40,000 Dividends 10,000 Expenses 85,000 ? What is Aloha Company's net income?

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.Determine the following amounts for Canyon Corporation: A) Stockholders' equity at the end of 2016.             ------------------------- B) Retained earnings at the end of 2016 .             ------------------------- C) Name two events that might cause stockholders' equity to decrease.

Assets can be tangible or intangible in nature.

Match the following business forms with their characteristics below. -Owned by two or more individuals

Native Dave's Consultants had the following balance sheet amounts at the beginning of the year: Total assets \ 400,000 Total owner's equity 150,000 ? During the year, total assets increased by $100,000 and total liabilities increased by $40,000.The company also paid $30,000 in dividends.No other transactions occurred except revenues and expenses.How much is net income for the year?

Which one of the following is a correct expression of the accounting equation?

Bondholders are external users of company's accounting information.

Which one of the following items appears on a balance sheet?

Tavella Company is ready to sell its bonds.Which one of the following financial questions is most relevant to the issue of the bonds and that investors will most likely want answered before they purchase the bonds?

The going concern assumption infers that a company will continue to operate until a known date.

The International Accounting Standards Board (IASB) was created in order to develop worldwide accounting standards that must be used for all financial statements prepared regardless of country.

Which statement summarizes the income earned and the dividends paid?

Marcos 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 20,000 Income tax expense 25,000 ? How much will be reported as retained earnings on Marcos' balance sheet at December 31, 2016, if this is the first year of operations?

Why is the time period assumption required?

Which financial statement would you refer to in order to determine whether a company owed funds to creditors?

Presented below are selected data from the accounting records for Micco's Gift Store for 2016. Net sales \ 190,000 Income taxes 30,000 Cost of sales 80,000 Operating expenses 45,000 Dividends 12,000 ​ A) Calculate the net income or loss for 2016 . B) Explain how the amount frompart "A" will affect the financial position of Micco's Gift Store. C) Is the company profitable? Explain your answer.

The IASB is a branch of the FASB.