Exam 1: An Introduction to Accounting

Financial accounting standards are known collectively as GAAP.What does that acronym stand for?

Which financial statement matches asset increases from operating a business with asset decreases from operating the business?

Indicate how each event affects the elements of financial statements.Use the following letters to record your answer in the box shown below each element.You do not need to enter amounts. -Bell Co.provided consulting services for $20,000 cash.

At the time of liquidation,Fairchild Company reported assets of $200,000,liabilities of $120,000,common stock of $90,000 and retained earnings of ($10,000).What amount of Fairchild's assets are the shareholders entitled to receive?

Young Company reported the following balance sheet for the end of 2015: During 2016,Young reported the following transactions: $\bullet$ Repaid $9,000 to a local bank on a note payable $\bullet$ Provided services to clients for $27,400 cash $\bullet$ Paid operating expenses of $20,200 $\bullet$ Paid $4,500 cash dividends to stockholders Required: Prepare Young Company's balance sheet as of December 31,2016.

The following events are for Holiday Travel Services for the year 2016,the first year of operations.Assume that all transactions involve the receipt or payment of cash. 1)The business acquired $50,000 from stock issued to owners. 2)Creditors loaned the company $27,500. 3)The company provided services to its customers and received $75,400. 4)The company paid expenses amounting to $63,250. 5)The company purchased land for $25,000. 6)The company paid a dividend of $5,500 to its owners. Required: a)Show the effects of the above transactions on the accounting equation (use appropriate element and account headings).For those events that affect retained earnings,indicate in a separate column the appropriate temporary account.Precede the amount with a minus sign if the transaction reduces that section of the equation.Enter 0 for items not affected. b)Prepare an income statement and balance sheet for the year 2016.Precede the amount with a minus sign if the transaction reduces that section of the income statement.

Indicate how each event affects the elements of financial statements.Use the following letters to record your answer in the box shown below each element.You do not need to enter amounts. -North Co.issued a note to purchase a building.

Use the following information to answer questions The year-end financial statements of Calloway Company contained the following elements and corresponding amounts: Assets = $50,000;Liabilities = ?;Common Stock = $15,000;Revenue = $22,000;Dividends = $1,500;Beginning Retained Earnings = $3,500;Ending Retained Earnings = $7,500. -Based on this information,the amount of expenses on Calloway's income statement was

Which of the following could represent the effects of an asset source transaction on a company's financial statements?

The four financial statements prepared by a business bear no relationship to each other.

What does a company's statement of cash flows tell you about the company?

Dividends paid by a company are shown on the

Fill in the blanks indicated by the alphabetic letters in the following financial statements.These financial statements were prepared for the company's first year in operation,and all transactions were for cash.

Equity is a source of a business's assets,but liabilities are not.

Zimmerman Company sold land for $25,000 cash.The original cost of the land was $25,000.Select the answer that indicates how this event affects the company's financial statements.

Which of the following items appears in the investing activities section of the statement of cash flows?

Jessup Company was founded in 2015.It acquired $45,000 cash by issuing stock to investors and an additional $15,000 cash by borrowing from creditors.During 2015 it received $25,000 cash revenues and paid $32,000 in cash expenses.The company then went out of business. Required: a)Explain the term,"business liquidation." b)What amount of cash should Jessup Company have had on hand immediately before going out of business? c)What amount of cash will Jessup's creditors receive? d)What amount of cash will Jessup's stockholders receive?

As of December 31,2015,Mason Company had $500 cash.During 2016,Mason earned $1,200 of cash revenue and paid $800 of cash expenses.The amount of cash shown on the 2016 balance sheet would be

Which of the following is not an element of the financial statements?

Use the following information to answer questions Yowell Company began operations on January 1,2016.During 2016,the company engaged in the following cash transactions: 1)issued stock for $40,000 2)borrowed $25,000 from its bank 3)provided consulting services for $39,000 4)paid back $15,000 of the bank loan 5)paid rent expense for $9,000 6)purchased equipment costing $12,000 7)paid $3,000 dividends to stockholders 8)paid employees' salaries,$21,000 -What is Yowell's ending notes payable balance?