Exam 1: Accounting As a Form of Communication

The costs of doing business through the sale of goods and services are called

Business entities and non-business entities are both organized to earn a profit.

Which one of the following is not one of the three activities included in the definition of accounting?

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

All of the following are the types of activities that businesses engage in except

Drew Mellow,owner of Mellow's Melodies,also owns a personal residence that costs $400,000.The market value of his residence is $600,000.During preparation of the financial statements for Mellow's Melodies,the accounting concept most relevant to the presentation of Drew's home is

Harbor City Corporation's end-of-year balance sheet consisted of the following amounts: Cash \1 5,000 Accounts receivable \5 0,000 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 Harbor City report on its balance sheet for total assets?

Which one of the following best describes the external auditor's report?

Good quality information should be both _____________ and present a __________________.

Mobile Power Corp.reported the following information for the year ended December 31,2017. Revenue \ 40,000 Expenses 23,000 Dividends 10,000 Retained earnings at December 31,2017 175,000 What was the retained earnings balance for Mobile Power at December 31,2016?

Presented below are condensed data from the financial statements of Gallo Factory for 2017 and 2016.The figures are expressed in thousands.Use this information to answer the questions that follow. Statement A 2017 2016 Total current assets \ 82,309 \ 80,080 Property, plant, and equipment (net of accumulated depreciation) 63,451 62,724 Investments 303 1,061 Other assets 3,438 2,606 Total assets \1 49,501 \1 46,471 Total current liabilities \ 33,928 \ 28,668 Long-term debt 20,491 25,676 Deferred income taxes and contingencies 4,174 5,208 Total liabilities \ 58,593 \ 59,552 Total stockholders' equity \ 90,908 \ 86,919 Total liabilities and stockhol ders' equity \ 149,501 \ 146,471 Statement B 2017 2016 Net sales \ 209,203 \ 174,206 Cost of sales 136,225 114,284 Gross profit \ 72,978 \ 59,922 Selling, general, and administrative expenses 63,895 53,520 Other income (expense) 693 (118) Income (loss) before income taxes \ 9,776 \ 6,284 Income tax expense \ 3,534 \ 3,388 Net income (loss) 6,242 \ 3,896 - Required: How much of Gallo Factory is financed by creditors at the end of December 2017? Evaluate the change from 2016 to 2017.

Presented below are selected data from the accounting records for Micco's Gift Store for 2017. ​ 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 2017 . B) Explain how the amount from part "A" will affect the financial position of Micco's Gift Store. C) Is the company profitable? Explain your answer.

The following items are available from the records of Ramos Corporation at the end of its fiscal year,June 30,2017: ​ ​ Accounts payable \ 17,000 Advertising expense 4,600 Accounts receivable 5,700 Notes payable 50,000 Buildings 35,000 Office equipment 12,000 Inventory 12,100 Retained earnings (end of year) 26,300 Capital stock 25,000 Sal ary and wage expense 8,230 Cash 21,900 Sales revenue 14,220 Computerized grinders 25,800 Hand tools 5,800 Required: (1)Prepare a balance sheet. (2)For each non-balance-sheet item,indicate where it should appear.

Which of the following statements is true?

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

Why is the time period assumption required?

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

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

Below are several accounts from Costello Company's accounting records.Answer the questions that follow. ​ Total liabilities, end of the year \ 92,000 Total assets, end of the year \1 43,000 Capital stock, end of the year 16,000 Retained earnings, beginning of the year 15,000 Dividends declared and paid for the period 20,000 Net income 40,000 A) How much is the balance of retained earnings at the end of the year? B) Show the accounting equation for Costello Company at the end of the year with the respective doll ar amounts. C) If stockholders' equity increases during the year, does that mean that the company is profitable? Explain your answer.

Presented below are condensed data from the financial statements of Gallo Factory for 2017 and 2016.The figures are expressed in thousands.Use this information to answer the questions that follow. Statement A 2017 2016 Total current assets \ 82,309 \ 80,080 Property, plant, and equipment (net of accumulated depreciation) 63,451 62,724 Investments 303 1,061 Other assets 3,438 2,606 Total assets \1 49,501 \1 46,471 Total current liabilities \ 33,928 \ 28,668 Long-term debt 20,491 25,676 Deferred income taxes and contingencies 4,174 5,208 Total liabilities \ 58,593 \ 59,552 Total stockholders' equity \ 90,908 \ 86,919 Total liabilities and stockhol ders' equity \ 149,501 \ 146,471 Statement B 2017 2016 Net sales \ 209,203 \ 174,206 Cost of sales 136,225 114,284 Gross profit \ 72,978 \ 59,922 Selling, general, and administrative expenses 63,895 53,520 Other income (expense) 693 (118) Income (loss) before income taxes \ 9,776 \ 6,284 Income tax expense \ 3,534 \ 3,388 Net income (loss) 6,242 \ 3,896 - Required: How much of Gallo Factory is financed by owners at the end of December 2017?