Exam 15: Basic Accounting: Concepts, techniques, and Conventions

A corporation is not a separate legal entity from its owners.

Gross profit is the excess of sales over all expenses.

Foward Company had the following data available: Net income for the year ending December 31,2015 \ 50,000 Dividends declared during 2015 \4 7,000 Dividends paid during 2015 \3 2,000 Paid-in capital, January 1, 2015 \4 5,000 Retained earnings, January 1, 2015 \ 59,000 Required: Prepare a statement of retained earnings for Forward Company for the year ended December 31,2015.

The activity of Vegas Company for the month of April is given below: Cash purchases of inventory \4 5,000 Credit purchases of inventory \ 50,000 Cash payment for credit purchases of inventory \ 12,000 Cash dividend paid \7 ,000 Wages earned and paid \ 12,000 Wages earned and unpaid \2 ,000 Rent paid for April, May and June \ 9,000 Using the cash basis of accounting,the total expenses for Vegas Company for the month of April are ________.

Companies must record research and development costs as expenses immediately.

Economic resources that a company owns and expects to provide future benefits are called ________.

The adjusting entry that recognizes revenue earned on deferred revenues results in a(n)________.

Any event that affects the financial position of an organization and requires recording is called a(n)________.

Uptown Company purchases $4,000 of inventory on account.Uptown Company should debit ________.

Yesterday Company's accountant recorded a debit to Accounts Payable and a credit to Cash.This transaction will ________.

The accounting convention of ________ means selecting the method of measurement that provides the most pessimistic immediate results.

On April 1,2012,Company X lends $200,000 to Company Y on a 8% note.On April 1,2012,which of the following accounts of Company X will be affected by this transaction?

For nonprofit organizations,the stockholders' equity section of the balance sheet is replaced with ________.

Arizona Company has the following information available for the month of April: Sales \1 00,000 Cost of goods sold \ 60,000 Interest expense \ 2,000 Income taxexpense \ 1,000 Wages expense \ 12,000 Dividends declared \ 3,000 Equipment purchased \ 20,000 Rent expense \ 4,000 The company uses the accrual basis of accounting.What is the net income for the month of April?

Information is relevant if it has ________ and ________.

The main qualities of accounting information that make accounting information useful for decision making are ________ and ________.

Dividends reduce stockholders' equity when paid.

A sole proprietorship is a business organized as a separate legal entity and owned by its stockholders.

The Monk Company reports the following accounts and balances on December 31,2015. Accounts Payable \ 14,400 Accounts Receivable 8,000 Cash 26,000 Equipment 80,000 Land 56,000 Long-term Note Payable 70,000 Merchandise Inventory 28,000 Paid-in Capital ? Retained Earnings 14,400 Required: Prepare a balance sheet at December 31,2015.

What do liabilities and stockholders' equity have in common?