Exam 1: Introduction to Accounting and Business

The assets and liabilities of Rocky's Day Spa at December 31 and expenses for the year are listed below.The stockholders' equity was $68,000 ($48,000 in Common Stock and $20,000 in Retained Earnings)at January 1.The shareholders invested in an additional $10,000 of common stock during the year.Net income for the year is $45,625. ​ Prepare an income statement for Rocky's Day Spa for the current year ended December 31.

Which of the following is not a certification for accountants?

Ramos Repair Company is paying a cash dividend.How does this transaction affect Ramos Repair Company's accounting equation?

Indicate whether each of the following accounts represents an asset,liability,or stockholders' equity:

Which of the items below is not a business entity?

Paying an account payable increases liabilities and decreases assets.

On July 1 of the current year,the assets and liabilities of John Wong,DVM,are as follows: Cash,$27,000; Accounts Receivable,$12,300; Supplies,$3,100; Land,$35,000; Accounts Payable,$13,900.What is the amount of stockholders' equity as of July 1 of the current year?

Identify which of the following accounts would appear on a balance sheet.

The monetary unit assumption requires that economic data be recorded in dollars for companies in the United States.

As of the end of its accounting period,December 31,Year 1,Great Plains Company has assets of $940,000 and liabilities of $300,000.During Year 2,stockholders invested an additional $73,000 and received $33,000 in dividends from the business.What is the amount of net income during Year 2,assuming that as of December 31,Year 2,assets were $995,000 and liabilities were $270,000?

Which of the following is not a characteristic of a corporation?

An example of a general-purpose financial statement would be a report about projected price increases related to transportation costs.

What is the major difference between the objective of financial accounting and the objective of managerial accounting?

Accounting information users need reports about the economic activities and condition of businesses.

If total assets decreased by $30,000 during a specific period and stockholders' equity decreased by $35,000 during the same period,the period's change in total liabilities was a $65,000 increase.

If a shareholder wanted to know how money flowed into and out of the company,which financial statement would the shareholder use?

For accounting purposes,the business entity should be considered separate from its owners if the entity is

Which of the following items relates to separating the reporting of business and personal economic transactions?

The following data were taken from Miller Company's balance sheet: ​ Dec.31,Year 2 Dec.31,Year 1 Total liabilities $150,000 $105,000 Total stockholders' equity 75,000 60,000 ​ (a)Compute the ratio of liabilities to stockholders' equity.Round your answer to one decimal place. (​b)Has the creditors' risk increased or decreased from December 31,Year 1,to December 31,Year 2?

A retained earnings statement reports the changes in the retained earnings for a period of time.