Exam 1: Introduction to Accounting and Business

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

The following data were taken from Harrison Company's balance sheet: Dec. 31,2012 Dec. 31, 2011 Total liabilities \ 150,000 \ 105,000 Total stockholders' equity 75,000 60,000 a.Compute the ratio of liabilities to stockholders' equity. b.Has the creditors' risk increased or decreased from December 31,2011,to December 31,2012?

Which of the following would not normally operate as a service business?

Which of the following are guidelines for behaving ethically?

The rights or claims to the assets of a business may be subdivided into rights of creditors and rights of owners.

An income statement is a summary of the revenues and expenses of a business as of a specific date.

Goods purchased on account for future use in the business,such as supplies,are called

Four financial statements are usually prepared for a business.The statement of cash flows is usually prepared last.The retained earnings statement (RE),the balance sheet (B),and the income statement (I)are prepared in a certain order to obtain information needed for the next statement.In what order are these three statements prepared?

How does the purchase of equipment by signing a note affect the accounting equation?

Gomez Service Company paid its first installment on a note payable for an amount of $2,000.How will this transaction affect the accounting equation?

Managerial accountants would be responsible for providing which of the following?

The debt created by a business when it makes a purchase on account is referred to as an

Net income and net profit do not mean the same thing.

Which of the following is not an asset?

The accountant for Franklin Company prepared the following list of account balances from the company's records for the year ended December 31,2011: FeesEarned \ 165,000 Cash \ 30,000 Accounts Receivable 14,000 Selling Expenses 44,000 Equipment 64,000 Capital Stock 7,000 Accounts Payable 22,000 Retained Earnings 23,000 Salaries \& Wages Expense 40,000 Prepaid Rent 2,000 Dividends 5,000 Income Taxes Expense 13,000 Salaries \& Wages Payable 15,000 Rent Expense 20,000 Determine the total assets at the end of 2011 for Franklin Company.

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

Indicate whether each of the following activities would be reported on the statement of cash flows as an operating activity,an investing activity,a financing activity,or not at all.

The assets and liabilities of S&P Day Spa at December 31,2014 and expenses for the year are listed below.The retained earnings balance was $68,000 at January 1,2014.Net income for 2014 is $45,625. Accounts Payable \ 4,375 Spa Operating Expense \ 23,760 Accounts Receivable \ 8,490 Office Expense \ 2,470 Cash \ 13,980 SpaSupplies \ 9,230 Fees Earned ??? Wages Expense \ 26,580 Spa Furniture \& Equipment \ 56,000 Dividends \ 38,170 Computers \ 2,130 Capita1 Stock \ 10,000 Prepare an income statement for the current year ended December 31,2014.

Debts owed by a business are referred to as

Which of the following concepts relate to separating the reporting of business and personal economic transactions?