Question 1

Revenues decrease stockholders' equity.

Accepted Answer

A) True 
 B)False  False

Question 2

Exhibit 2-1 $\begin{array}{lll}
\text { Total Linbilities } & \text { Total Assets } & \
\$ 60,000 & \$ 100,000 & \text { Begiming of the year } \
\$ 325,000 & \$ 500,000 & \text { End of the year }
\end{array}$ Refer to Exhibit 2-1. What is net income, assuming $50,000 of stock was issued and $25,000 of dividends were paid?

Accepted Answer

A)  $110,000 
B)  $150,000 
C)  $190,000 
D)  $15,000 
A)  $110,000 
B)  $150,000 
C)  $190,000 
D)  $15,000 A

Question 3

Hodges, Inc. had the following assets and liabilities as of September 30, 2013: $$\begin{array} { l l } 
566,327 & \text { Asset } \
528,416 & \text { Iiabilities }
\end{array}$$ What is the stockholders' equity of Hodges as of September 30, 2013?

Accepted Answer

A)  $0 
B)  $27,911 
C)  $84,743 
D)  Cannot be determined with this information 
A)  $0 
B)  $27,911 
C)  $84,743 
D)  Cannot be determined with this information B

Question 4

Calculate the following:
 (a)Determine the corh rec aighs for May based tar the following date:
$\begin{array}{ll}
\$ 42,500 & \text { Cash payments churing May } \
3,750 & \text { Cash account balance, May 1 } \
6,000 & \text { Cash account balance, May 31 }
\end{array}$

(b)$\text { Determine the cash received from customers on account during May based on the following data: }$
$\begin{array}{ll}
\$ 11,500 & \text { Accounts receivable account balance, May 1 } \
8,250 & \text { Accounts receivable account balance, May 31 } \
28,000 & \text { Fees billed to customers during May }
\end{array}$

Accepted Answer

None

Question 5

Which of the following accounts is a stockholders' equity account?

Accepted Answer

A)  Cash 
B)  Capital Stock 
C)  Prepaid Insurance 
D)  Accounts Payable 
A)  Cash 
B)  Capital Stock 
C)  Prepaid Insurance 
D)  Accounts Payable

Question 6

When an account receivable is collected in cash, the total assets of the business increase.

Accepted Answer

A) True 
 B)False

Question 7

What are the basic elements of a financial accounting system?

Accepted Answer

A financial accounting system is designe

Question 8

The payment of $15,000 for expenses was recorded by Spears Co. as an increase in cash of $15,000 and a decrease in retained earnings of $15,000. What is the effect of this error on the accounting equation?

Accepted Answer

A)  Total assets will exceed total liabilities and stockholders' equity by $15,000. 
B)  Total assets will exceed total liabilities and stockholders' equity by $30,000. 
C)  Total assets will be less than total liabilities and stockholders' equity by $30,000. 
D)  The error will not affect the accounting equation. 
A)  Total assets will exceed total liabilities and stockholders' equity by $15,000. 
B)  Total assets will exceed total liabilities and stockholders' equity by $30,000. 
C)  Total assets will be less than total liabilities and stockholders' equity by $30,000. 
D)  The error will not affect the accounting equation.

Question 9

Which of the following is not considered to be a liability?

Accepted Answer

A)  Note payable 
B)  Accounts receivable 
C)  Unearned revenues 
D)  Accounts payable 
A)  Note payable 
B)  Accounts receivable 
C)  Unearned revenues 
D)  Accounts payable

Question 10

Cash receipts from cash sales affects which financial statement elements?

Accepted Answer

A)  Assets only 
B)  Stockholders' equity only 
C)  Assets and stockholders' equity 
D)  Assets and liabilities 
A)  Assets only 
B)  Stockholders' equity only 
C)  Assets and stockholders' equity 
D)  Assets and liabilities

Question 11

Letty's Laundry and Dry Cleaning incorporated and started business on January 1, 2013.
 1 Letty's Laundry and Dry Clearing began busine ss by depositing $ \$ 30,000 $ in a checking account in the name of Letty's Laundry and Dry 1 
 Cleaning, Inc. for which capit al stock is issued.

2 Borrowed $ \$ 6,000 $ from City Bank.
3 Purchased equipment from Washers Wholesale, $ \$ 16,200 $.
4 Purchased supplies costing $ \$ 3,000 $ from Suds'n Stuff for cash
5 Paid one montlis rent for business space in Pine Plaza, $ \$ 1,000 $.
6 Servic esprovided to customers during J anuary totaled $ \$ 13,400 $. All serviceswere  paid for in cash.
7 Paid employee sor January, $ \$ 2,240 $.
8 Received and paid the utility bill, $ \$ 500 $.
9 Received and paid the telephone bill, $ \$ 250 $.
10 Paid dividends to the stockholders, $ \$ 2,140 $. Indicate the effect of each transaction on the accounting equation by listing the numbers identifying the transactions, (1) through (10) in a vertical column, and inserting at the right of each number the appropriate letter from the following list:
 $\begin{array}{|l|l|}
\hline \text { Increase in an asset, decrease in another asset. } & \text { a. } \
\hline \text { Increase in an asset, increase in a liability. } & \text { b. } \
\hline \text { Increase in an asset, increase in stockholders' equity. } & \text { c. } \
\hline \text { Decrease in an asset, decrease in a liability. } & \text { d. } \
\hline \text { Decrease in an asset, decrease in stockholders' equity } & \text { e. } \
\hline
\end{array}$

Accepted Answer

The answer of Letty's Laundry and Dry Cleaning incorporated and...

Question 12

If Assets have a balance of $40,000 and Stockholders' Equity has a balance of $30,000, then Liabilities must have a balance of:

Accepted Answer

A)  $70,000. 
B)  $30,000. 
C)  $40,000. 
D)  $10,000. 
A)  $70,000. 
B)  $30,000. 
C)  $40,000. 
D)  $10,000.

Question 13

The following are included in Ace Auto Parts, Inc.'s December 31, 2012 balance sheet:
 $\begin{array}{|l|l|}
\hline 50,000 & \text { Accounts Receivable } \
\hline 100,000 & \text { Building } \
\hline 60,000 & \text { Cash } \
\hline 130,000 & \text { Land } \
\hline 40,000 & \text { Accounts Payable } \
\hline 70,000 & \text { Notes Payable } \
\hline ? & \text { Stockholders Equity }\
\hline
\end{array}$
 Below are the balances for December 31, 2013:
 $\begin{array}{|l|l|}
\hline \$90,000 & \text { Accounts Receivable } \
\hline 100,000 & \text { Building } \
\hline 150,000 & \text { Cash } \
\hline 130,000 & \text { Land } \
\hline 60,000 & \text { Accounts Payable } \
\hline50,000 & \text { Notes Payable } \
\hline ? & \text { Stockholders Equity }\
\hline
\end{array}$
 Analyze the changes in these balances and determine net income for 2013, assuming that the only change to stockholders' equity is from net income.

Accepted Answer

None

Question 14

The first month of operation showed the net cash from operating activities to be $3,760, the net cash from investing activities to be ($5,415), and the ending cash balance to be $3,425. The net cash from financing activities must be:

Accepted Answer

A)  $1,770. 
B)  $5,080. 
C)  $5,750. 
D)  $12,600. 
A)  $1,770. 
B)  $5,080. 
C)  $5,750. 
D)  $12,600.

Question 15

A transaction can affect at most two elements of the accounting equation.

Accepted Answer

A) True 
 B)False

Question 16

Explain how the four financial statements are linked.

Accepted Answer

A financial accounting system is designe

Question 17

The income statement for August indicates net income of $50,000. The corporation also paid $10,000 in dividends during the same period. If there was no beginning balance in stockholders' equity, what is the ending balance in stockholders' equity?

Accepted Answer

A)  $40,000 
B)  $50,000 
C)  $10,000 
D)  $60,000 
A)  $40,000 
B)  $50,000 
C)  $10,000 
D)  $60,000

Question 18

Declaring and paying cash dividends affects which account/ accounts?

Accepted Answer

A)  Cash only 
B)  Capital stock only 
C)  Cash and retained earnings 
D)  Cash and capital stock 
A)  Cash only 
B)  Capital stock only 
C)  Cash and retained earnings 
D)  Cash and capital stock

Question 19

Declaring and paying cash dividends affects which balance sheet accounts?

Accepted Answer

A)  Cash only 
B)  Stockholders' equity only 
C)  Cash and stockholders' equity 
D)  Cash and capital stock 
A)  Cash only 
B)  Stockholders' equity only 
C)  Cash and stockholders' equity 
D)  Cash and capital stock

Question 20

Which of the following will increase stockholders' equity?

Accepted Answer

A)  Expenses > revenues 
B)  Owners' investment 
C)  Accounts payable 
D)  Dividends paid 
A)  Expenses > revenues 
B)  Owners' investment 
C)  Accounts payable 
D)  Dividends paid

Revenues decrease stockholders' equity.

Exhibit 2-1 Total Linbilities Total Assets \ 60,000 \ 100,000 Begiming of the year \ 325,000 \ 500,000 End of the year Refer to Exhibit 2-1. What is net income, assuming $50,000 of stock was issued and $25,000 of dividends were paid?

Hodges, Inc. had the following assets and liabilities as of September 30, 2013: 566,327 Asset 528,416 Iiabilities What is the stockholders' equity of Hodges as of September 30, 2013?

Which of the following accounts is a stockholders' equity account?

When an account receivable is collected in cash, the total assets of the business increase.

What are the basic elements of a financial accounting system?

The payment of $15,000 for expenses was recorded by Spears Co. as an increase in cash of $15,000 and a decrease in retained earnings of $15,000. What is the effect of this error on the accounting equation?

Which of the following is not considered to be a liability?

Cash receipts from cash sales affects which financial statement elements?

If Assets have a balance of $40,000 and Stockholders' Equity has a balance of $30,000, then Liabilities must have a balance of:

The first month of operation showed the net cash from operating activities to be $3,760, the net cash from investing activities to be ($5,415), and the ending cash balance to be $3,425. The net cash from financing activities must be:

A transaction can affect at most two elements of the accounting equation.

Explain how the four financial statements are linked.

The income statement for August indicates net income of $50,000. The corporation also paid $10,000 in dividends during the same period. If there was no beginning balance in stockholders' equity, what is the ending balance in stockholders' equity?

Declaring and paying cash dividends affects which account/ accounts?

Declaring and paying cash dividends affects which balance sheet accounts?

Which of the following will increase stockholders' equity?

The Role of Accounting in Business

Accrual Accounting Concepts

Accounting for Merchandising Businesses

Sarbanes-Oxley, Internal Control, and Cash

Receivables and Inventories

Fixed Assets and Intangible Assets

Liabilities and Stockholders Equity

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

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Exam 2: Basic Accounting Concepts

Revenues decrease stockholders' equity.

Exhibit 2-1 Total Linbilities Total Assets \ 60,000 \ 100,000 Begiming of the year \ 325,000 \ 500,000 End of the year Refer to Exhibit 2-1. What is net income, assuming $50,000 of stock was issued and $25,000 of dividends were paid?

Hodges, Inc. had the following assets and liabilities as of September 30, 2013: 566,327 Asset 528,416 Iiabilities What is the stockholders' equity of Hodges as of September 30, 2013?

Which of the following accounts is a stockholders' equity account?

When an account receivable is collected in cash, the total assets of the business increase.

What are the basic elements of a financial accounting system?

The payment of $15,000 for expenses was recorded by Spears Co. as an increase in cash of $15,000 and a decrease in retained earnings of $15,000. What is the effect of this error on the accounting equation?

Which of the following is not considered to be a liability?

Cash receipts from cash sales affects which financial statement elements?

If Assets have a balance of $40,000 and Stockholders' Equity has a balance of $30,000, then Liabilities must have a balance of:

The first month of operation showed the net cash from operating activities to be $3,760, the net cash from investing activities to be ($5,415), and the ending cash balance to be $3,425. The net cash from financing activities must be:

A transaction can affect at most two elements of the accounting equation.

Explain how the four financial statements are linked.

The income statement for August indicates net income of $50,000. The corporation also paid $10,000 in dividends during the same period. If there was no beginning balance in stockholders' equity, what is the ending balance in stockholders' equity?

Declaring and paying cash dividends affects which account/ accounts?

Declaring and paying cash dividends affects which balance sheet accounts?

Which of the following will increase stockholders' equity?

The Role of Accounting in Business

Accrual Accounting Concepts

Accounting for Merchandising Businesses

Sarbanes-Oxley, Internal Control, and Cash

Receivables and Inventories

Fixed Assets and Intangible Assets

Liabilities and Stockholders Equity

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

Filters