Exam 1: Introduction to Accounting and Business

Ramierez Company received its first electric bill in the amount of $60 which will be paid next month. How will this transaction affect the accounting equation?

The total assets and the total liabilities of a business at the beginning and at the end of the year appear below. During the year, the company paid $60,000 in cash dividends and issued an additional $45,000 of capital stock. Calculate the net income for the year.

Trendsetter Travel Services began business on January 1, 2011. Balances at December 31, 2011, are listed below. Prepare an income statement, retained earnings statement, and a balance sheet for Trendsetter Travel Services.

Companies like Enron, WorldCom, and Tyco International, Ltd. have been caught in the midst of ethical lapses that led to fines, firings, and criminal and/or civil prosecution. List and briefly describe three factors that are responsible for what went wrong in these companies.

Shiny Kar Company had the following transactions. For each transaction, show the effect on the accounting equation by putting the amount and direction (plus, minus, or NC for no change) in each box of the table below.

Denzel Jones is the major stockholder of Crystal Cleaning Company, a small corporation. Recently, Denzel received $18,000 of dividends from Crystal Cleaning. After receiving the dividends, he contributed $14,000, in his name, to Habitat for Humanity. The contribution of the $14,000 should be recorded on the accounting records of which of the following entities?

Determine the missing amount "X" for each of the following:

Flagger Company began operations on January 1, 2011. The accountant prepared the following list of account balances from the company's records for the first year ended December 31, 2011: Prepare an income statement for Flagger Company in good form.

List the five steps in the process by which accounting provides information to users.

All of the following are general-purpose financial statements except

If total assets decreased by $88,000 during a period of time and stockholders' equity increased by $65,000 during the same period, then the amount and direction (increase or decrease) of the period's change in total liabilities is

Proper ethical conduct implies that you only consider what's in your best interest.

Purchasing supplies on account increases liabilities and decreases equity.

Two common areas of accounting that respectively provide information to internal and external users are

Which of the following is not a certification for accountants?

An account receivable is a claim against a customer arising from a sale on account.

Name and describe the four primary financial statements for a corporation.

The unit of measurement concept requires that economic data be recorded in a common unit of measurement.

An entity that is organized according to state or federal statutes and in which ownership is divided into shares of stock is a

Clifford Moore purchased $15,000 of Star Tech stock for cash. Star Tech would