Exam 1: An Introduction to Accounting

Freed Company paid $500 cash for salary expenses. Which of the following choices accurately reflects how this event affects the company's financial statements? Assets = Liab. + Equity Rev. - Exp. = Net Inc. Cash Flow

What is meant by the term double-entry bookkeeping?

George Company was started on January 1, 2013, when it acquired $8,000 cash by issuing common stock. During 2013, the company earned cash revenues of $3,500, paid cash expenses of $2,750, and paid a cash dividend of $300. Based on this information,

The following transactions apply to Warren Fitness Center for 2012. 1) Started the business by issuing $38,000 of common stock for cash. 2) Provided services to clients and received $28,500 cash. 3) Borrowed $7,500 from the bank. 4) Paid $6,500 for rent of equipment. 5) Purchased land for $12,000. 6) Paid $16,600 of salary expense. 7) Cash dividends of $4,500 were paid to the stockholders. Required: a) What are the total assets of the business at the end of 2012? b) Prepare a Statement of Cash Flows for 2012.

The types of resources needed by a business are financial, physical, and capital resources.

The following transactions apply to the Grant Corporation for 2013, its first year in business. 1) Issued stock to investors, $24,000. 2) The company borrowed $21,000 cash from the bank. 3) Services were provided to customers and $24,000 cash was received. 4) The company loaned $5,000 to another company. 5) The company acquired land for $22,000. 6) The company paid $12,000 rent for the building where it does its business. 7) The company paid $1,600 for supplies that were used during the period. 8) The company sold the land acquired in item 5 for $22,000. 9) A dividend of $5,000 was made to the owners. 10) Repaid $10,000 of the loan described in item 2. Required: Prepare a statement of cash flows for 2013.

Borrowing money from the bank is an example of an asset source transaction.

Petras Company engaged in the following transactions during 2012, its first year in operations: (Assume all transactions are cash transactions) 1) Acquired $950 cash from the issue of common stock. 2) Borrowed $420 from a bank. 3) Earned $600 of revenues. 4) Paid expenses of $250. 5) Paid a $50 dividend. During 2013, Petras engaged in the following transactions: (Assume all transactions are cash transactions) 1) Issued an additional $325 of common stock. 2) Repaid $220 of its debt to the bank. 3) Earned revenues of $750. 4) Incurred expenses of $360. 5) Paid dividends of $100. The total in Petras' retained earnings account BEFORE closing in 2012 is

In a market, consumers are resource providers.

The transactions listed below apply to Lovell Company for its first year in business. Assume that all transactions involve the receipt or payment of cash. Transactions for the year 2012: 1) Issued common stock to investors for $15,000 cash. 2) Borrowed $8,000 from the local bank. 3) Provided services to customers for $18,000. 4) Paid expenses amounting to $11,400. 5) Purchased a plot of land costing $12,000. 6) Paid a dividend of $6,000 to its stockholders. 7) Repaid $4,000 of the loan listed in item 2. Required: (a) Fill in the headings to the accounting equation shown below. (b) Show the effects of the above transactions on the accounting equation.

Rialto Company experienced an accounting event that affected its financial statements as indicated below: Assets + = Liab. NA + Equity + Rev + - Exp NA = Net Inc. + Cash Flow + Which of the following accounting events could have caused these effects on Rialto's statements?

Retained Earnings at the beginning and ending of the accounting period was $300 and $700, respectively. If revenues were $1,100 and dividends paid to stockholders were $200, expenses for the period must have been

Fill in the missing information by determining the amounts represented by letters a - d.

Petras Company engaged in the following transactions during 2012, its first year in operations: (Assume all transactions are cash transactions) 1) Acquired $950 cash from the issue of common stock. 2) Borrowed $420 from a bank. 3) Earned $600 of revenues. 4) Paid expenses of $250. 5) Paid a $50 dividend. During 2013, Petras engaged in the following transactions: (Assume all transactions are cash transactions) 1) Issued an additional $325 of common stock. 2) Repaid $220 of its debt to the bank. 3) Earned revenues of $750. 4) Incurred expenses of $360. 5) Paid dividends of $100. The amount of assets on Petras's 2013 balance sheet is

How does providing services for cash affect the accounting equation? Is it considered an asset source, asset use, or asset exchange transaction?

Indicate whether each of the following statements about accounting information is true or false. _______ a) Financial accounting is primarily intended to satisfy the information needs of external resource providers. _______ b) Financial accounting information is useful only to banks and stockholders. _______ c) The accounting information intended to satisfy the needs of a company's employees is managerial accounting information. _______ d) GAAP requires that companies adhere to managerial accounting standards. _______ e) Managerial accounting information is usually more detailed than financial accounting information.

The year-end financial statements of Greenway Company contained the following elements and corresponding amounts: Assets = $20,000; Liabilities = ?; Common Stock = $5,000; Revenue = $11,000; Dividends = $750; Beginning Retained Earnings = $3,750; Ending Retained Earnings = $7,000. Based on this information, the amount of expenses on Greenway's income statement was

Burton Company sold land for $25,000 cash. The original cost of the land was $25,000. Select the answer that indicates how this event affects the company's financial statements.

What is meant by the term "global GAAP"? How does it impact U.S. companies? What body is responsible for setting global standards?

La Paz Company engaged in the following transactions during 2012, its first year in operation: (Assume all transactions are cash transactions) 1) Acquired $3,000 cash from issuing common stock. 2) Borrowed $2,200 from a bank. 3) Earned $3,100 of revenues. 4) Incurred $2,400 in expenses. 5) Paid dividends of $400. La Paz Company engaged in the following transactions during 2013: 1) Acquired an additional $500 cash from the issue of common stock. 2) Repaid $1,300 of its debt to the bank. 3) Earned revenues, $4,500. 4) Incurred expenses of $2,750. 5) Paid dividends of $640. The amount of retained earnings on La Paz's 2012 balance sheet was