Question 1

Mineola Company paid $30,000 cash to purchase land. As a result of this business event,

Accepted Answer

A)  Total equity was not affected. 
B)  The net cash flow from investing activities decreased. 
C)  Total assets were not affected. 
D)  All of these are correct. 
A)  Total equity was not affected. 
B)  The net cash flow from investing activities decreased. 
C)  Total assets were not affected. 
D)  All of these are correct.

Question 2

Which of the following is NOT an asset use transaction?

Accepted Answer

A)  Paying cash to purchase land 
B)  Paying cash expenses 
C)  Paying off the principal of a loan 
D)  All of these are asset use transactions 
A)  Paying cash to purchase land 
B)  Paying cash expenses 
C)  Paying off the principal of a loan 
D)  All of these are asset use transactions

Question 3

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 liabilities on La Paz's 2013 balance sheet was

Accepted Answer

A)  $900. 
B)  $500. 
C)  ($1,300). 
D)  $240. 
A)  $900. 
B)  $500. 
C)  ($1,300). 
D)  $240.

Question 4

Vantage Corporation invested $800 cash in Tandem Company stock.
Which of the following describes the effects of this transaction on Vantage Corporation's books? $$\begin{array} { | l | l | l | l | l | l | l } 
\hline \text { Assets } = & \text { Liab. } + & \text { Equity } & \text { Rev. } - & \text { Exp. } = & \text { Net Inc. } & \text { Cash Flow } \
\hline
\end{array}$$

Accepted Answer

A) 
$$\begin{array} { | l | l | l | l | l | l | l | l|l|l|l|} 
- & = & + &+& \mathrm { NA } & \mathrm { NA }& - & - & =  & - & - IA \
\hline
\end{array}$$ 
B) 
  
C) 
  
D) 
$$\begin{array} { | l | l | l | l | l | l | l | l | l | l | l | } 
\hline \text { NA } & = & \text { NA } & + & \text { NA } & \text { NA } & - & \text { NA } & = & \text { NA } & \text {-IA } \
\hline
\end{array}$$ 
A) 
$$\begin{array} { | l | l | l | l | l | l | l | l|l|l|l|} 
- & = & + &+& \mathrm { NA } & \mathrm { NA }& - & - & =  & - & - IA \
\hline
\end{array}$$ 
B) 
  
C) 
  
D) 
$$\begin{array} { | l | l | l | l | l | l | l | l | l | l | l | } 
\hline \text { NA } & = & \text { NA } & + & \text { NA } & \text { NA } & - & \text { NA } & = & \text { NA } & \text {-IA } \
\hline
\end{array}$$

Question 5

Which of the following groups has the primary responsibility for establishing generally accepted accounting principles for business entities in the United States?

Accepted Answer

A)  Internal Revenue Service. 
B)  U.S. Congress. 
C)  Financial Accounting Standards Board. 
D)  International Accounting Standards Board. 
A)  Internal Revenue Service. 
B)  U.S. Congress. 
C)  Financial Accounting Standards Board. 
D)  International Accounting Standards Board.

Question 6

Falcon Company earned $15,000 of cash revenue. Which of the following choices accurately reflects how this event affects the company's financial statements? $\begin{array}{|l|l|l|l|l|l|l|l|l|l|l|}
\hline\text {  Assets }&=& \text { Liab. }&+&\text { Equity } &\text { Rev. }&-& \text { Exp. }&=& \text { Net Inc. } &\text { Cash Flow }\
\hline
\end{array}$

Accepted Answer

A) 
$$\begin{array} { | l | l | l | l | l | l | l | l | l | l | l | } 
\hline 15,000 & = & \text { NA } & + & 15,000 & \text { NA } & - & \text { NA } & = & \text { NA } & 15,000 \text { OA } \
\hline
\end{array}$$ 
B) 
$$\begin{array} { | l | l | l | l | l | l | l | l | l | l | l |} 
\hline 15,000 & = & \mathrm { NA } & + & 15,000 & 15,000 & - & \mathrm { NA } & = & 15,000 & \text { NA } \
\hline
\end{array}$$ 
C) 
$$\begin{array} { | l | l | l | l | l | l | l | l | l | l | l | } 
\hline 15,000 & = & \mathrm { NA } & + & 15,000 & 15,000 & - & \mathrm { NA } & = & 15,000 & 15,000 \mathrm { OA } \
\hline
\end{array}$$ 
D) 
$$\begin{array} { | l | l | l | l | l | l | l | l | l | l|l|} 
\hline15,000&=&15,000&+&NA&15,000&-&NA&=&15,000&15,000 OA \
\hline
\end{array}$$ 
A) 
$$\begin{array} { | l | l | l | l | l | l | l | l | l | l | l | } 
\hline 15,000 & = & \text { NA } & + & 15,000 & \text { NA } & - & \text { NA } & = & \text { NA } & 15,000 \text { OA } \
\hline
\end{array}$$ 
B) 
$$\begin{array} { | l | l | l | l | l | l | l | l | l | l | l |} 
\hline 15,000 & = & \mathrm { NA } & + & 15,000 & 15,000 & - & \mathrm { NA } & = & 15,000 & \text { NA } \
\hline
\end{array}$$ 
C) 
$$\begin{array} { | l | l | l | l | l | l | l | l | l | l | l | } 
\hline 15,000 & = & \mathrm { NA } & + & 15,000 & 15,000 & - & \mathrm { NA } & = & 15,000 & 15,000 \mathrm { OA } \
\hline
\end{array}$$ 
D) 
$$\begin{array} { | l | l | l | l | l | l | l | l | l | l|l|} 
\hline15,000&=&15,000&+&NA&15,000&-&NA&=&15,000&15,000 OA \
\hline
\end{array}$$

Question 7

During 2013, XYZ Company issued common stock to stockholders for $10,000; purchased land for $2,000 cash; provided services to customers for $8,000; paid cash operating expenses of $6,200; and paid cash dividends of $1,000 to the company's owners. Enter each of these events into the horizontal financial statements model, below. Indicate dollar amounts of increases and decreases. For cash flows, show whether they are operating activities (OA), investing activities (IA), or financing activities (FA).

Accepted Answer

The answer of During 2013, XYZ Company issued common stock...

Question 8

Canton Company was formed in 2013 and experienced the following accounting events during the year:
1. issued common stock for $10,000 cash
2. earned cash revenue of $15,000
3. paid cash expenses of $13,000.
These were the only events that affected the company during the year.
Required:
a) Write the accounting equation and record the effects of each accounting event under the appropriate general ledger account heading.
b) Prepare an income statement for 2013 and a balance sheet as of December 31, 2013.

Accepted Answer

The answer of Canton Company was formed in 2013 and...

Question 9

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.

Accepted Answer

A) 
  
B) 
  
C) 
  
D) 
  
A) 
  
B) 
  
C) 
  
D)

Question 10

Yi Company began operations on January 1, 2013. During 2013, the company engaged in the following cash transactions:
1) issued stock for $40,000
2) borrowed $25,000 from its bank
3) provided consulting services for $38,000
4) paid back $15,000 of the bank loan
5) paid rent expense for $9,000
6) purchased equipment costing $12,000
7) paid $3,000 dividends to stockholders
8) paid employees' salaries, $21,000
What is Yi's cash flow from financing activities?

Accepted Answer

A)  Inflow of $37,000 
B)  Outflow of $15,000 
C)  Inflow of $47,000 
D)  Outflow of $3,000 
A)  Inflow of $37,000 
B)  Outflow of $15,000 
C)  Inflow of $47,000 
D)  Outflow of $3,000

Question 11

Which of the following represents effects of an asset use transaction on a company's financial statements? $$\begin{array} { | l | l | l | l | l | l | l | } 
\hline \text { Assets } = & \text { Liab. } + & \text { Equity } & \text { Rev. } - & \text { Exp. } = & \text { Net Inc. } & \text { Cash Flow } \
\hline
\end{array}$$

Accepted Answer

A) 
$$\begin{array} { | l | l | l | l | l | l | l | l | l | l | l } 
\hline - & = & \text { NA } & + & - & \text { NA } & - & \text { NA } & = & \text { NA } & \text {-FA } \
\hline
\end{array}$$ 
B) 
$\begin{array}{|l|l|l|l|l|l|l|l|l|l|l|}
\hline- & = & - & + & \text { NA } & \text { NA } & - & - & = & - & - \text { IA } \
\hline
\end{array}$ 
C) 
$\begin{array}{|l|l|l|l|l|l|l|l|l|l|l|}
\hline- & = &NA & + &-&-& - &NA & = & - & - \text { OA } \
\hline
\end{array}$ 
D) 
$$\text { None of these could represent the effects of an asset source transaction. }$$ 
A) 
$$\begin{array} { | l | l | l | l | l | l | l | l | l | l | l } 
\hline - & = & \text { NA } & + & - & \text { NA } & - & \text { NA } & = & \text { NA } & \text {-FA } \
\hline
\end{array}$$ 
B) 
$\begin{array}{|l|l|l|l|l|l|l|l|l|l|l|}
\hline- & = & - & + & \text { NA } & \text { NA } & - & - & = & - & - \text { IA } \
\hline
\end{array}$ 
C) 
$\begin{array}{|l|l|l|l|l|l|l|l|l|l|l|}
\hline- & = &NA & + &-&-& - &NA & = & - & - \text { OA } \
\hline
\end{array}$ 
D) 
$$\text { None of these could represent the effects of an asset source transaction. }$$

Question 12

The four financial statements prepared by a business bear no relationship to each other.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following could represent the effects of an asset exchange transaction on a company's financial statements? $$\begin{array} { | l | l | l | l | l | l | l | l | l | l | l |} 
\hline \text { Assets } & = & \text { Liab. } & + & \text { Equity } & \text { Rev. } & - & \text { Exp. } & = & \text { Net Inc. } & \text { Cash Flow } \
\hline
\end{array}$$

Accepted Answer

A) 
  
B) 
$$\begin{array} { | c | c | c | c | c | c | c | c | c | c | c | } 
\hline + - & = & + & + & \text { NA } & \text { NA } & - & + & = & + & \text { NA } \
\hline
\end{array}$$ 
C) 
$$\begin{array} { | l | l | l | l | l | l | l | l | l | l | l | } 
\hline - & = & \text { NA } & + & - & \text { NA } & - & \text { NA } & = & \text { NA } & - \text { OA } \
\hline
\end{array}$$ 
D) 
$$\text { None of these could represent the effects of an asset exchange transaction. }$$ 
A) 
  
B) 
$$\begin{array} { | c | c | c | c | c | c | c | c | c | c | c | } 
\hline + - & = & + & + & \text { NA } & \text { NA } & - & + & = & + & \text { NA } \
\hline
\end{array}$$ 
C) 
$$\begin{array} { | l | l | l | l | l | l | l | l | l | l | l | } 
\hline - & = & \text { NA } & + & - & \text { NA } & - & \text { NA } & = & \text { NA } & - \text { OA } \
\hline
\end{array}$$ 
D) 
$$\text { None of these could represent the effects of an asset exchange transaction. }$$

Question 14

Hacienda Company issued common stock for $250,000 cash. As a result of this event,

Accepted Answer

A)  assets increased. 
B)  retained earnings increased. 
C)  equity increased. 
D)  assets increased and equity increased. 
A)  assets increased. 
B)  retained earnings increased. 
C)  equity increased. 
D)  assets increased and equity increased.

Question 15

Indicate whether each of the following statements about markets is true or false.
_______ a) Financial resources can be provided to a business by investors and creditors.
_______ b) Conversion agents are the businesses that transform resources into products that satisfy consumer desires.
_______ c) Physical resources include the labor of the production workers.
_______ d) Resource owners purchase their resources from conversion agents.
_______ e) Consumers are the main providers of resources in any market.

Accepted Answer

a) True b) True c) False d) False e) Fal

Question 16

Young Company provided services to a customer for $6,500 cash. As a result of this event,

Accepted Answer

A)  total assets decreased. 
B)  total liabilities increased. 
C)  net income increased. 
D)  cash flow from financing activities increased. 
A)  total assets decreased. 
B)  total liabilities increased. 
C)  net income increased. 
D)  cash flow from financing activities increased.

Question 17

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 net cash inflow from financing activities on Petras's 2013 statement of cash flows is

Accepted Answer

A)  $5. 
B)  $325. 
C)  $225. 
D)  $955. 
A)  $5. 
B)  $325. 
C)  $225. 
D)  $955.

Question 18

Which of the following items would appear in the cash flow from the financing activities section of a statement of cash flows?

Accepted Answer

A)  Paid cash for expenses. 
B)  loaned cash to another company. 
C)  Sold land for cash. 
D)  Paid cash for dividends. 
A)  Paid cash for expenses. 
B)  loaned cash to another company. 
C)  Sold land for cash. 
D)  Paid cash for dividends.

Question 19

Equity represents the future obligations of a business entity.

Accepted Answer

A) True 
 B)False

Question 20

Mineola Company paid $30,000 cash to purchase land. As a result of this business event,

Accepted Answer

A)  Total equity was not affected. 
B)  The net cash flow from investing activities decreased. 
C)  Total assets were not affected. 
D)  All of these are correct. 
A)  Total equity was not affected. 
B)  The net cash flow from investing activities decreased. 
C)  Total assets were not affected. 
D)  All of these are correct.

Mineola Company paid $30,000 cash to purchase land. As a result of this business event,

Which of the following is NOT an asset use transaction?

Vantage Corporation invested $800 cash in Tandem Company stock. Which of the following describes the effects of this transaction on Vantage Corporation's books? Assets = Liab. + Equity Rev. - Exp. = Net Inc. Cash Flow

Which of the following groups has the primary responsibility for establishing generally accepted accounting principles for business entities in the United States?

Falcon Company earned $15,000 of cash revenue. 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

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.

Which of the following represents effects of an asset use transaction on a company's financial statements? Assets = Liab. + Equity Rev. - Exp. = Net Inc. Cash Flow

The four financial statements prepared by a business bear no relationship to each other.

Which of the following could represent the effects of an asset exchange transaction on a company's financial statements? Assets = Liab. + Equity Rev. - Exp. = Net Inc. Cash Flow

Hacienda Company issued common stock for $250,000 cash. As a result of this event,

Young Company provided services to a customer for $6,500 cash. As a result of this event,

Which of the following items would appear in the cash flow from the financing activities section of a statement of cash flows?

Equity represents the future obligations of a business entity.

Mineola Company paid $30,000 cash to purchase land. As a result of this business event,

Accounting for Accruals and Deferrals

Accounting for Merchandising Businesses

Internal Controls, Accounting for Cash, and Ethics

Accounting for Receivables and Inventory Cost Flow

Accounting for Long-Term Operational Assets

Accounting for Liabilities

Proprietorships, Partnerships, and Corporations

Financial Statement Analysis

An Introduction to Management Accounting

Cost Behavior, Operating Leverage, and Profitability Analysis

Cost Accumulation, Tracing, and Allocation

Relevant Information for Special Decisions

Planning for Profit and Cost Control

Performance Evaluation

Planning for Capital Investments

Filters

Exam 1: An Introduction to Accounting

Mineola Company paid $30,000 cash to purchase land. As a result of this business event,

Which of the following is NOT an asset use transaction?

Vantage Corporation invested $800 cash in Tandem Company stock. Which of the following describes the effects of this transaction on Vantage Corporation's books? Assets = Liab. + Equity Rev. - Exp. = Net Inc. Cash Flow

Which of the following groups has the primary responsibility for establishing generally accepted accounting principles for business entities in the United States?

Falcon Company earned $15,000 of cash revenue. 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

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.

Which of the following represents effects of an asset use transaction on a company's financial statements? Assets = Liab. + Equity Rev. - Exp. = Net Inc. Cash Flow

The four financial statements prepared by a business bear no relationship to each other.

Which of the following could represent the effects of an asset exchange transaction on a company's financial statements? Assets = Liab. + Equity Rev. - Exp. = Net Inc. Cash Flow

Hacienda Company issued common stock for $250,000 cash. As a result of this event,

Young Company provided services to a customer for $6,500 cash. As a result of this event,

Which of the following items would appear in the cash flow from the financing activities section of a statement of cash flows?

Equity represents the future obligations of a business entity.

Mineola Company paid $30,000 cash to purchase land. As a result of this business event,

Accounting for Accruals and Deferrals

Accounting for Merchandising Businesses

Internal Controls, Accounting for Cash, and Ethics

Accounting for Receivables and Inventory Cost Flow

Accounting for Long-Term Operational Assets

Accounting for Liabilities

Proprietorships, Partnerships, and Corporations

Financial Statement Analysis

An Introduction to Management Accounting

Cost Behavior, Operating Leverage, and Profitability Analysis

Cost Accumulation, Tracing, and Allocation

Relevant Information for Special Decisions

Planning for Profit and Cost Control

Performance Evaluation

Planning for Capital Investments

Filters