Exam 1: An Introduction to Accounting

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.

Retained earnings reduces a company's commitment to use its assets for the benefit of its stockholders.

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.

Greene Co. paid $211,000 cash in salaries to its employees.

Which of the following could represent the effects of an asset source transaction on a company's financial statements?

Vincent Co. provided services for $25,000 cash.

Grant Company purchased a delivery van for cash. The cash flow from this event should be shown on the statement of cash flows as

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

Vandever Company's balance sheet reported assets of $42,000, liabilities of $15,000 and common stock of $12,000 as of December 31, 2012. If Retained Earnings on the December 31, 2013 balance sheet is $18,000 and Vandever paid a $14,000 dividend during 2013, then the amount of net income for 2013 was which of the following?

Define the term "accounting period." How does this term relate to the "matching concept" as it pertains to the income statement?

Treadwell Company borrowed $32,000 of cash from a local bank. Which of the following choices accurately reflects how this event affects the company's financial statements?

What is Yi's cash flow from financing activities?

If a company's total assets decreased while liabilities and common stock were unchanged, and no dividends were paid, then

Accounts are subclassifications of the various elements of the financial statements.

Ramon Company experienced the following events during 2012: 1. Acquired $50,000 cash by issuing common stock 2. Borrowed $15,000 cash from a creditor 3. Provided services to customers for $33,000 cash 4. Paid $27,000 cash for operating expenses 5. Paid a cash dividend of $1,500 to stockholders 6. Purchased land with cash, $25,000 Required: a) Show how each of these events affects the accounting equation. Show amounts and increases or decreases, using + for increases and - for decreases and NA for no effect. The first event is done as an example. b) Calculate the total amount of assets, liabilities, common stock, and retained earnings at the end of the period.

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

If Boyd Company reported assets of $500 and liabilities of $200, Boyd's total claims totaled

The amount of liabilities reported on the end-of-period balance sheet was

Classify each of the following events as an asset source (AS), asset use (AU), asset exchange (AX), or not applicable (NA). _______ 1) Borrowed cash from the bank. _______ 2) Issued stock for cash. _______ 3) Invested cash in the common stock of another company. _______ 4) Paid cash for operating expense. _______ 5) Performed services and collected cash. _______ 6) Purchased equipment for cash. _______ 7) Repaid the bank loan with cash. _______ 8) Dividends paid to the stockholders.

What is Yi's net cash flow from operating activities?