Exam 1: An Introduction to Accounting

Which of the following items appears in the investing activities section of the statement of cash flows?

Indicate whether each of the following statements about equity is true or false. _______ a) Operating expenses reported on the income statement increase retained earnings. _______ b) Common Stock is a part of contributed or paid-in capital for a corporation. _______ c) Retained earnings is increased by loans received from a bank. _______ d) Dividends paid to stockholders decrease retained earnings. _______ e) Owners' equity is the residual interest in the company resulting from the difference between assets and liabilities.

Equity represents the future obligations of a business entity.

Managerial accounting provides information primarily to which of the following groups or individuals?

At the beginning of 2012, Gratiot Company's accounting records had the general ledger accounts and balances shown in the table below. During 2012, the following transactions occurred: 1. received $95,000 cash for providing services to customers 2. paid salaries expense, $50,000 3. purchased land for $12,000 cash 4. paid $4,000 on note payable 5. paid operating expenses, $22,000 6. paid cash dividend, $2,500 Required: a) Record the transactions in the appropriate general ledger accounts. Record the amounts of revenue, expense, and dividends in the retained earnings column. Provide appropriate titles for these accounts in the last column of the table. b) What is the amount of total assets as of December 31, 2012? c) What is the amount of total stockholders' equity as of December 31, 2012?

In which section of a statement of cash flows would the payment of cash dividends be reported?

During 2013, Chi Company earned $950 of cash revenue, paid $600 of cash expenses, and paid a $100 cash dividend to its owners. Based on this information alone,

Flagstone Company was founded on January 1, 2013. During 2013, the company experienced the following events: 1. earned cash revenue of $25,000 2. paid cash expenses of $20,500 3. issued common stock for $15,000 cash 4. paid cash dividend of $1,000 to owners. Required: a) Write an accounting equation and record effects of each accounting event under appropriate general ledger account headings, showing dollar amounts of increases and decreases and totals at the end of the year. b) Prepare the 2013 income statement and balance sheet for Flagstone Company.

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).

Which of the following financial statements provides information about a company as of a specific point in time?

The balance sheet of the Chesapeake Company contained the following accounts and balances: Based on the above information only, the amount or balance for Land must be

Based on this information, the amount of expenses on Greenway's income statement was

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. 5) Paid $16,600 of salary expense. 6) 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.

Dover Company experienced an accounting event that affected its financial statements as indicated below: Which of the following accounting events could have caused these effects on Dover's statements?

Explain some of the accounting similarities and differences between not-for-profit organizations and for-profit businesses.

In a market, consumers are resource providers.

Grayson Corporation reports the following cash transactions for the year ending December 31, 2012, its first year of operation: 1) issued common stock for $36,000 2) borrowed $20,000 from a local bank 3) purchased land for $24,000 4) provided services to clients for $28,000 5) paid operating expenses of $21,500 6) paid $2,500 cash dividends to stockholders Required: a) What are the total assets for Grayson Corporation at December 31, 2012? b) Prepare an income statement for 2012.

The net cash flow from financing activities on La Paz's 2013 statement of cash flows was

Which resource provider typically receives first priority when resources are divided as part of a business's liquidation?

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.