Exam 1: An Introduction to Accounting

Use the following information to prepare an income statement for Grandin Company for the period ending December 31, 2012. All transactions were for cash. A) Received revenue from services provided to customers, $28,500. B) Paid $19,000 cash for land. C) Paid operating expenses, $19,400. D) Paid dividends to stockholders, $3,200. E) Issued $16,000 of common stock.

Which type of accounting information is intended to satisfy the needs of external users of accounting information?

As of December 31, 2012, Montross Company had $400 cash. During 2013, Montross earned $1,200 of cash revenue and paid $800 of cash expenses. The amount of cash shown on the 2013 balance sheet would be

Dividends paid by a company are shown on the

The Jefferson Company is a manufacturer of antique reproduction furniture. Which term best describes Jefferson's role in society?

Name the group that has the primary authority for establishing U.S. GAAP.

The Ruiz Company began operations on January 1, 2013 and on that date issued $30,000 of common stock for cash. In addition, the company borrowed $20,000 from the bank. It provided services to its customers during 2013 and received $36,000 cash. During the year, it paid $40,000 cash for land, $10,000 for salaries, and $6,000 in cash dividends to the owners. Required: 1) Write an accounting equation and record the effects of each transaction under the appropriate heading. (Use specific accounting titles below the statement elements) 2) Prepare an income statement and a balance sheet for the 2013 accounting period.

Freed Company paid $500 cash for salary expenses. Which of the following choices accurately reflects how this event affects the company's financial statements?