Question 1

This information is for Campo Corporation for the year ended December 31, 2014. $\begin{array}{lr}
\text { Cash received from lenders } & \$ 20,000 \
\text { Cash received from customers } & 65,000 \
\text { Cash paid for new equipment } & 30,000 \
\text { Cash dividends paid } & 9,000 \
\text { Cash paid to suppliers } & 28,000 \
\text { Cash balance } 1 / 1 / 14 & 12,000
\end{array}$ Instructions
Prepare the 2014 statement of cash flows for Campo Corporation.

Accepted Answer

The answer of This information is for Campo Corporation for...

Question 2

Benedict Company compiled the following financial information as of December 31, 2014: $$\begin{array} { l r } 
\text { Service revenue } & \$ 560,000 \
\text { Common stock } & 120,000 \
\text { Equipment } & 160,000 \
\text { Operating expenses } & 500,000 \
\text { Cash } & 140,000 \
\text { Dividends } & 40,000 \
\text { Supplies } & 20,000 \
\text { Accounts payable } & 80,000 \
\text { Accounts receivable } & 60,000 \
\text { Retained earnings, } 1 / 1 / 14300,000
\end{array}$$ Benedict's retained earnings on December 31, 2014 are

Accepted Answer

A)  $300,000. 
B)  $360,000. 
C)  $320,000. 
D)  $ 20,000.

Question 3

The United States and the international standard-setting environment are primarily driven by meeting the needs of

Accepted Answer

A)  investors and creditors. 
B)  tax authorities. 
C)  central government planners. 
D)  academic researchers.

Question 4

John Tate is the bookkeeper for Gabelli Company. John has been trying to get the balance sheet of Gabelli Company to balance. It finally balanced, but now he's not sure it is correct.  Instructions
Prepare a correct balance sheet.

Accepted Answer

The answer of John Tate is the bookkeeper for Gabelli...

Question 5

At September 1, the balance sheet accounts for Kiner's Restaurant were as follows: $$\begin{array} { l r l r } 
\text { Accounts Payable } & \$ 3,800 & \text { Land } & \$ 33,000 \
\text { Accounts Receivable } & 1,600 & \text { Common Stock } & ? \
\text { Buildings } & 66,000 & \text { Notes Payable } & 46,000 \
\text { Cash } & 5,000 & \text { Supplies } & 3,600 \
\text { Equipment } & 15,700 & \text { Retained Earnings } & 45,200
\end{array}$$ The following transactions occurred during the next two days:
Stockholders invested an additional $20,000 cash in the business. The accounts payable were paid in full. (No payment was made on the notes payable.)
Instructions
Prepare a balance sheet at September 3, 2014.

Accepted Answer

The answer of At September 1, the balance sheet accounts...

Question 6

How are each of the following financial statements interrelated? (a) Retained earnings statement and income statement. (b) Retained earnings statement and balance sheet. (c) Balance sheet and statement of cash flows.

Accepted Answer

The answer of How are each of the following financial...

Question 7

Corporate stockholders generally pay higher taxes but have no personal liability.

Accepted Answer

A) True 
 B)False

Question 8

Compute the missing amount in each category of the accounting equation.

Accepted Answer

The answer of Compute the missing amount in each category...

Question 9

Financial accounting ethics violations are

Accepted Answer

A)  not a problem in the U.S or internationally. 
B)  much more common in the U.S than internationally. 
C)  much more common internationally than in the U.S. 
D)  a major problem both in the U.S and internationally.

Question 10

Which of the following is the most appropriate and modern definition of accounting?

Accepted Answer

A)  The information system that identifies, records, and communicates the economic events of an organization to interested users. 
B)  A means of collecting information. 
C)  The interconnected network of subsystems necessary to operate a business. 
D)  Electronic collection, organization, and communication of vast amounts of information.

Question 11

Ashley's Accessory Shop started the year with total assets of $140,000 and total liabilities of $80,000. During the year the business recorded $220,000 in revenues, $110,000 in expenses, and dividends of $40,000. The net income reported by Ashley's Accessory Shop for the year was

Accepted Answer

A)  $80,000. 
B)  $100,000. 
C)  $130,000. 
D)  $110,000.

Question 12

Claims of creditors and owners on the assets of a business are called liabilities.

Accepted Answer

A) True 
 B)False

Question 13

U.S. standards are referred to as

Accepted Answer

A)  IFRS. 
B)  GAAP. 
C)  IASB. 
D)  FASB.

Question 14

On June 1, 2014, Shaw Company prepared a balance sheet that shows the following:  Shortly thereafter, all of the assets were sold for cash.
How would the balance sheet appear immediately after the sale of the assets for cash for each of the following cases?

Accepted Answer

The answer of On June 1, 2014, Shaw Company prepared...

Question 15

Information in the notes to the financial statements has to be quantifiable (numeric).

Accepted Answer

A) True 
 B)False

Question 16

Finney Company began the year by issuing $40,000 of common stock for cash. The company recorded revenues of $370,000, expenses of $320,000, and paid dividends of $20,000. What was Finney's net income for the year?

Accepted Answer

A)  $30,000 
B)  $70,000 
C)  $50,000 
D)  $90,000

Question 17

An income statement shows

Accepted Answer

A)  revenues, liabilities, and stockholders' equity. 
B)  expenses, dividends, and stockholders' equity. 
C)  revenues, expenses, and net income. 
D)  assets, liabilities, and stockholders' equity.

Question 18

The majority of U.S. business is transacted by proprietorships.

Accepted Answer

A) True 
 B)False

Question 19

The cost of assets consumed or services used is also known as

Accepted Answer

A)  a revenue. 
B)  an expense. 
C)  a liability. 
D)  an asset.

Question 20

The best definition of assets is the

Accepted Answer

A)  cash owned by the company. 
B)  collections of resources belonging to the company and the claims on these resources. 
C)  owners' investment in the business. 
D)  resources belonging to a company that have future benefit to the company.

Exam 1: Introduction to Financial Statements

The United States and the international standard-setting environment are primarily driven by meeting the needs of

John Tate is the bookkeeper for Gabelli Company. John has been trying to get the balance sheet of Gabelli Company to balance. It finally balanced, but now he's not sure it is correct. Instructions Prepare a correct balance sheet.

How are each of the following financial statements interrelated? (a) Retained earnings statement and income statement. (b) Retained earnings statement and balance sheet. (c) Balance sheet and statement of cash flows.

Corporate stockholders generally pay higher taxes but have no personal liability.

Compute the missing amount in each category of the accounting equation.

Financial accounting ethics violations are

Which of the following is the most appropriate and modern definition of accounting?

Ashley's Accessory Shop started the year with total assets of $140,000 and total liabilities of $80,000. During the year the business recorded $220,000 in revenues, $110,000 in expenses, and dividends of $40,000. The net income reported by Ashley's Accessory Shop for the year was

Claims of creditors and owners on the assets of a business are called liabilities.

U.S. standards are referred to as

On June 1, 2014, Shaw Company prepared a balance sheet that shows the following: Shortly thereafter, all of the assets were sold for cash. How would the balance sheet appear immediately after the sale of the assets for cash for each of the following cases?

Information in the notes to the financial statements has to be quantifiable (numeric).

Finney Company began the year by issuing $40,000 of common stock for cash. The company recorded revenues of $370,000, expenses of $320,000, and paid dividends of $20,000. What was Finney's net income for the year?

An income statement shows

The majority of U.S. business is transacted by proprietorships.

The cost of assets consumed or services used is also known as

The best definition of assets is the