Question 1

Which of the following shows the effects of providing services for cash on the accounting equation?

Accepted Answer

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

Question 2

When a business provides services for cash, what is the effect on the accounting equation are affected?

Accepted Answer

A) Revenue and Expense 
B) Cash and Retained Earnings 
C) Cash and Expense 
D) Cash and Dividends

Question 3

The following is a partial set of financial statements prepared for the company's first year of operations. All transactions were for cash.
Required:Fill in the missing information by determining the amounts represented by letters a through d.

Accepted Answer

The answer of The following is a partial set of...

Question 4

Ballard Company reported assets of $500 and liabilities of $200. What amount will Ballard's report for stockholders' equity?

Accepted Answer

A) $300 
B) $500 
C) $700 
D) Cannot be determined.

Question 5

At the end of Year 2, retained earnings for the Baker Company was $3,500. Revenue earned by the company in Year 2 was $1,500, expenses paid during the period were $800, and dividends paid during the period were $500. Based on this information alone, what was the amount of retained earnings at the beginning of Year 2?

Accepted Answer

A) $3,300 
B) $3,700 
C) $2,800 
D) $3,800

Question 6

What is meant by the term "global GAAP"? How does it impact U.S. companies? What body is responsible for setting global standards?

Accepted Answer

The answer of What is meant by the term "global...

Question 7

Jackson Company had a net increase in cash from operating activities of $10,000 and a net decrease in cash from financing activities of $2,000. If the beginning and ending cash balances for the company were $4,000 and $11,000, what was the net cash change from investing activities?

Accepted Answer

A) An outflow or decrease of $1,000 
B) An inflow or increase of $2,000 
C) An inflow or increase of $1,000 
D) Zero

Question 8

Liabilities are not a source of assets for a business.

Accepted Answer

A) True 
 B)False

Question 9

The financial statements of Calloway Company prepared at the end of the current year contained the following elements and corresponding amounts: Assets = $50,000; Liabilities = ?; Common Stock = $15,000; Revenue = $22,000; Dividends = $1,500; Beginning Retained Earnings = $3,500; Ending Retained Earnings = $7,500. What was the amount of total liabilities reported on the balance sheet as of the end of the current year?

Accepted Answer

A) $27,500 
B) $31,500 
C) $35,000 
D) $42,500

Question 10

Packard Company engaged in the following transactions during Year 1, its first year of operations: (Assume all transactions are cash transactions.) 1)Acquired $1,450 cash from the issue of common stock.2)Borrowed $920 from a bank.3)Earned $1,150 of revenues.4)Paid expenses of $350.5)Paid a $150 dividend.
During Year 2, Packard engaged in the following transactions: (Assume all transactions are cash transactions.)
1)Issued an additional $825 of common stock.2)Repaid $570 of its debt to the bank.3)Earned revenues of $1,250.4)Incurred expenses of $560.5)Paid dividends of $200.
What is the net cash inflow from operating activities that will be reported on Packard's statement of cash flows for Year 1?

Accepted Answer

A) $800 
B) $1,570 
C) $1,150 
D) $650

Question 11

Packard Company engaged in the following transactions during Year 1, its first year of 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 $650 of revenues.4)Paid expenses of $250.5)Paid a $50 dividend. During Year 2, Packard 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 amount of total liabilities on Packard's Year 1 balance sheet is

Accepted Answer

A) $200 
B) $340 
C) $420 
D) $670

Question 12

Li Company paid cash to purchase land.What happened as a result of this business event?

Accepted Answer

A) Total assets decreased. 
B) Total assets were unaffected. 
C) Total stockholders' equity decreased. 
D) Both total assets and total stockholders' equity decreased.

Question 13

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

Accepted Answer

A) Issued common stock. 
B) Paid cash expenses. 
C) Borrowed money from a bank. 
D) Paid a cash dividend.

Question 14

Algonquin Company reported assets of $50,000, liabilities of $22,000 and common stock of $15,000. Based on this information only, what is the amount of the company's retained earnings?

Accepted Answer

A) $7,000. 
B) $57,000. 
C) $13,000. 
D) $87,000.

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

Bates Company entered into the following transactions during its first year in business. Assume that all transactions involve the receipt or payment of cash.1)Issued common stock to investors for $25,000 cash.2)Borrowed $18,000 from the local bank.3)Provided services to customers for $28,000.4)Paid expenses amounting to $21,400.5)Purchased a plot of land costing $22,000.6)Paid a dividend of $15,000 to its stockholders.7)Repaid $12,000 of the loan listed in item 2.
Required:(a)Fill in the three column headings of the accounting equation in the first row of the table shown below.(b)Show the effects of the above transactions on the accounting equation.a. ________ = ________ + ________b.
Event Number1)2)3)4)5)6)7)

Accepted Answer

The answer of Bates Company entered into the following transactions...

Question 17

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

Accepted Answer

A) Income statement 
B) Balance sheet 
C) Statement of cash flows 
D) Statement of changes in stockholders' equity

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

Lexington Company engaged in the following transactions during Year 1, its first year in operation: (Assume all transactions are cash transactions.) Acquired $4,100 cash from issuing common stock.Borrowed $2,750 from a bank.Earned $3,650 of revenues.Incurred $2,510 in expenses.Paid dividends of $510.
Lexington Company engaged in the following transactions during Year 2: (Assume all transactions are cash transactions.)
Acquired an additional $1,050 cash from the issue of common stock.Repaid $1,685 of its debt to the bank.Earned revenues, $5,050.Incurred expenses of $2,970.Paid dividends of $1,300.
What is the amount of total assets that will be reported on Lexington's balance sheet at the end of Year 1?

Accepted Answer

A) $3,910 
B) $1,350 
C) $7,540 
D) $7,480

Question 20

Which of the following are shown on the income statement? Total assetsLandCommon StockNet Change in CashRevenueNotes PayableStockholders' EquityTotal Liabilities and Stockholders' EquityExpensesNet IncomeEnding cash balanceBeginning cash balanceDividends

Accepted Answer

A) a, b, c, f, g, h 
B) e, i, j 
C) d, e, i, j, m 
D) e, i, j, m

Exam 1: An Introduction to Accounting

Which of the following shows the effects of providing services for cash on the accounting equation?

When a business provides services for cash, what is the effect on the accounting equation are affected?

The following is a partial set of financial statements prepared for the company's first year of operations. All transactions were for cash. Required:Fill in the missing information by determining the amounts represented by letters a through d.

Ballard Company reported assets of $500 and liabilities of $200. What amount will Ballard's report for stockholders' equity?

What is meant by the term "global GAAP"? How does it impact U.S. companies? What body is responsible for setting global standards?

Jackson Company had a net increase in cash from operating activities of $10,000 and a net decrease in cash from financing activities of $2,000. If the beginning and ending cash balances for the company were $4,000 and $11,000, what was the net cash change from investing activities?

Liabilities are not a source of assets for a business.

Li Company paid cash to purchase land.What happened as a result of this business event?

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

Algonquin Company reported assets of $50,000, liabilities of $22,000 and common stock of $15,000. Based on this information only, what is the amount of the company's retained earnings?

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

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

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

Which of the following are shown on the income statement? Total assetsLandCommon StockNet Change in CashRevenueNotes PayableStockholders' EquityTotal Liabilities and Stockholders' EquityExpensesNet IncomeEnding cash balanceBeginning cash balanceDividends