Question 1

Tandem Company borrowed $32,000 of cash from a local bank.Which of the following choices accurately reflects how this event affects the accounting equation?
$\begin{array}{|c|c|c|c|c|c|c|c|}
\hline & \text { Assets } & = & \text { Liabilities } & + & \begin{array}{c}
\text { Common } \
\text { Stock }
\end{array} & + & \begin{array}{c}
\text { Retained } \
\text { Earnings }
\end{array} \
\hline \text { A } & \text { NA } & = & 32,000 & + & \text { NA } & + & 32,000 \\hline \mathrm{B} . & 32,000 & = & \mathrm{NA} & + & 32,000 & + & \mathrm{NA} \
\hline \mathrm{C} . & 32,000 & = & \mathrm{NA} & + & \mathrm{NA} & + & 32,000 \
\hline \mathrm{D} . & 32,000 & = & 32,000 & + & \mathrm{NA} & + & \mathrm{NA} \
\hline
\end{array}$

Accepted Answer

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

Question 2

Jackson Company paid $500 cash for salary expenses.Which of the following accurately reflects how this event affects the company's accounting equation?
$\begin{array}{|c|c|c|c|c|c|}
\hline & \text { Assets } & = & \text { Liab. } & + & \text { Equity } \
\hline \text { A } & 500 & = & 500 & + & \text { NA } \
\hline \text { B. } & (500) & = & \text { NA } & + & (500) \
\hline \text { C. } & (500) & = & (500) & + & \text { NA } \
\hline \text { D. } & (500) & = & \text { NA } & + & 500 \
\hline
\end{array}$

Accepted Answer

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

Question 3

Chico Company experienced an accounting event that affected its accounting equation as indicated below:
$$\begin{array} { | c | c | c | c | c | c | c | } 
\hline \text { Assets } & = & \text { Liabilities } & + & \begin{array} { c } 
\text { Commnn } \
\text { Strok }
\end{array} & + & \begin{array} { c } 
\text { Retained } \
\text { Eurnings }
\end{array} \
\hline + & = & \text { NA } & + & + & + & \text { NA } \
\hline
\end{array}$$
Which of the following accounting events could have caused these effects on Chico's statements?

Accepted Answer

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

Question 4

Which of the following cash transactions would not affect total assets?

Accepted Answer

A)  Borrowing cash from a bank 
B)  Issuing common stock for cash 
C)  Purchasing land for cash 
D)  Providing services for cash

Question 5

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 6

A business and the person who owns the business are separate reporting entities.

Accepted Answer

A) True 
 B)False

Question 7

Indicate whether each of the following statements about equity is true or false.
________ a)Expenses decrease retained earnings.
________ b)stockholders' equity and liabilities can be viewed either as sources of assets or claims to assets of the business.
________ c)Retained earnings is increased by loans received from a bank.
________ d)Dividends paid to stockholders decrease common stock.
________ e)Generally,assets are reported at the actual price paid for them when purchased regardless of subsequent changes in market value.

Accepted Answer

The answer of Indicate whether each of the following statements...

Question 8

International accounting standards are formulated by the IASB.What does that acronym stand for?

Accepted Answer

A)  Internationally Accepted Standards Board 
B)  International Accounting Standards Board 
C)  International Accountability Standards Bureau 
D)  International Accounting and Sustainability Board

Question 9

[The following information applies to the questions displayed below.]
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.
-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)  $400 
B)  $650 
C)  $350 
D)  $820

Question 10

Yi Company provided services to a customer for $5,500 cash.Based on this information alone,which of the following statements is true?

Accepted Answer

A)  Total assets increased and total equity decreased. 
B)  Total assets were unchanged. 
C)  Liabilities decreased and net income increased. 
D)  Total assets increased and net income increased.

Question 11

Which of the following describes the effects of an asset use transaction on the accounting equation?
$\begin{array}{|c|c|c|c|c|c|}
\hline & \text { Assets } & = & \text { Liab. } & + & \text { Equity } \
\hline \mathrm{A} & + & = & + & + & \text { NA } \
\hline \mathrm{B} & - & = & \mathrm{NA} & + & - \\hline \mathrm{C} . & +- & = & \mathrm{NA} & + & \mathrm{NA} \
\hline \mathrm{D} . & \mathrm{NA} & = & + & + & \mathrm{NA} \
\hline
\end{array}$

Accepted Answer

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

Question 12

Which of the following would not describe the effects of an asset source transaction on the accounting equation?
$$\begin{array} { | l | c | l | c | c | c | c | c | } 
\hline & \text { Assets } & = & \text { Linbilities } & + & \begin{array} { c } 
\text { Corrunon } \
\text { Strek }
\end{array} & + & \begin{array} { c } 
\text { Retained } \
\text { Earnings }
\end{array} \
\hline \text { A } & + & = & + & + & \text { NA } & + & \text { NA } \
\hline \text { B. } & + & = & \text { NA } & + & \text { NA } & + & + \
\hline \text { C. } & + & = & \text { NA } & + & + & + & \text { NA } \
\hline \text { D. } & + - & = & \text { NA } & + & \text { NA } & + & \text { NA } \
\hline
\end{array}$$

Accepted Answer

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

Question 13

Chow Company earned $1,500 of cash revenue,paid $1,200 for cash expenses,and paid a $200 cash dividend to its owners.Which of the following statements is true?

Accepted Answer

A)  The net cash inflow from operating activities was $100. 
B)  The net cash outflow for investing activities was $200. 
C)  The net cash inflow from operating activities was $300. 
D)  The net cash outflow for investing activities was $100.

Question 14

A net loss occurs when

Accepted Answer

A)  expenses are greater than revenues 
B)  liabilities are greater than assets 
C)  cash inflow is less than cash outflow 
D)  the ending cash balance is lower than the beginning cash balance

Question 15

Liabilities are reported on which of the following financial statement(s)?

Accepted Answer

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

Question 16

The types of resources needed by a business are financial,physical,and labor resources.

Accepted Answer

A) True 
 B)False

Question 17

An asset source transaction increases a business's assets and the claims to assets.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following statements is false regarding managerial accounting information?

Accepted Answer

A)  It is often used by investors. 
B)  It is more detailed than financial accounting information. 
C)  It can include nonfinancial information. 
D)  It focuses on divisional rather than overall profitability.

Question 19

The statement of changes in stockholders' equity presents

Accepted Answer

A)  an explanation of the changes in the beginning and ending balances of stockholders' equity. 
B)  a comparison of the benefits and the sacrifices a company experiences from its operations. 
C)  information in three categories including operating, investing, and financing activities. 
D)  a list of a company's assets and the sources of those assets.

Question 20

[The following information applies to the questions displayed below.]
Lexington Company engaged in the following transactions during Year 1, its first year in operation: (Assume all transactions are cash transactions.)
1) Acquired $6,000 cash from issuing common stock.
2) Borrowed $4,400 from a bank.
3) Earned $6,200 of revenues.
4) Incurred $4,800 in expenses.
"5) Paid dividends of $800.
Lexington Company engaged in the following transactions during Year 2: (Assume all transactions are cash transactions.)"
1) Acquired an additional $1,000 cash from the issue of common stock.
2) Repaid $2,600 of its debt to the bank.
3) Earned revenues, $9,000.
4) Incurred expenses of $5,500.
5) Paid dividends of $1,280.
-What was the net cash flow from financing activities reported on Lexington's statement of cash flows for Year 2?

Accepted Answer

A)  $2,880 outflow 
B)  $2,880 inflow 
C)  $1,000 outflow 
D)  $1,000 inflow

Exam 1: An Introduction to Accounting

Which of the following cash transactions would not affect total assets?

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

A business and the person who owns the business are separate reporting entities.

International accounting standards are formulated by the IASB.What does that acronym stand for?

Yi Company provided services to a customer for $5,500 cash.Based on this information alone,which of the following statements is true?

Chow Company earned $1,500 of cash revenue,paid $1,200 for cash expenses,and paid a $200 cash dividend to its owners.Which of the following statements is true?

A net loss occurs when

Liabilities are reported on which of the following financial statement(s) ?

The types of resources needed by a business are financial,physical,and labor resources.

An asset source transaction increases a business's assets and the claims to assets.

Which of the following statements is false regarding managerial accounting information?

The statement of changes in stockholders' equity presents