Question 1

Peru Corporation paid $40,000 cash to purchase land.

Accepted Answer

The answer of Peru Corporation paid $40,000 cash to purchase...

Question 2

Dividends that a company pays to its stockholders are treated as an expense of the business.

Accepted Answer

A) True 
 B)False

Question 3

During the year,MNO Company issued common stock to stockholders for $5,000; purchased land for $1,000 cash; provided services to customers for $4,000; paid cash operating expenses of $3,100; and paid cash dividends of $500 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).

Accepted Answer

The answer of During the year,MNO Company issued common stock...

Question 4

What was the cash flow from investing activities?

Accepted Answer

A)  an outflow of $15,000 
B)  an outflow of $19,000 
C)  an inflow of $65,000 
D)  an outflow of $23,000

Question 5

The four financial statements prepared by a business are not interrelated.

Accepted Answer

A) True 
 B)False

Question 6

Gomez Corporation paid rent for the month in the amount of $1,400.

Accepted Answer

The answer of Gomez Corporation paid rent for the month...

Question 7

The balance sheet reports a business's assets and the claims to those assets.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following groups has primary responsibility for establishing generally accepted accounting principles for businesses in the United States?

Accepted Answer

A)  the US Congress 
B)  the Securities and Exchange Commission 
C)  the Financial Accounting Standards Board 
D)  the Internal Revenue Service

Question 9

Ohio Company provided services to a customer for $1,700 cash.As a result of this event,

Accepted Answer

A)  total assets decreased. 
B)  total liabilities increased. 
C)  retained earnings increased. 
D)  cash flows from financing activities increased.

Question 10

Net income is an increase in assets as a result of operating a business.

Accepted Answer

A) True 
 B)False

Question 11

The amount of land owned by a business appears on which financial statement?

Accepted Answer

A)  income statement 
B)  statement of changes in stockholders' equity 
C)  statement of cash flows 
D)  balance sheet

Question 12

Which of the following transactions is an asset source transaction?

Accepted Answer

A)  acquired office supplies by signing a short-term note payable 
B)  paid cash to purchase land 
C)  paid cash for operating expenses 
D)  paid cash dividends to owners

Question 13

The historical cost concept requires that most assets be reported at the amount paid for them.

Accepted Answer

A) True 
 B)False

Question 14

Generally accepted accounting principles (GAAP)are measurement rules for

Accepted Answer

A)  managerial accounting. 
B)  financial accounting. 
C)  tax accounting. 
D)  determining the market rate of return on a company's stock.

Question 15

Warren Corporation acquired cash by issuing common stock to investors.

Accepted Answer

The answer of Warren Corporation acquired cash by issuing common...

Question 16

Which of the following items would appear in the financing activities section of a statement of cash flows?

Accepted Answer

A)  received cash revenue from customers 
B)  paid cash for dividends 
C)  purchased equipment for cash 
D)  paid cash for utility bill

Question 17

STU Company borrowed $32,000 of cash from a local bank.Which of the following choices accurately reflects how this event would affect the company's financial statements?

Accepted Answer

A)  Choice A 
B)  Choice B 
C)  Choice C 
D)  Choice D

Question 18

In 1998,Parker Corporation purchased land for $130,000.In 2010,Parker Company had the land appraised,and its value was estimated to be $190,000.Also during 2010,another company offered Parker $145,000 for the parcel of land.When the balance sheet is prepared at the end of 2010,at what dollar amount should the land be reported?

Accepted Answer

A)  $190,000 
B)  $145,000 
C)  $130,000 
D)  None of these

Question 19

Rowena Company spent cash to purchase equipment.As a result of this event,

Accepted Answer

A)  total liabilities increased. 
B)  total assets increased. 
C)  net income increased. 
D)  total assets were unchanged.

Question 20

Farmington Corporation acquired cash by issuing common stock to investors.

Accepted Answer

The answer of Farmington Corporation acquired cash by issuing common...

Exam 1: An Introduction to Accounting

Peru Corporation paid $40,000 cash to purchase land.

Dividends that a company pays to its stockholders are treated as an expense of the business.

What was the cash flow from investing activities?

The four financial statements prepared by a business are not interrelated.

Gomez Corporation paid rent for the month in the amount of $1,400.

The balance sheet reports a business's assets and the claims to those assets.

Which of the following groups has primary responsibility for establishing generally accepted accounting principles for businesses in the United States?

Ohio Company provided services to a customer for $1,700 cash.As a result of this event,

Net income is an increase in assets as a result of operating a business.

The amount of land owned by a business appears on which financial statement?

Which of the following transactions is an asset source transaction?

The historical cost concept requires that most assets be reported at the amount paid for them.

Generally accepted accounting principles (GAAP) are measurement rules for

Warren Corporation acquired cash by issuing common stock to investors.

Which of the following items would appear in the financing activities section of a statement of cash flows?

STU Company borrowed $32,000 of cash from a local bank.Which of the following choices accurately reflects how this event would affect the company's financial statements?

Rowena Company spent cash to purchase equipment.As a result of this event,

Farmington Corporation acquired cash by issuing common stock to investors.