Exam 1: Accounting in Action

Retained earnings at the end of the period is equal to

If total liabilities decreased by $30,000 and stockholders' equity decreased by $20,000 during a period of time, then total assets must change by what amount and direction during that same period?

If expenses are paid in cash, then

Martin Corporation purchased land in 2010 for $290,000. In 2018, it purchased a nearly identical parcel of land for $460,000. In its 2018 balance sheet, Martin valued these two parcels of land at a combined value of $920,000. By reporting the land in this manner, Martin Corp. has violated the

Bookkeeping differs from accounting in that bookkeeping primarily involves which part of the accounting process?

In the retained earnings statement, revenues are listed first, followed by expenses, and net income (or net loss).

Accountants do not have to worry about issues of ethics.

The study of accounting is not useful for a business career unless your career objective is to become an accountant.

Which one of the following is not an external user of accounting information?

The ________________ reports the assets, liabilities, and stockholders' equity of a business enterprise at a specific date. Answers to

Selected transactions for Mountain Goats Tree Service are listed below. 1. Sold common stock for cash to start business. 2. Paid for monthly advertising. 3. Purchased supplies on account. 4. Billed customers for services performed. 5. Paid cash dividends. 6. Received cash from customers billed in (4). 7. Incurred utilities expense on account. 8. Purchased additional supplies for cash. 9. Received cash from customers when service was performed. Instructions List the numbers of the above transactions and describe the effect of each transaction on assets, liabilities, and stockholders' equity. For example, the first answer is: (1) Increase in assets and increase in stockholders' equity.

Black Keys Company began the year with stockholders' equity of $280,000. During the year, the company recorded revenues of $375,000, expenses of $285,000, and paid dividends of $30,000. What was Black Keys' stockholders' equity at the end of the year?

The basic accounting equation may be expressed as

Indicate which of these items is an asset (A), liability (L) or stockholders' equity (SE) account.

The private sector organization involved in developing accounting principles is the

Which of the following events cannot be quantified into dollars and cents and recorded as an accounting transaction?

One item is omitted in each of the following summaries of balance sheet and income statement data for three different sole corporations, X, Y, and Z. Determine the amounts of the missing items, identifying each corporation by letter.

Liabilities of a company would not include

The study of accounting will be useful only if a student is interested in working for a profit-oriented business firm.

Stockholders' equity is decreased by