Exam 1: Accounting and The Financial Statements

A company with healthy cash flows from operating activities is in a good position to repay its debts.

Match each statement to the item listed below. -A set of reports that communicate a company's financial position and results of operations

A certain company began the year with total assets of $10,000,000 and total liabilities of $6,200,000. No additional stock was issued during the year. Use the accounting equation to answer the following questions. A)What was the amount of Total Assets at the end of the year if Liabilities decreased by $600,000 and Stockholders' Equity increased by $900,000? B)Was the company profitable? Explain your answer.

Which of the following items would not be reported on a multiple-step income statement after income from operations?

In the independent auditors' report included with the annual report, management discusses the financial statements and provides the shareholders with explanations for certain amounts reported in the statements.

Match each statement to the item listed below. -An accounting period that may or may not cover January 1 - December 31

You are a potential creditor and are concerned that a particular company you are ready to give a loan to might have too much debt. Which financial statement would provide you information needed in order to evaluate your concern?

Which one of the following is not one of the three business activities?

-Refer to Bellweather Times. By what amount will net income on a single-step income statement differ from net income on a multiple-step income statement if the company prepares both formats?

Match each statement to the item listed below. -Cash and other resources that are expected to become cash or used up within a year's time or less

A question frequently asked by investors is, "How much debt does this company have?" Which financial statement answers this question?

____________________ is a liquidity measure that is calculated by subtracting current assets from current liabilities.

Several items from the financial statements of Fireside Tires are listed. Use the following choices to identify the type of account for each item listed. (Choices may be used more than once.) -Unearned revenue

The company reported the following information for the year ended December 31, 2019: -Refer to Beard Marine. What was the balance of Retained Earnings at January 1, 2019?

Baloon-E-Tunes -Refer to Baloon-E-Tunes. Calculate the amount of working capital. What can you learn from the current ratio that you cannot learn from the amount of working capital?

The Statement of Cash Flows, like the Income Statement, reports only operating activities and other activities of a company.

-Refer to Bellweather Times. What is the company's income from operations?

What is the primary objective of financial reporting?

The accountant prepared the following list of account balances from the company's records for the year ended December 31, 2019.Sales Revenue -Prepare an Income Statement for Backus Tractor Sales in good form.

The following balance sheet information is provided: ? A)What is the amount of Stockholders' Equity at January 1, 2019? B)What is the amount of Liabilities at December 31, 2019? C)Assume that the company paid dividends of $620,000 during the year. How much net income did it earn during the year? D)Assume that the company paid no dividends during the year. Without looking at the income statement, how can you tell if the company is profitable or not?