Exam 1: Introduction to Financial Statements

Which of the following are internal reports that accounting provides to internal users?

A business organized as a separate legal entity is a

External users want answers to all of the following questions except

Sleep Cheap is a private camping ground near the Boulder Peak Recreation Area. It has compiled the following financial information as of December 31, 2014. Services revenues (from camping fees) \ 132,000 Dividends \ 8,000 Sales revenues (from general store) 25,000 Notes payable 50,000 Accounts payable 13,000 Administrative expenses 133,000 Cash 13,500 Supplies 2,500 Equipment 108,000 Common stock 40,000 Retained earnings (1/1/2014) 5,000 Instructions (a) Determine net income from Sleep Cheap for 2014. (b) Prepare a retained earnings statement and a balance sheet for Sleep Cheap as of December 31, 2014.

Notes to the financial statements

Which financial statement would best indicate whether the company relies on debt or stockholders' equity to finance its assets?

The basic accounting equation states that Assets = Liabilities.

A business organized as a separate legal entity owned by stockholders is a ___________.

External users of accounting information are managers who plan, organize, and run a business.

Why would it be safer for a wealthy individual to set up his or her business as a corporation rather than as a proprietorship or partnership?

A business organized as a corporation

Use the following accounts and information to prepare, in good form, an income statement and a retained earnings statement, for the month of August and a balance sheet at August 31, 2014 for Pierce Industries.

The retained earnings statement shows all of the following except

Which of the following is an advantage of corporations relative to partnerships and sole proprietorships?

If total liabilities increased by $75,000 and stockholders' equity increased by $25,000 during a period of time, then total assets must change by what amount and direction during that same period?

If total liabilities decreased by $50,000 and stockholders' equity increased by $10,000 during a period of time, then total assets must change by what amount and direction during that same period?

Identify which of the following accounts appear on a balance sheet.

Elston Company compiled the following financial information as of December 31, 2014: Service revenue \ 700,000 Common stock 150,000 Equipment 200,000 Operating expenses 625,000 Cash 175,000 Dividends 50,000 Supplies 25,000 Accounts payable 100,000 Accounts receivable 75,000 Retained earnings, 1/1/14375,000 Elston's stockholders' equity on December 31, 2014 is

Which of the following is not one of the three forms of business organization?

An auditor is an accounting professional who conducts an independent examination of the accounting data presented by a company.