Exam 2: Investing and Financing Decisions and the Balance Sheet

A corporation has $80,000 in total assets,$36,000 in total liabilities,and a $12,000 credit balance in retained earnings.What is the balance in the contributed capital account?

The Pioneer Company has provided the following account balances: Cash $38,000; Short-term investments $4,000; Accounts receivable $6,000; Inventory $48,000; Long-term notes receivable $2,000; Equipment $96,000; Factory Building $180,000; Intangible assets $6,000; Accounts payable $30,000; Accrued liabilities payable $4,000; Short-term notes payable $14,000; Long-term notes payable $92,000; Contributed capital $180,000; Retained earnings $60,000. What are Pioneer's total current assets?

At the beginning of April,Warren Corporation's assets totaled $240,000 and liabilities totaled $60,000.During April the following summarized transactions occurred: Additional shares of stock were sold for $20,000 cash. A building costing $95,000 was purchased using $10,000 cash and by signing an $85,000 long-term note payable. Short-term investments costing $9,000 were purchased using cash. $10,000 was lent to an employee; the employee signed a six-month note in exchange for the loan. How much are Warren's total assets at the end of April?

Where would changes in stockholders' equity resulting from operations be reported?

Which of the following statements is false?

The current assets section of a balance sheet includes both inventory and accounts receivable.

For each of the following accounts,indicate whether the account is an asset (A),liability (L),or stockholders' equity (SE)and whether the account usually has a debit (Dr)or credit (Cr)balance. 1. Inventory 2. Accounts receivable 3. Contributed Capital 4. Prepaid expenses 5. Wages payable 6. Property and equipment 7. Retained Earnings 8. Accounts payable , 7 , 1 , 3 , 8 , 2 , 6 , 5 , 4

For each of the transactions listed below,indicate whether it is an investing (I)or financing (F)activity on the statement of cash flows.Also,indicate if the transaction increases (+)or decreases (-)cash. Transaction Type of Activity Effect on Cash Ex. Paid dividends to the owners F - A. Purchased equipment to use in the business. B. Issued stock for cash. C. Borrowed money at the bank. D. Sold a piece of land adjacent to the plant. E. Paid the principal balance of a note payable.

Which of the following would result when a company pays a previously declared cash dividend?

For each of the accounts listed below,indicate whether the typical or normal balance is a debit or credit. 1. Unearned revenue 2. Accounts receivable 3. Retained earnings 4. Prepaid insurance 5. Notes payable 6. Contributed capital 7. Accounts payable 8. Land 9. Inventory 10. Equipment Debit 9 Credit 5 Credit 3 Debit 10 Debit 4 Debit 2 Debit 8 Credit 6 Credit 7 Credit 1

The current ratio measures the ability of a company to pay its short-term obligations with short-term assets.

What is the primary objective of financial reporting?

Which of the following statements about stockholders' equity is false?

Which of the following statements is correct?

In order for information to be reliable the information needs to be provided on a timely basis.

Which of the following does not correctly describe a business transaction?

Which of the following direct effects on the accounting equation isn't possible as a result of a single business transaction?

A company's January 1,2010 balance sheet reported total assets of $150,000 and total liabilities of $60,000.During January 2010,the company completed the following transactions: (A)paid a note payable using $10,000 cash (no interest was paid); (B)collected a $9,000 accounts receivable; (C)paid a $5,000 accounts payable; and (D)purchased a truck for $5,000 cash and by signing a $20,000 note payable from a bank.The company's January 31,2010 balance sheet would report which of the following? Assets Liabilities Stockholders’ Equity A. \ 150,000 \ 60,000 \ 90,000 B. \ 155,000 \ 65,000 \ 90,000 C. \ 160,000 \ 75,000 \ 85,000 D. \ 170,000 \ 100,000 \ 70,000

Which of the following transactions would result in a decrease in the current ratio?

Which of the following best describe financing activities?