Exam 1: Business Decisions and Financial Accounting

The daily activities involved in running a business,such as buying supplies and paying salaries and wages,are classified as operating activities on the statement of cash flows.

Pizza Aroma delivered $500 of pizzas to the local high school,but hasn't received payment yet.Pizza Aroma will report:

You paid $10,000 to buy 1% of the stock in a corporation that is now bankrupt.The company owes $10 million dollars to its creditors.As a result of the bankruptcy,you are responsible for paying $100,000 (or $10 million × 1%)of the amount owed to the creditors.

A creditor might look at a company's financial statements to determine if the:

Creditors are mainly interested in the profitability of a company.

Which of these appears on both the income statement and the statement of retained earnings?

Cash activity with stockholders and creditors,such as banks,are reported as cash flows from ______ activities on the statement of cash flows.

The Statement of Cash Flows for the current year contained the following: The change in cash for the current year was an increase of $14,000. -Use the information above to answer the following question.What is the amount of cash flows from (used in)financing activities?

In the U.S.,public companies have to be audited by independent auditors using rules approved by the:

Maxine's Bakery recorded $220,000 in revenues, $165,000 in expenses, and $30,000 of dividends for the year.The company began the year with total assets of $190,000 and stockholder's equity of $87,000. -Use the information above to answer the following question.What net income (loss)was reported by Maxine's Bakery for the year?

A company started the year with the following: Assets $100,000; Liabilities $30,000; Common Stock $60,000; Retained Earnings $10,000.During the year, the company earned revenue of $5,000, all of which was received in cash, and incurred expenses of $3,000, all of which were unpaid as of the end of the year.In addition, the company paid dividends of $1,000 to owners.Assume no other activities occurred during the year. -Use the information above to answer the following question.The amount of liabilities at the end of the year is

Universal Corp.has beginning Retained Earnings of $80,000,cash flows from operating activities during the current year of $35,000,dividends paid during the year of $5,000,net income for the current year of $50,000,and Common Stock at the end of the year of $15,000.What is the amount of its Retained Earnings at the end of the year?

The Securities and Exchange Commission (SEC)is the government agency that has primary responsibility for setting accounting standards in the U.S.

The Sarbanes-Oxley Act is a set of laws established to:

Which of the following are the three basic elements of the balance sheet?

Use the following information to answer questions 130 - 132: A company's financial records at the end of the year including the following amounts: -Use the information above to answer the following question.What is the amount of net income on the income statement for the year?

A company started the current year with assets of $700,000, liabilities of $350,000 and common stock of $200,000.During the current year, assets increased by $400,000, liabilities decreased by $50,000 and common stock increased by $275,000.There was no payment of dividends to owners during the year. -Use the information above to answer the following question.What was the amount of net income for the year?

-Use the information above to answer the following question.What is the missing amount for Total Liabilities?

Mauricio invested $30,000 in Pizza Aroma in exchange for its stock.Pizza Aroma now has:

Which transaction would be reported on the income statement for the current year?