Exam 1: Business Decisions and Financial Accounting

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.Based on this information,what was the amount of retained earnings at the beginning of the year?

Building a new warehouse is an operating activity on the statement of cash flows.

Financial statements are a key source of information useful to external users.The quality of relevance in financial information contributes to its usefulness.Along with relevance which of the following attributes is a primary element of useful financial information?

A legal document called a stock certificate is used to indicate ownership in a:

An investor who is looking at a company's financial statements cannot determine whether the:

A company incurred $5,000 in wages for employees for the year.Of these wages,$4,500 was paid by the end of the year.Which of the following statements is correct?

-Use the information above to answer the following question.What amount is represented by letter L in the statement of cash flows?

Which of the following is not an expense?

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 was the amount of cash flows from (used in)investing activities?

Dividends are reported on the:

The owner is not responsible for the entity's taxes and debts if the entity is organized as a(n):

The following partially completed balance sheet is missing numerical data. Required: Fill in the missing amounts in the balance sheet.

Financial statements are most commonly prepared:

The amount of beginning retained earnings is equal to the:

Which of the following statements concerning financial reporting is correct?

Which of the following statements about the accounting standards used in other countries is correct?

Which of the following statements about organizational forms of a business is not correct?

Investors are often interested in the amount of net income distributed as dividends.Where would investors look for this information in the company's annual report?

The first year of operations for a company was Year 1.The net income for the year Year 1 was $20,000 and dividends of $12,000 were paid.In Year 2, the company reported net income of $34,000 and paid dividends of $5,000.At the end of Year 1, the company had total assets of $150,000.At the end of Year 2, the company had total assets of $240,000. -Use the information above to answer the following question.What is the amount of retained earnings at the end of Year 2?

Which of the following would be reported on the income statement for Year 2?