Exam 1: Accounting in Business

A company reported total equity of $145,000 at the beginning of the year.The company reported $210,000 in revenues and $165,000 in expenses for the year.Liabilities at the end of the year totaled $92,000.What are the total assets of the company at the end of the year?

Explain why ethics are an integral part of accounting.

Owner's withdrawals are expenses.

Cool Tours had beginning equity of $72,000; revenues of $90,000,expenses of $65,000,and withdrawals by owners of $9,000.Calculate the ending equity.

What distinguishes liabilities from equity?

The International Accounting Standards Board (IASB)is the government group that establishes reporting requirements for companies that issue stock to the public.

Risk is:

Classify the following activities according to the appropriate section of the statement of cash flows. a.Operating activity b.Investing activity c.Financing activity ____ 1.Cash received from a one-time sale of used office equipment. ____ 2.Cash paid for withdrawals by owners. ____ 3.Cash received from customers. ____ 4.Cash received from owner contributions. ____ 5.Cash paid for utilities. ____ 6.Cash paid for a delivery van to be used in the business.

Identify the risk and the return in each of the following examples. a.Investing $500 in a CD at 4.5% interest. b.Placing a $100 bet on an NBA game. c.Investing $10,000 in Microsoft stock. d.Borrowing $20,000 in student loans.

The statement of cash flows shows the net effect of revenues and expenses for a reporting period.

________________ activities are the means organizations use to pay for resources such as land,building,and equipment.

Photometer Company paid off $30,000 of its accounts payable in cash.What would be the effects of this transaction on the accounting equation?

A balance sheet lists:

______________ is the area of accounting aimed at serving external users.

If the assets of a business increased $89,000 during a period of time and its liabilities increased $67,000 during the same period,equity in the business must have:

Operating activities:

The ________________ assumption states that transactions and events are expressed in money units.

The rule that (1)requires revenue to be recognized at the time it is earned,(2)allows the inflow of assets associated with revenue to be in a form other than cash,and (3)measures the amount of revenue as the cash plus the cash equivalent value of any noncash assets received from customers in exchange for goods or services,is called the:

The income statement reports all of the following except:

The purchase of supplies appears on the statement of cash flows as an investing activity because it involves the purchase of assets.