Exam 1: Accounting and the Financial Statements

Provided is a list of important users of accounting information. Also provided are descriptions of a major need for accounting information that may be experienced by the various users. Identify the one user group that is most likely to have the need described. (Choices may be used more than once.) a.Investors b.Management c.Supplier d.Banker e.Government f.Employees g.Labor Union h.Investors and Banker i.Supplier and Banker -The ability of the company to pay its debts as they become due.

Determine the following amounts for Backus Tractor Sales:

On January 1, 2013, a company's balance in retained earnings was $275,000. During 2013, the company earned net income of $23,500 and paid $11,200 in dividends. Calculate the retained earnings balance at December 31, 2013.

Which one of the following equations represents the Statement of Retained Earnings activity?

Listed below are several amounts from the accounting records of Bike Links for the year ended December 31, 2013. Prepare a multiple-step income statement in good form.

What is the primary objective of financial reporting?

The independent auditor's report conveys whether or not the business is a good investment.

Most annual reports contain the following list of basic elements. For each element identify the person(s)who prepared the element and describe the information a user would expect to find in each element. Some information is verifiable, while other information is subjectively chosen by management. Indicate whether the information in each element is verifiable.

Match each statement to the item listed below. a.Current assets e.Intangible assets b.Current liabilities f.Long-term investments c.Gross margin g.Long-term liabilities d.Income from operations h.Net profit margin -Resources that provide a benefit over a number of years but which lack physical substance

Several items from the financial statements of Fireside Tires are listed. Use the following choices to identify the type of account for each item listed. (Choices may be used more than once.) a.Assets b.Liabilities c.Revenues d.Expenses e.Stockholders' Equity -Unearned revenue

-Refer to Baker's Pride Bakery.

B&B Painting reported the following information for the year ended December 31, 2013. How much was paid out in dividends in 2013?

If assets are expected to be realized in cash, sold, or consumed within the normal operating cycle of a business or within one year (if the operating cycle is shorter than one year), how are they reported on a classified balance sheet?

Which of the following are Noncurrent assets?

Current assets minus current liabilities is called ____________________.

Which of the following best describes a company's operating activities?

Which of the following items would not be reported on a multiple-step income statement after income from operations?

The Earnings Per Share measure appears on which of the following financial statements?

-Refer to Baloon-E-Tunes. Prepare the long-term asset section of the balance sheet at December 31, 2013. You may omit the heading. Why are these amounts classified as "long-term"?

The beginning balance of retained earnings was $800,000, and the ending balance was $500,000. The company paid dividends of $50,000.