Question 1

Accounts payable and notes payable are:

Accepted Answer

A)  Always less than the amount of cash a business owns. 
B)  Creditors. 
C)  Written promises to pay a certain amount, plus interest, at a definite future date. 
D)  Liabilities. 
A)  Always less than the amount of cash a business owns. 
B)  Creditors. 
C)  Written promises to pay a certain amount, plus interest, at a definite future date. 
D)  Liabilities. D

Question 2

At the beginning of October, owners' equity in Waldorf was $480,000. Given the transactions of October, 2011, what will owners' equity be at the end of the month?

Accepted Answer

A)  $480,000. 
B)  $484,000. 
C)  $502,500. 
D)  $580,500. 
A)  $480,000. 
B)  $484,000. 
C)  $502,500. 
D)  $580,500. B

Question 3

A set of financial statements:

Accepted Answer

A)  Is intended to assist users in evaluating the financial position, profitability, and future prospects of an entity. 
B)  Is intended to assist the IRS in determining the amount of income taxes owed by a business organization. 
C)  Includes notes disclosing information necessary for the proper interpreta?tion of the statements. 
D)  Is intended to assist investors and creditors in making decisions involving the allocation of economic resources. 
A)  Is intended to assist users in evaluating the financial position, profitability, and future prospects of an entity. 
B)  Is intended to assist the IRS in determining the amount of income taxes owed by a business organization. 
C)  Includes notes disclosing information necessary for the proper interpreta?tion of the statements. 
D)  Is intended to assist investors and creditors in making decisions involving the allocation of economic resources. A

Question 4

Complete the January 31, 20__, balance sheet of Countrywide Legal Services using the following information.
(1) Stockholders' equity at January 1, 20__, included capital stock of $140,000.
(2) The land and building were purchased by the business for a total price of $200,000 on January 25, 20__, from a company forced out of business. On January 31, an appraiser valued the property at $260,000.
(3) Additional capital stock was issued in exchange for $50,000 cash.
(4) Retained earnings at January 31, 20___, amounted to $49,400.

Accepted Answer

Computations:
a. Total assets must be eq

Question 5

A transaction caused a $60,000 increase in both assets and total liabilities. This transaction could have been which of the following?

Accepted Answer

A)  Purchase of office equipment for $60,000 cash. 
B)  Purchase of office equipment for $120,000, paying $60,000 cash and issuing a note payable for the balance. 
C)  Repayment of a $60,000 bank loan. 
D)  Investment of $60,000 cash in the business by the owner. 
A)  Purchase of office equipment for $60,000 cash. 
B)  Purchase of office equipment for $120,000, paying $60,000 cash and issuing a note payable for the balance. 
C)  Repayment of a $60,000 bank loan. 
D)  Investment of $60,000 cash in the business by the owner.

Question 6

If during the current year, liabilities of Corbett's Store increased by $220,000 and owners' equity increased by $160,000, then:

Accepted Answer

A)  Assets at the end of the year total $380,000. 
B)  Assets at the end of the year total $60,000. 
C)  Assets increased during the year by $380,000. 
D)  Assets decreased during the year by $60,000. 
A)  Assets at the end of the year total $380,000. 
B)  Assets at the end of the year total $60,000. 
C)  Assets increased during the year by $380,000. 
D)  Assets decreased during the year by $60,000.

Question 7

If Capital Stock is $320,000, total assets of Braun Corporation at December 31, 2009, amount to:

Accepted Answer

A)  $686,000. 
B)  $926,000. 
C)  $726,000. 
D)  $106,000. 
A)  $686,000. 
B)  $926,000. 
C)  $726,000. 
D)  $106,000.

Question 8

Which of the following is descriptive of the proper form of a balance sheet?

Accepted Answer

A)  The heading sets forth the period of time covered. 
B)  Cash is always the first asset listed, followed by permanent assets (such as land and buildings), and finally by assets such as receivables and supplies. 
C)  Liabilities are listed before owners' equity. 
D)  A subtotal for total assets plus total liabilities is shown. 
A)  The heading sets forth the period of time covered. 
B)  Cash is always the first asset listed, followed by permanent assets (such as land and buildings), and finally by assets such as receivables and supplies. 
C)  Liabilities are listed before owners' equity. 
D)  A subtotal for total assets plus total liabilities is shown.

Question 9

Any business event that might affect the future profitability of a business should be reported in its balance sheet.

Accepted Answer

A) True 
 B)False

Question 10

At the end of the current year, the owners' equity in Barclay Bakery is $246,000. During the year, the assets of the business had increased by $120,000 and the liabilities had increased by $72,000. Owners' equity at the beginning of the year must have been:

Accepted Answer

A)  $198,000. 
B)  $174,000. 
C)  $284,000. 
D)  $438,000. 
A)  $198,000. 
B)  $174,000. 
C)  $284,000. 
D)  $438,000.

Question 11

Computation of assets, liabilities, and owners' equity after a series of transactions. The December 31, 2009 balance sheet of Charles Realty reported total assets of $900,000, total liabilities of $350,000, and owners' equity of $550,000. The following transactions occurred in January of 2010:
(1) The business purchased land for $250,000, paying $100,000 cash and issuing a note payable for the balance.
(2) The business collected accounts receivable totaling $45,000.
(3) The business sold land costing $50,000 for $60,000 cash.
(4) The business paid $50,000 of the note payable.
Compute the following at January 31, 2010:
(A.) Total assets $__________
(B.) Total liabilities $__________
(C.) Owners' equity $__________

Accepted Answer

(A.) Total assets =

Question 12

Presented below is the balance sheet for Manhattan Family Dentistry on January 1 of the current year.
During the first few days of January, the following transactions occurred:
Jan 2 Equipment was purchased for $38,000 on credit.
2 The business collected $16,000 of its accounts receivable and paid $23,000 of its accounts payable.
3 The business borrowed $60,000 from the bank, giving a note payable due in 90 days.
3 Additional capital stock was issued in exchange for $27,000 cash.
Complete the following balance sheet for Manhattan Family Dentistry on January 4 of the current year.

Accepted Answer

Computations:
a $20,000 + $16,000 (A/R c

Question 13

Effects of transactions on balance sheet items
Show the effect of each of the seven listed transactions on the balance sheet items of Distinctive Draperies. Indicate the new balances after the transaction of May 2 and each subsequent transaction. The effects of the May 1 transaction are already filled in to provide you with an example.

Accepted Answer

The answer of Effects of transactions on balance sheet items
Show...

Question 14

A statement of cash flows for August, would report an increase in cash of:

Accepted Answer

A)  $26,000. 
B)  $32,400. 
C)  $40,000. 
D)  $46,400. 
A)  $26,000. 
B)  $32,400. 
C)  $40,000. 
D)  $46,400.

Question 15

If a transaction causes an asset account to decrease, which of the following related effects may occur?

Accepted Answer

A)  An increase of equal amount in an owners' equity account. 
B)  An increase in a liability account. 
C)  An increase of equal amount in another asset account. 
D)  An increase in the combined total of liabilities and owners' equity. 
A)  An increase of equal amount in an owners' equity account. 
B)  An increase in a liability account. 
C)  An increase of equal amount in another asset account. 
D)  An increase in the combined total of liabilities and owners' equity.

Question 16

An inexperienced accounting intern at Tasso Company prepared the following income statement for the month of July 2009:
Instructions: Prepare a revised income statement in accordance with generally accepted accounting principles.

Accepted Answer

The answer of An inexperienced accounting intern at Tasso Company...

Question 17

If $9,600 cash and a $31,000 note payable are given in exchange for some office machines to be used in a business:

Accepted Answer

A)  Total assets are increased. 
B)  Total liabilities are decreased. 
C)  Total assets are decreased. 
D)  The owners' equity is increased. 
A)  Total assets are increased. 
B)  Total liabilities are decreased. 
C)  Total assets are decreased. 
D)  The owners' equity is increased.

Question 18

A balance sheet:

Accepted Answer

A)  Provides owners, investors, and other interested parties with all the financial information they need to evaluate the financial strength, profitability, and future prospects of a given business entity. 
B)  Shows the current market value of the owners' equity in the business at the balance sheet date. 
C)  Assists creditors in evaluating the debt-paying ability of a business by showing the assets and liabilities of the business combined with those of its owner (or owners). 
D)  Shows the assets, liabilities, and owners' equity of a business entity, valued in conformity with generally accepted accounting principles. 
A)  Provides owners, investors, and other interested parties with all the financial information they need to evaluate the financial strength, profitability, and future prospects of a given business entity. 
B)  Shows the current market value of the owners' equity in the business at the balance sheet date. 
C)  Assists creditors in evaluating the debt-paying ability of a business by showing the assets and liabilities of the business combined with those of its owner (or owners). 
D)  Shows the assets, liabilities, and owners' equity of a business entity, valued in conformity with generally accepted accounting principles.

Question 19

A balance sheet is designed to show:

Accepted Answer

A)  How much a business is worth. 
B)  The profitability of the business during the current year. 
C)  The assets, liabilities, and owners' equity of a business as of a particular date. 
D)  The cost of replacing the assets and of paying off the liabilities at December 31. 
A)  How much a business is worth. 
B)  The profitability of the business during the current year. 
C)  The assets, liabilities, and owners' equity of a business as of a particular date. 
D)  The cost of replacing the assets and of paying off the liabilities at December 31.

Question 20

Which of the following transactions would cause a change in owners' equity?

Accepted Answer

A)  Repayment of the principal on a bank loan. 
B)  Purchase of a delivery truck on credit. 
C)  Sale of land on credit for a price above cost. 
D)  Borrowing money from a bank. 
A)  Repayment of the principal on a bank loan. 
B)  Purchase of a delivery truck on credit. 
C)  Sale of land on credit for a price above cost. 
D)  Borrowing money from a bank.

Exam 2: Basic Financial Statements

Accounts payable and notes payable are:

At the beginning of October, owners' equity in Waldorf was $480,000. Given the transactions of October, 2011, what will owners' equity be at the end of the month?

A set of financial statements:

A transaction caused a $60,000 increase in both assets and total liabilities. This transaction could have been which of the following?

If during the current year, liabilities of Corbett's Store increased by $220,000 and owners' equity increased by $160,000, then:

If Capital Stock is $320,000, total assets of Braun Corporation at December 31, 2009, amount to:

Which of the following is descriptive of the proper form of a balance sheet?

Any business event that might affect the future profitability of a business should be reported in its balance sheet.

At the end of the current year, the owners' equity in Barclay Bakery is $246,000. During the year, the assets of the business had increased by $120,000 and the liabilities had increased by $72,000. Owners' equity at the beginning of the year must have been:

A statement of cash flows for August, would report an increase in cash of:

If a transaction causes an asset account to decrease, which of the following related effects may occur?

An inexperienced accounting intern at Tasso Company prepared the following income statement for the month of July 2009: Instructions: Prepare a revised income statement in accordance with generally accepted accounting principles.

If $9,600 cash and a $31,000 note payable are given in exchange for some office machines to be used in a business:

A balance sheet:

A balance sheet is designed to show:

Which of the following transactions would cause a change in owners' equity?

Accounting: Information for Decision Making

The Accounting Cycle: Capturing Economic Events

The Accounting Cycle: Accruals and Deferrals

The Accounting Cycle: Reporting Financial Results

Merchandising Activities

Financial Assets

Inventories and the Cost of Goods Sold

Plant and Intangible Assets

Liabilities

Stockholders Equity: Paid-In Capital

Income and Changes in Retained Earnings

Statement of Cash Flows

Financial Statement Analysis

Global Business and Accounting

Management Accounting: a Business Partner

Job Order Cost Systems and Overhead Allocations

Process Costing

Costing and the Value Chain

Cost-Volume-Profit Analysis

Incremental Analysis

Responsibility Accounting and Transfer Pricing

Operational Budgeting

Standard Cost Systems

Rewarding Business Performance

Capital Budgeting

Forms of Business Organization

The Time Value of Money: Future Amounts and Present Values Answer Key

Filters