Exam 1: An Introduction to Accounting

Walsh Co. paid a $50,000 cash dividend to its owners.

The transactions listed below apply to Lovell Company for its first year in business. Assume that all transactions involve the receipt or payment of cash. Transactions for the year 2012: 1) Issued common stock to investors for $15,000 cash. 2) Borrowed $8,000 from the local bank. 3) Provided services to customers for $18,000. 4) Paid expenses amounting to $11,400. 5) Purchased a plot of land costing $12,000. 6) Paid a dividend of $6,000 to its stockholders. 7) Repaid $4,000 of the loan listed in item 2. Required: (a) Fill in the headings to the accounting equation shown below. (b) Show the effects of the above transactions on the accounting equation

If the total equity claimed by owners of Ping Construction is $50,000 and liabilities are $25,000, what are total assets?

Briefly distinguish between financial accounting and managerial accounting.

"IASB" stands for

Falcon Company earned $15,000 of cash revenue. Which of the following choices accurately reflects how this event affects the company's financial statements?

Richardson Company paid $850 cash for rent expense. As a result of this business event,

Indicate whether each of the following statements about liabilities is true or false. _______ a) A net loss on the income statement decreases liabilities. _______ b) The acquisition of a bank loan increases both assets and liabilities. _______ c) The accounting equation requires that liabilities be equal to equity. _______ d) The amount of a company's liabilities is equal to (assets - equity). _______ e) Liabilities are reported on the statement of cash flows of a business.

What is meant by the term "stakeholders?"

Which of the following statements is true?

The following events occurred for Jarvis Company during 2012, its first year in operation: 1. issued stock to investors for $35,000 cash 2. borrowed $15,000 cash from the local bank 3. provided services to its customers and received $22,000 cash 4. paid expenses of $18,000 5. paid $12,000 cash for land 6. paid dividend of $2,000 to stockholders 7. repaid $2,000 of the loan listed in item 2 Required: Show the effects of the above transactions on the accounting equation, below. Include dollar amounts of increases and decreases. The first is done for you. After entering all the events, calculate the total amounts of assets, liabilities, and equity at the end of the year.

As of December 31, 2013, Bloch Company had $3,800 of assets, $1,600 of liabilities and $700 of retained earnings. The balance in the common stock account on the December 31, 2013 balance sheet was

A business and the person who owns the business are separate reporting entities.

The amount of retained earnings on Petras's 2013 balance sheet is

What is meant by the term "global GAAP"? How does it impact U.S. companies? What body is responsible for setting global standards?

The following transactions apply to the Grant Corporation for 2013, its first year in business. 1) Issued stock to investors, $24,000. 2) The company borrowed $21,000 cash from the bank. 3) Services were provided to customers and $24,000 cash was received. 4) The company loaned $5,000 to another company. 5) The company acquired land for $22,000. 6) The company paid $12,000 rent for the building where it does its business. 7) The company paid $1,600 for supplies that were used during the period. 8) The company sold the land acquired in item 5 for $22,000. 9) A dividend of $5,000 was made to the owners. 10) Repaid $10,000 of the loan described in item 2. Required: Prepare a statement of cash flows for 2013.

Cohen Company experienced an accounting event that affected its financial statements as indicated below: Which of the following accounting events could have caused these effects on Cohen's statements?

Varghese Company paid cash to purchase land. As a result of this accounting event

A business's creditors have a priority claim to its assets in the event of liquidation.

From what three sources does a business obtain its assets?