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Assets:


A) represent the amounts earned by a company.
B) must equal the liabilities of a company.
C) must equal the stockholders' equity of the company.
D) represent the resources owned by a company.

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Prepare a balance sheet using these data.

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Which inference may be considered incorrect concerning the Statement of Retained Earnings? Which inference may be considered incorrect concerning the Statement of Retained Earnings? A) Retained earnings of $350,500 will appear on the balance sheet as of December 31,2013. B) The net income in the above statement came from the income statement for the year ending December 31,2013. C) Dividends are shown in parentheses because they are distributions made by a company to its stockholders as a return on their investment. D) Retained earnings represents the amount of cash at the end of 2013.


A) Retained earnings of $350,500 will appear on the balance sheet as of December 31,2013.
B) The net income in the above statement came from the income statement for the year ending December 31,2013.
C) Dividends are shown in parentheses because they are distributions made by a company to its stockholders as a return on their investment.
D) Retained earnings represents the amount of cash at the end of 2013.

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Fill in the missing items in the balance sheet. Fill in the missing items in the balance sheet.

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What was the amount of retained earnings at the end of 2013?


A) $20,000.
B) $8,000.
C) $150,000.
D) $155,000.

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Which of the following items appear on more than one financial statement?


A) Ending cash and ending retained earnings.
B) Ending cash and beginning retained earnings.
C) Beginning cash and ending retained earnings.
D) Beginning cash and beginning retained earnings.

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The separate entity assumption means


A) the financial information depicts the economic substance of the business activities.
B) the financial reports of a business are assumed to include the results of only that business's activities.
C) the results of business activities are reported in an appropriate monetary unit.
D) the financial information can be compared across businesses because similar accounting methods have been applied.

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The statement of cash flows for a company contained the following: The statement of cash flows for a company contained the following: What was the change in cash for the period? A) $14,000 increase B) $15,000 increase C) $14,000 decrease D) $15,000 decrease What was the change in cash for the period?


A) $14,000 increase
B) $15,000 increase
C) $14,000 decrease
D) $15,000 decrease

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What is the amount of total assets at the end of 2014?


A) $16,800.
B) $16,500.
C) $21,600.
D) $23,500.

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A company's balance sheet contained the following information: A company's balance sheet contained the following information: Assume Notes Payable is the only other item on the balance sheet.Notes Payable must equal A) $200,000. B) $8,000. C) $72,000. D) $344,000. Assume Notes Payable is the only other item on the balance sheet.Notes Payable must equal


A) $200,000.
B) $8,000.
C) $72,000.
D) $344,000.

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Which of the following statements is FALSE?


A) Cash flows from financing activities would appear on the Statement of Cash Flows.
B) Dividends would appear on the Statement of Retained Earnings.
C) Assets would appear on the Income Statement.
D) Revenues would appear on the Income Statement.

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The three main types of business activities measured by financial statements are:


A) selling goods,selling services,and obtaining financing.
B) operating activities,investing activities,and financing activities.
C) hiring,producing,and advertising.
D) generating revenues,paying expenses,and paying dividends.

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In the statement of cash flows,what amount is represented by letter L?


A) $159,000
B) $85,000
C) ($85,000)
D) ($159,000)

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For the current year,the first year of operations,a company sold $100,000 of goods to customers and received $90,000 in cash from customers.The remainder is owed to the company at the end of the year.The company incurred $70,000 in expenses for the year and paid $65,000 of these in cash.The remainder is owed by the company at the end of the year.Based on this information,what is the amount of net income for the year?


A) $25,000
B) $35,000
C) $20,000
D) $30,000

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Which of the following is true about the format of financial statements?


A) A double underline is drawn below the subtotal for total liabilities on the balance sheet.
B) Dollar signs are omitted if the heading states that amounts are reported in U.S.dollars.
C) Dividends are reported in parentheses on the statement of retained earnings.
D) The heading of each financial statement indicates who,when,and what in that particular order.

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In the above statement of cash flows,what amount is represented by letter C?


A) $14,000
B) $10,000
C) (14,000)
D) 0

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Net income appears on which of the following financial statements?


A) Balance sheet and income statement.
B) Balance sheet and retained earnings statement.
C) Balance sheet and cash flow statement.
D) Income statement and retained earnings statement.

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Which of the following would be reported on the income statement for 2013?


A) Supplies that were purchased and used in 2012 but paid for in 2013.
B) Dividends that were paid in 2013.
C) Supplies that were purchased in 2012,but used in 2013.
D) Accounts receivable as of December 31,2013.

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Which of the following is true?


A) Companies can choose to end their fiscal year on any date they feel is most relevant.
B) Companies must end their fiscal year on March 31,June 30,September 30,or December 31.
C) Companies can select any date except a holiday to end their fiscal year.
D) Companies must end their fiscal year on December 31.

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Daily activities involved in running a business such as buying supplies and paying wages are operating activities.

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