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Exam 1: Accounting in Action

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Question 31

Multiple Choice

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Which of the following events is not a business transaction?

A) Issuance of stock in exchange for cash.
B) Hired employees.
C) Incurred utility expenses for the month.
D) Earned revenue for services provided.

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Question 32

Multiple Choice

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A dividend is

A) a distribution of the company's earnings to its stockholders.
B) equal to liabilities minus stockholders' equity.
C) equal to assets minus stockholders' equity.
D) equal to revenues less expenses

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Question 33

Multiple Choice

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As of December 31, 2018, Calexico Company has assets of $42,000 and stockholders' equity of $20,000. What are the liabilities for Calexico Company as of December 31, 2018?

Financial accounting ethics violations are

If an individual asset is increased, then

The ending retained earnings amount is shown on

The ending retained earnings balance is reported on both the retained earnings statement and the balance sheet.

Retained earnings at the end of the period is equal to

Indicate which of these items is:

The Financial Accounting Standards Board is a part of the Securities and Exchange Commission.

A common set of standards that provides guidelines to accountants and indicates how to report economic events is called _________________.

Bright Eyes Downtown Diner received a bill of $600 from the Jronand Wine Advertising Agency. The owner, A. A. Bondy, is postponing payment of the bill until a later date. The effect on specific items in the basic accounting equation is

The amount of stockholders' equity in a business is not affected by

The accounting equation for Quattro Enterprises is as follows: $\frac { \text { Assets } } { \$ 120,000 } = \frac { \text { Liabilities } } { \$ 60,000 } + \frac { \text { Stockholders' Equity } } { \$ 60,000 }$ If Quattro purchases office equipment on account for $25,000, the accounting equation will change to $\text {\quad Assets\quad\quad Liabilties \quad Stockholders' Equity }$ A) $\$ 120,000=\$ 60,000\quad+\quad\$ 60,000$ B) $\$ 145,000=\$ 60,000\quad+\quad\$ 85,000$ C) $\$ 145,000=\$ 72,500\quad+\quad\$ 72,500$ D) $\$ 145,000=\$ 85,000\quad+\quad\$ 60,000$

Accountants who are employees of business enterprises are referred to as ________________ accountants.

Which of the following is true regarding the corporate form of business organization?

Andre Dickinson, owner of Andre's Fine Wines, also owns a personal residence that costs $475,000. The market value of his residence is $625,000. During preparation of the financial statements for Andre's Fine Wines, the accounting concept most relevant to the presentation of Andre's home is

An income statement

Match the following external users of financial accounting information with the type of decision that user will make with the information. a. Creditor b. Investor c. Regulatory Agency d Internal Revenue Service _______ (1) Is the company operating within prescribed guidelines? _______ (2) Is the company complying with tax laws? _______ (3) Is the company able to pay its debts? _______ (4) Is the company a good investment?

Presented below is information related to Anthony Scalici Company. $\begin{array} { l r } \text { Retained earnings, January 1,2018 } & \$ 21,000 \\\text { Service revenue-2018 } & 320,000 \\\text { Total expenses-2018 } & 213,000 \\\text { Assets, January 1,2018 } & 85,000 \\\text { Liabilities, January 1,2018 } & 64,000 \\\text { Assets, December 31,2018 } & 165,000 \\\text { Liabilities, December 31,2018 } & 90,000 \\\text { Dividends-2018 } & ?\end{array}$ Instructions Prepare the 2015 retained earnings statement for Anthony Scalici Company.