Question 1

The balance sheet reports assets and claims to those assets at a specific point in time.

Accepted Answer

A) True 
 B)False

Question 2

Which three items affect retained earnings, and how do they affect it?

Accepted Answer

Net income increases...

Question 3

(Communication)
Mary Baroni is a friend of yours from high school. She decided to become a beautician after leaving high school, rather than to attend college. She recently opened her own shop, and has contracted her services to a local hospital. She is paid a monthly fee for her services, and receives a small gratuity from each of the patients.
She has just received her first set of financial statements from her accountant. She is quite upset. The statements show a cash balance of $3,600 at the end of the month, but a net income of only $500. She has written you a letter, asking you whether such a situation is possible, or whether she should find another accountant.
Required:
Write a short letter to your friend. Use proper form. Answer her question completely, but briefly.

Accepted Answer

Answers will vary. The instructor's requ...

Question 4

Examples of notes are descriptions of the significant accounting policies and methods used in preparing the statements, explanations of contingencies, and various statistics.

Accepted Answer

A) True 
 B)False

Question 5

Which financial statement is prepared first?

Accepted Answer

A)   Balance sheet
B)   Income statement
C)   Retained earnings statement
D)   Statement of cash flows

Question 6

Henson Company began the year with retained earnings of $330,000. During the year, the company recorded revenues of $500,000, expenses of $380,000, and paid dividends of $40,000. What was Henson's retained earnings at the end of the year?

Accepted Answer

A)   $490,000
B)   $410,000
C)   $790,000
D)   $450,000

Question 7

External users of accounting information, like the Internal Revenue Service, are most commonly known as

Accepted Answer

A)   taxing authorities.
B)   labor unions.
C)   customers.
D)   regulatory agencies.

Question 8

Retained earnings is

Accepted Answer

A)   the stockholders' claim on total assets.
B)   equal to cash.
C)   equal to revenues.
D)   the amount of net income kept in the corporation for future use.

Question 9

Which financial statement would best indicate whether the company relies on debt or stockholders' equity to finance its assets?

Accepted Answer

A)   Statement of cash flows
B)   Retained earnings statement
C)   Income statement
D)   Balance sheet

Question 10

Which of the following groups uses accounting information to determine whether the company can pay its obligations?

Accepted Answer

A)   Investors in common stock
B)   Marketing managers
C)   Creditors
D)   Chief Financial Officer

Question 11

Broadway Corporation's stockholders' equity equals one-fourth of the company's total assets. The company's liabilities are $270,000. What is the amount of the company's stockholders' equity?

Accepted Answer

$90,000: X...

Question 12

Payments to owners are operating activities.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following financial statements is concerned with the company at a point in time?

Accepted Answer

A)   Balance sheet
B)   Income statement
C)   Retained earnings statement
D)   Statement of cash flows

Question 14

Which of the following clarifies information presented in the financial statements, as well as expanding upon it where additional detail is needed?

Accepted Answer

A)   Auditor's report
B)   Management discussion and analysis section
C)   Notes to the financial statements
D)   President's state of the company report

Question 15

Resources owned by a business are referred to as

Accepted Answer

A)   stockholders' equity.
B)   liabilities.
C)   assets.
D)   revenues.

Question 16

Financial accounting ethics violations are

Accepted Answer

A)   not a problem in the U.S or internationally.
B)   much more common in the U.S than internationally.
C)   much more common internationally than in the U.S.
D)   a major problem both in the U.S and internationally.

Question 17

Expenses are incurred

Accepted Answer

A)   only on rare occasions.
B)   to produce assets.
C)   to produce liabilities.
D)   to generate revenues.

Question 18

Elston Company compiled the following financial information as of December 31, 2014:  Elston's stockholders' equity on December 31, 2014 is

Accepted Answer

A)   $525,000.
B)   $550,000.
C)   $400,000.
D)   $600,000.

Question 19

From the following list of selected accounts taken from the records of Schmidt Clinic, identify those that would appear on the balance sheet.

Accepted Answer

The answer of From the following list of selected accounts...

Question 20

U.S. standards are developed by the

Accepted Answer

A)   IFRS.
B)   GAAP.
C)   IASB.
D)   FASB.

Exam 1: Introduction to Financial Statements

Correct Answer
verified
Answers will vary. The instructor's requ...
View Answer

The balance sheet reports assets and claims to those assets at a specific point in time.

Correct Answer
verified

Which three items affect retained earnings, and how do they affect it?

Correct Answer
verified
Net income increases...
View Answer

From the following list of selected accounts taken from the records of Schmidt Clinic, identify those that would appear on the balance sheet.

Correct Answer
verified

Broadway Corporation's stockholders' equity equals one-fourth of the company's total assets. The company's liabilities are $270,000. What is the amount of the company's stockholders' equity?

Correct Answer
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$90,000: X...
View Answer

Expenses are incurred

Correct Answer
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Henson Company began the year with retained earnings of $330,000. During the year, the company recorded revenues of $500,000, expenses of $380,000, and paid dividends of $40,000. What was Henson's retained earnings at the end of the year?

Correct Answer
verified

U.S. standards are developed by the

Correct Answer
verified

Retained earnings is

Correct Answer
verified

Examples of notes are descriptions of the significant accounting policies and methods used in preparing the statements, explanations of contingencies, and various statistics.

Correct Answer
verified

Which financial statement would best indicate whether the company relies on debt or stockholders' equity to finance its assets?

Correct Answer
verified

Elston Company compiled the following financial information as of December 31, 2014: Elston's stockholders' equity on December 31, 2014 is

Correct Answer
verified

Which financial statement is prepared first?

Correct Answer
verified

Which of the following clarifies information presented in the financial statements, as well as expanding upon it where additional detail is needed?

Correct Answer
verified

Financial accounting ethics violations are

Correct Answer
verified

External users of accounting information, like the Internal Revenue Service, are most commonly known as

Correct Answer
verified

Which of the following groups uses accounting information to determine whether the company can pay its obligations?

Correct Answer
verified

Which of the following financial statements is concerned with the company at a point in time?

Correct Answer
verified

Resources owned by a business are referred to as

Correct Answer
verified

Payments to owners are operating activities.

Correct Answer
verified

Exam 1: Introduction to Financial Statements

Correct AnswerverifiedAnswers will vary. The instructor's requ...View AnswerShow Answer

The balance sheet reports assets and claims to those assets at a specific point in time.

Correct AnswerverifiedShow Answer

Which three items affect retained earnings, and how do they affect it?

Correct AnswerverifiedNet income increases...View AnswerShow Answer

From the following list of selected accounts taken from the records of Schmidt Clinic, identify those that would appear on the balance sheet.

Correct AnswerverifiedShow Answer

Broadway Corporation's stockholders' equity equals one-fourth of the company's total assets. The company's liabilities are $270,000. What is the amount of the company's stockholders' equity?

Correct Answerverified$90,000: X...View AnswerShow Answer

Expenses are incurred

Correct AnswerverifiedShow Answer

Henson Company began the year with retained earnings of $330,000. During the year, the company recorded revenues of $500,000, expenses of $380,000, and paid dividends of $40,000. What was Henson's retained earnings at the end of the year?

Correct AnswerverifiedShow Answer

U.S. standards are developed by the

Correct AnswerverifiedShow Answer

Retained earnings is

Correct AnswerverifiedShow Answer

Examples of notes are descriptions of the significant accounting policies and methods used in preparing the statements, explanations of contingencies, and various statistics.

Correct AnswerverifiedShow Answer

Which financial statement would best indicate whether the company relies on debt or stockholders' equity to finance its assets?

Correct AnswerverifiedShow Answer

Elston Company compiled the following financial information as of December 31, 2014: Elston's stockholders' equity on December 31, 2014 is

Correct AnswerverifiedShow Answer

Which financial statement is prepared first?

Correct AnswerverifiedShow Answer

Which of the following clarifies information presented in the financial statements, as well as expanding upon it where additional detail is needed?

Correct AnswerverifiedShow Answer

Financial accounting ethics violations are

Correct AnswerverifiedShow Answer

External users of accounting information, like the Internal Revenue Service, are most commonly known as

Correct AnswerverifiedShow Answer

Which of the following groups uses accounting information to determine whether the company can pay its obligations?

Correct AnswerverifiedShow Answer

Which of the following financial statements is concerned with the company at a point in time?

Correct AnswerverifiedShow Answer

Resources owned by a business are referred to as

Correct AnswerverifiedShow Answer

Payments to owners are operating activities.

Correct AnswerverifiedShow Answer

Correct Answer
verified
Answers will vary. The instructor's requ...
View Answer

Correct Answer
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Correct Answer
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Net income increases...
View Answer

Correct Answer
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Correct Answer
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$90,000: X...
View Answer

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