FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 1: Introduction to Accounting and Business

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 31

Short Answer

Review LaterAdd Note

Review Later

From the following list of items taken from Lamar's accounting records, identify those that would appear on the income statement. a) Rent expense b) Land c) Common stock d) Fees earned e) Dividends f) Wages expense g) Investment

Correct Answer

verified

Show Answer

Question 32

True/False

Review LaterAdd Note

Review Later

Managerial accounting information is used by external and internal users equally.

A) True
B) False

Correct Answer

verified

Show Answer

Question 33

True/False

Review LaterAdd Note

An example of a general-purpose financial statement would be a report about projected price increases related to transportation costs.

Given the following data: $\begin{array}{lrc}&\text { Dec. } 31 \text {, Year } 2&\text { Dec. } 31 \text {, Year } 1\\\text { Total liabilities } & \$ 128,250 & \$ 120,000 \text { Total stockholders' } \\\text { equity } & 95,000 & 80,000\end{array}$ a) Compute the ratio of liabilities to stockholders' equity for each year. b) Has the creditors' risk increased or decreased from December 31, Year 1, to December 31, Year 2?

The account balances of Awesome Travel Services at December 31 are listed below. There were no additional investments or withdrawals by J. Trendsetter during the year. $\begin{array} { l l l l } \text { Accounts payable } & \$ 12,000 & \text { Retained earnings Jan. 1) } & \$ 10,000 \\\text { Accounts receivable } & 14,000 & \text { Supplies } & 1,000 \\\text { Cash } & 18,000 & \text { Income taxes expense } & 1,300 \\\text { Computer equipment } & 21,000 & \text { Utilities expense } & 8,000 \\\text { Fees earned } & 78,000 & \text { Wages expense } & 25,000 \\\text { Rent expense } & 10,000 & \text { Supplies expense } & 1,700\end{array}$ Prepare an income statement, retained earnings statement, and a balance sheet as of December 31.

The following data were taken from Miller Company's balance sheet: a) Compute the ratio of liabilities to stockholders' equity. Round your answer to one decimal place. b) Has the creditors' risk increased or decreased from December 31, Year 1, to December 31, Year 2?

Which of the following is not a characteristic of a corporation?

The main objective for all business is to maximize unrealized profits.

What information does the income statement give to business users?

Match each transaction with its effect on the accounting equation. Each letter may be used more than once. -Payment for common stock by stockholder

Which of the following is the best description of accounting's role in business?

Select the type of business that is most likely to obtain large amounts of resources by issuing stock.

Match each of the following characteristics with the financial statement it describes. Each financial statement may be used more than once. -The second statement prepared

An example of an external user of accounting information is the federal government.

At the end of its accounting period, December 31, of Year 1, Hsu's Financial Services has assets of $575,000 and stockholders' equity of $335,000. Using the accounting equation and considering each case independently, determine the following amounts. a) Hsu's liabilities as of December 31, of Year 1. b) Hsu's liabilities as of December 31, of Year 2, assuming that assets increased by $56,000 and shareholders' equity decreased by $32,000. c) Net income or net loss during Year 2, assuming that as of December 31, Year 2, assets were $592,000, liabilities were $450,000, and there were no additional investments or dividends.

The accounting equation can be expressed as Assets - Liabilities = Shareholder's Equity.

Match the following business types with each business listed below. Each may be used more than once. -An automobile dealer

Two common areas of accounting that respectively provide information to internal and external users are

Match the following characteristics with the form of business entity that best describes it. Each may be used more than once. -Owned by two or more individuals

Given the following data: Compute the ratio of liabilities to stockholders' equity for each year. Round to two decimal places.