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Exam 1: An Introduction to Accounting

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Question 31

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The following information applies to the questions displayed below Packard Company engaged in the following transactions during Year 1, its first year of operations: (Assume all transactions are cash transactions.) 1) Acquired $950 cash from the issue of common stock. 2) Borrowed $420 from a bank. 3) Earned $650 of revenues. 4) Paid expenses of $250. 5) Paid a $50 dividend. During Year 2, Packard engaged in the following transactions: (Assume all transactions are cash transactions.) 1) Issued an additional $325 of common stock. 2) Repaid $220 of its debt to the bank. 3) Earned revenues of $750. 4) Incurred expenses of $360. 5) Paid dividends of $100. -What is the net cash inflow from operating activities that will be reported on Packard's statement of cash flows for Year 1?

A) $400
B) $650
C) $350
D) $820

E) B) and D)
F) A) and B)

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Question 32

Multiple Choice

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

A) Option A
B) Option B
C) Option C
D) Option D

E) A) and C)
F) C) and D)

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Question 33

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Dividends paid by a company are reported on which of the following financial statement(s) ?

Which of the following groups has the primary responsibility for establishing generally accepted accounting principles for business entities in the United States?

The following information applies to the questions displayed below. Yowell Company began operations on January 1, Year 1. During Year 1, the company engaged in the following cash transactions: 1) issued stock for $40,000 2) borrowed $25,000 from its bank 3) provided consulting services for $39,000 4) paid back $15,000 of the bank loan 5) paid rent expense for $9,000 6) purchased equipment costing $12,000 7) paid $3,000 dividends to stockholders 8) paid employees' salaries, $21,000 -What is Yowell's net cash flow from operating activities?

Financial accounting standards are known collectively as GAAP.What does that acronym stand for?

Which of the following would be reported in the cash flow from financing activities section of a statement of cash flows?

The following information applies to the questions displayed below The financial statements of Calloway Company prepared at the end of the current year contained the following elements and corresponding amounts: Assets = $50,000; Liabilities = ?; Common Stock = $15,000; Revenue = $22,000; Dividends = $1,500; Beginning Retained Earnings = $3,500; Ending Retained Earnings = $7,500. -Based on this information,what was the amount of expenses reported on Calloway's income statement for the current year?

The stockholders of a business have a priority claim to its assets in the event of liquidation.

The types of resources needed by a business are financial,physical,and labor resources.

At the time of liquidation,Fairchild Company reported assets of $200,000,liabilities of $120,000,common stock of $70,000 and retained earnings of $10,000) .What is the maximum amount of Fairchild's assets that the shareholders are entitled to receive?

Which of the following describes the effects of an asset use transaction on the elements of a company's financial statements?

Chico 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 the elements of Chico's financial statements?

The following information applies to the questions displayed below Packard Company engaged in the following transactions during Year 1, its first year of operations: (Assume all transactions are cash transactions.) 1) Acquired $950 cash from the issue of common stock. 2) Borrowed $420 from a bank. 3) Earned $650 of revenues. 4) Paid expenses of $250. 5) Paid a $50 dividend. During Year 2, Packard engaged in the following transactions: (Assume all transactions are cash transactions.) 1) Issued an additional $325 of common stock. 2) Repaid $220 of its debt to the bank. 3) Earned revenues of $750. 4) Incurred expenses of $360. 5) Paid dividends of $100. -What is the amount of total stockholders' equity that will be reported on Packard's balance sheet at the end of Year 1?

Which resource providers lend financial resources to a business with the expectation of repayment with interest?

The financial statements of Calloway Company prepared at the end of the current year contained the following elements and corresponding amounts: Assets = $50,000; Liabilities = ?; Common Stock = $15,000; Revenue = $22,000; Dividends = $1,500; Beginning Retained Earnings = $3,500; Ending Retained Earnings = $7,500. -What was the amount of total liabilities reported on the balance sheet as of the end of the current year?

The Heritage Company is a manufacturer of office furniture.Which term best describes Heritage's role in society?

The four financial statements prepared by a business bear no relationship to each other.

Chow Company earned $1,500 of cash revenue,paid $1,200 for cash expenses,and paid a $200 cash dividend to its owners.Which of the following statements is true?

Which of the following is not an element of the financial statements?