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Exam 1: Introduction to Accounting and Business

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Question 71

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Which one of the following is the authoritative body in the United States having the primary responsibility for developing accounting principles?

A) FASB
B) IRS
C) SEC
D) AICPA

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

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Question 72

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Collins Landscape Company purchased various landscaping supplies on account to be used for landscape designs for its customers. How will this business transaction affect the accounting equation?

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Increase assets (Sup...

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Question 73

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An account receivable is typically classified as a revenue.

The role of accounting is to provide many different users with financial information to make economic decisions.

All of the following are general-purpose financial statements except

If total assets decreased by $88,000 during a period of time and stockholders' equity increased by $71,000 during the same period, then the amount and direction (increase or decrease) of the period's change in total liabilities is

The statement of cash flows consists of three sections: cash flows from operating activities, cash flows from income activities, and cash flows from equity activities.

The monetary unit assumption requires that economic data be recorded in dollars for companies in the United States.

Which of the following is a business transaction?

Explain the meaning of: (a) the measurement principle (b) the monetary unit assumption

Use the accounting equation to answer each of the independent questions below.​ (a) At the beginning of the year, Norton Company's assets were $75,000 and its stockholders' equity was $38,000. During the year, assets increased by $18,000 and liabilities increased by $4,000. What was the stockholders' equity at the end of the year? (b) At the beginning of the year, Turpin Industries had liabilities of $44,000 and stockholders' equity of $66,000. If assets increased by $10,000 and liabilities decreased by $5,000, what was the stockholders' equity at the end of the year?

The stockholders' rights to the assets rank ahead of the creditors' rights to the assets.

For each of the following, determine the amount of net income or net loss for the year.(a)Revenues for the year totaled $71,300 and expenses totaled $35,500. The shareholders purchased $15,000 of common stock during the year.(b)Revenues for the year totaled $220,500 and expenses totaled $175,000. The shareholders were paid $40,000 dividends during the year.(c)Revenues for the year totaled $149,000 and expenses totaled $172,000. The shareholders purchased $12,000 of common stock and were paid $16,000 in dividends during the year.(d)Revenues for the year totaled $198,150 and expenses totaled $174,200. The shareholders were paid $35,000 dividends during the year.

Stockholders' equity at the beginning of the year for ATLAS Inc. was $390,000, while its liabilities totaled $230,000. During the year its assets increased by $75,000; its liabilities decreased by $50,000. Which of these is stockholders' equity at the end of the year for ATLAS Inc.?

The assets and liabilities of Bennett Designs at December 31, the end of the current year, and its revenue and expenses for the year are listed below. What were the total assets on December 31?

Match the following business types with each business listed below. Each may be used more than once. -A dressmaking company A)Service business B)Manufacturing business C)Retail business

Explain the meaning of the business entity assumption.

The monetary value earned for selling goods or services to customers is called a(n)

Which of the following accounts is a liability?

A summary of cash flows for Linda's Design Services for the year ended December 31 is shown below. Prepare a statement of cash flows for Linda's Design Services for the year ended December 31.