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Exam 1: An Introduction to Accounting

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Question 41

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Which of the following describes the effects of an asset use transaction on the accounting equation? $\begin{array}{|c|c|c|c|c|c|}\hline & \text { Assets } & = & \text { Liab. } & + & \text { Equity } \\\hline \mathrm{A} & + & = & + & + & \text { NA } \\\hline \mathrm{B} & - & = & \mathrm{NA} & + & - \\\hline \mathrm{C} . & +- & = & \mathrm{NA} & + & \mathrm{NA} \\\hline \mathrm{D} . & \mathrm{NA} & = & + & + & \mathrm{NA} \\\hline\end{array}$

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

E) None of the above
F) C) and D)

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Question 42

Multiple Choice

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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) All of the above
F) B) and C)

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Question 43

Multiple Choice

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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?

Chico Company experienced an accounting event that affected its accounting equation as indicated below: $\begin{array} { | c | c | c | c | c | c | c | } \hline \text { Assets } & = & \text { Liabilities } & + & \begin{array} { c } \text { Commnn } \\\text { Strok }\end{array} & + & \begin{array} { c } \text { Retained } \\\text { Eurnings }\end{array} \\\hline + & = & \text { NA } & + & + & + & \text { NA } \\\hline\end{array}$ Which of the following accounting events could have caused these effects on Chico's statements?

Ballard Company reported assets of $500 and liabilities of $200.What amount will Ballard's report for stockholders' equity?

Yi Company provided services to a customer for $5,500 cash.Based on this information alone,which of the following statements is true?

Which of the following cash transactions would not affect total assets?

Which of the following statements is false regarding managerial accounting information?

Tandem Company borrowed $32,000 of cash from a local bank.Which of the following choices accurately reflects how this event affects the accounting equation? $\begin{array}{|c|c|c|c|c|c|c|c|}\hline & \text { Assets } & = & \text { Liabilities } & + & \begin{array}{c}\text { Common } \\\text { Stock }\end{array} & + & \begin{array}{c}\text { Retained } \\\text { Earnings }\end{array} \\\hline \text { A } & \text { NA } & = & 32,000 & + & \text { NA } & + & 32,000 \\\hline \mathrm{B} . & 32,000 & = & \mathrm{NA} & + & 32,000 & + & \mathrm{NA} \\\hline \mathrm{C} . & 32,000 & = & \mathrm{NA} & + & \mathrm{NA} & + & 32,000 \\\hline \mathrm{D} . & 32,000 & = & 32,000 & + & \mathrm{NA} & + & \mathrm{NA} \\\hline\end{array}$

An asset source transaction increases a business's assets and the claims to assets.

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

Which of the following would not describe the effects of an asset source transaction on the accounting equation? $\begin{array} { | l | c | l | c | c | c | c | c | } \hline & \text { Assets } & = & \text { Linbilities } & + & \begin{array} { c } \text { Corrunon } \\\text { Strek }\end{array} & + & \begin{array} { c } \text { Retained } \\\text { Earnings }\end{array} \\\hline \text { A } & + & = & + & + & \text { NA } & + & \text { NA } \\\hline \text { B. } & + & = & \text { NA } & + & \text { NA } & + & + \\\hline \text { C. } & + & = & \text { NA } & + & + & + & \text { NA } \\\hline \text { D. } & + - & = & \text { NA } & + & \text { NA } & + & \text { NA } \\\hline\end{array}$

A business and the person who owns the business are separate reporting entities.

[The following information applies to the questions displayed below.] Lexington Company engaged in the following transactions during Year 1, its first year in operation: (Assume all transactions are cash transactions.) 1) Acquired $6,000 cash from issuing common stock. 2) Borrowed $4,400 from a bank. 3) Earned $6,200 of revenues. 4) Incurred $4,800 in expenses. "5) Paid dividends of $800. Lexington Company engaged in the following transactions during Year 2: (Assume all transactions are cash transactions.) " 1) Acquired an additional $1,000 cash from the issue of common stock. 2) Repaid $2,600 of its debt to the bank. 3) Earned revenues, $9,000. 4) Incurred expenses of $5,500. 5) Paid dividends of $1,280. -What was the net cash flow from financing activities reported on Lexington's statement of cash flows for Year 2?

A net loss occurs when

Liabilities are reported on which of the following financial statement(s) ?

International accounting standards are formulated by the IASB.What does that acronym stand for?

Indicate whether each of the following statements about equity is true or false. ________ a)Expenses decrease retained earnings. ________ b)stockholders' equity and liabilities can be viewed either as sources of assets or claims to assets of the business. ________ c)Retained earnings is increased by loans received from a bank. ________ d)Dividends paid to stockholders decrease common stock. ________ e)Generally,assets are reported at the actual price paid for them when purchased regardless of subsequent changes in market value.

The statement of changes in stockholders' equity presents

Jackson Company paid $500 cash for salary expenses.Which of the following accurately reflects how this event affects the company's accounting equation? $\begin{array}{|c|c|c|c|c|c|}\hline & \text { Assets } & = & \text { Liab. } & + & \text { Equity } \\\hline \text { A } & 500 & = & 500 & + & \text { NA } \\\hline \text { B. } & (500) & = & \text { NA } & + & (500) \\\hline \text { C. } & (500) & = & (500) & + & \text { NA } \\\hline \text { D. } & (500) & = & \text { NA } & + & 500 \\\hline\end{array}$