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Exam 1: Accounting in Business

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Question 81

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A company reported total equity of $145,000 at the beginning of the year. The company reported $210,000 in revenues and $165,000 in expenses for the year. Liabilities at the end of the year totaled $92,000. What are the total assets of the company at the end of the year?

A) $45,000.
B) $92,000.
C) $98,000.
D) $210,000.
E) $282,000.

F) B) and D)
G) All of the above

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Question 82

Multiple Choice

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If a company has excess space in its building that it rents to another company for $700, what is the effect on the accounting equation when the first rent payment is collected?

A) Assets would decrease $700 and liabilities would decrease $700.
B) Assets would decrease $700 and equity would increase $700.
C) Assets would increase $700 and equity would decrease $700.
D) Assets would increase $700 and equity would increase $700.
E) Liabilities would decrease $700 and equity would increase $700.

F) D) and E)
G) B) and D)

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Question 83

Multiple Choice

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Accounts payable appear on which of the following statements?

Revenues are:

All of the following regarding a Certified Public Accountant are true except:

The accounting equation is ______________________________.

Net income occurs when revenues exceed expenses.

On August 31 of the current year, the assets and liabilities of Gladstone, Inc. are as follows: Cash $30,000; Supplies, $600; Equipment, $10,000; Accounts Payable, $8,500. What is the amount of stockholders' equity as of August 31 of the current year?

From the information given below, prepare a November income statement, a November statement of retained earnings, and a November 30 balance sheet. On November 1 of the current year, Victoria Garza began Garza Décor, Inc. with an initial investment of $50,000 cash. On November 30, her records showed the following (alphabetically arranged) items and amounts. $\begin{array}{c}\begin{array}{lll} \text {Accounts payable....................}&\$12,000\\ \text {Accounts receivable.............}&19,000\\ \text {Cash...............................}&21,200\\ \text {Fees earned.................}&34,000\\ \text {Notes pavable..............}&4,250\\ \end{array}\begin{array}{lr}\text { Office furnishings ........ } & \$ 40,000 \\\text { Dividends ..... } & 6,000 \\\text { Rent expense .......... } & 9,600 \\\text { Salaries expense ....... } & 4,200 \\\text { Telephone expense ..... } &250\end{array}\end{array}$

The ____________________ describes a company's revenues and expenses along with the resulting net income or net loss over a period of time due to earnings activities.

In accounting, the rule that requires that assets, services, and liabilities be recorded initially at the cash or cash-equivalent value of what was given up or of the item received is called the ______________________________.

Billington Corp borrows $80,000 cash from Second National Bank. How does this transaction affect the accounting equation for Billington?

______________ users of accounting information are not directly involved in running the organization.

The balance sheet shows a company's net income or loss due to earnings activities over a period of time.

______________ is the area of accounting aimed at serving external users by providing them with general-purpose financial statements.

Match the following terms with definitions.

A sole proprietorship is a business owned by one or more persons.

The primary objective of financial accounting is to:

Speedy has net income of $18,955, and assets at the beginning of the year of $200,000. Assets at the end of the year total $246,000. Compute its return on assets.

The Financial Accounting Standards Board is the governmental agency that sets both broad and specific accounting principles.