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Exam 1: Introduction to Accounting and Business

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Question 91

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Proper ethical conduct implies that you only consider what's in your best interest.

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Question 92

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The primary financial statements of a corporation are the income statement, the statement of stockholders' equity, and the balance sheet.

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Question 93

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The rights of owners in a corporation are referred to as

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 A)Proprietorship B)Partnership C)Corporation D)Limited liability company (LLC)

The assets and liabilities of Rocky's Day Spa at December 31 and expenses for the year are listed below. The stockholders' equity was $68,000 ($48,000 in Common Stock and $20,000 in Retained Earnings) at January 1. The shareholders invested in an additional $10,000 of common stock during the year. Net income for the year is $45,625. Prepare a balance sheet for Rocky's Day Spa for the year ended December 31.

Daniels Company made the following selected transactions during May: 1.Received cash from sale of stock, $55,000 2.Paid creditors on account, $7,000 3.Billed customers for services on account, $2,565 4.Received cash from customers on account, $8,450 5.Paid dividends to stockholders, $2,500 6.Received the utility bill, $160, to be paid next month Indicate the effect of each transaction on the accounting equation by: (a)Account type - (A)assets, (L)liabilities, (SE)stockholders' equity, (R)revenue, and (E)expense b)Name of account c)The amount by of the transaction d)The direction of change (increase or decrease) in the account affected Note: Each transaction has two entries.

The financial statement that presents a summary of the revenues and expenses of a business for a specific period of time, such as a month or year, is called a(n)

Karen Meyer owns and operates Crystal Cleaning Company. Recently, Meyer withdrew $10,000 from Crystal Cleaning, and she contributed $6,000, in her name, to the American Red Cross. The contribution of the $6,000 should be recorded on the accounting records of which of the following entities?

Match each transaction with its effect on the accounting equation. Each letter may be used more than once. -Provided a service to a customer on account A)Increase assets, increase liabilities B)Increase liabilities, decrease stockholders' equity C)Increase assets, increase stockholders' equity D)No effect E)Decrease assets, decrease liabilities F)Decrease assets, decrease stockholders' equity

The business entity assumption means that

On May 20, White Repair Service extended an offer of $108,000 for land that had been priced for sale at $140,000. On May 30, White Repair Service accepted the seller's counteroffer of $115,000. On June 20, the land was assessed at a value of $95,000 for property tax purposes. On July 4, White Repair Service was offered $150,000 for the land by a national retail chain. At what value should the land be recorded in White Repair Service's records?

Ramos Repair Company is paying a cash dividend. How does this transaction affect Ramos Repair Company's accounting equation?

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

Which of the following is not a business transaction?

Revenues for the year totaled $162,000 and expenses totaled $174,000. The stockholders purchased $15,000 of common stock and were paid $6,000 in dividends during the year. What was the net income or net loss for the year?

Any twelve-month accounting period adopted by a company is known as its fiscal year.

Computer Corporation is starting its computer programming business and has sold stock of $15,000. Identify how the accounting equation will be affected.

At the beginning of the year, Winton Company's assets were $180,000 and its stockholders' equity was $82,000. During the year, assets increased by $25,000 and liabilities increased by $9,000. What was the stockholders' equity at the end of the year?

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

Two factors that typically lead to ethical violations are relevance and timeliness of accounting information.