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Exam 1: Introduction to Financial Statements

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Question 31

Multiple Choice

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Liabilities

A) are future economic benefits.
B) are debts and obligations.
C) possess service potential.
D) are things of value owned by a business.

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Question 32

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Lankston Company began the year by issuing $120000 of common stock for cash.The company recorded revenues of $1100000 expenses of $960000 and paid dividends of $60000.What was Lankston's net income for the year?

A) $80000
B) $200000
C) $140000
D) $260000

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Question 33

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Which activities involve acquiring the assets to run the business?

Which of the following would not be considered an internal user of accounting data for the Xanadu Company?

The basic accounting equation states that Assets = Liabilities.

The statement of cash flows would disclose the payment of a dividend

Which of the following would not be considered an internal user of accounting data for a company?

Which financial statement would best indicate whether the company relies on debt or stockholders' equity to finance its assets?

Dividends are reported on the

Buying assets needed to operate a business is an example of a(n)

If the assets owned by a business total $100000 and liabilities total $65000 stockholders' equity totals $25000.

Resources owned by a business are referred to as

Ashley's Accessory Shop started the year with total assets of $210000 and total liabilities of $120000.During the year the business recorded $330000 in revenues $165000 in expenses and dividends of $60000.Stockholders' equity at the end of the year was

Which of the following activities involves obtaining the necessary funds to support the business?

Debts and obligations of a business are referred to as

Marvin Services Corporation had the following accounts and balances: $\begin{array} { l r l r } \text { Accounts payable } & \$ 30,000 & \text { Equipment } & \$ 35,000 \\\text { Accounts receivable } & 5,000 & \text { Land } & 35,000 \\\text { Buil dings } & ? & \text { Unearned service revenue } & 10,000 \\\text { Cash } & 15,000 & \text { Total stockholders' equity } & ?\end{array}$ If the balance of the Buildings account was $75000 and the equipment was sold for $35000 what would be the total of stockholders' equity?

Barrow Company recorded the following cash transactions for the year: Paid $115000 for salaries. Paid $40000 to purchase office equipment. Paid $9000 for utilities. Sold investments for cash of $5000. Paid $11000 in dividends. Collected $295000 from customers. Issued shares for cash of $120000. What was Barrow's net cash provided (used) by operating activities?

Net income will result during a time period when

The primary purpose of the statement of cash flows is to report

The retained earnings statement shows all of the following except