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Exam 1: The Financial Statements

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Question 61

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Receivables are classified as:

A) increases in earnings
B) assets
C) decreases in earnings
D) liabilities

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Question 62

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The basic component of share capital is retained earnings.

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Question 63

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The balance sheet measures how well the company performed during the year.

The following alphabetical listing shows the assets,liabilities,and shareholders' equity for Zap Ltd.as of December 31,2014.Prepare a balance sheet dated December 31,2017.

Shareholders' equity is often referred to as "net assets" and represents the residual amount of business assets that can be claimed by the owners.

Tall Tree Ltd.gathered together the following information regarding the asset,liability,shareholders' equity,revenue,and expense accounts as of the end of its first year in operation,May 31,2017: Prepare the Statement of Retained Earnings for Tall Tree Ltd.for the year ended May 31,2017.

One benefit of organizing a business as a proprietorship is that the proprietor is not required to pay income tax on the business' earnings.

If assets increase $120,000 during a given period and liabilities decrease $25,000 during the same period,shareholders' equity must:

Prepare a Statement of Retained Earnings: On October 31,2017,Lariat Inc.reported retained earnings of $250,000.For the year ended October 31,2017,Lariat had a net income of $80,000 and paid dividends of $50,000.

An investor wishes to assess a company's financial position at the end of the period.Which financial statement would the investor probably examine?

Retained earnings appear on which of the following financial statements?

Expenses are:

If liabilities increase $120,000 during a given period and shareholders' equity decreases $25,000 during the same period,assets must:

Common shares appear on the:

On January 1,2017,total assets for Liftoff Technologies were $125,000; on December 31,2017,total assets were $145,000.On January 1,2017,total liabilities were $110,000; on December 31,2017,total liabilities were $115,000.What are the amount of the change and the direction of the change in Liftoff Technologies shareholders' equity for 2017?

Purchases and sales of non-current assets are examples of:

Which of the following statements should be prepared before the balance sheet is prepared?

Dividends:

Revenues are increases in retained earnings from the delivery of goods or services.

From an accounting viewpoint,a proprietorship is a distinct and separate entity from the proprietor.