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Exam 1: Accounting and Business

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Question 41

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What is the major difference between the objective of financial accounting and the objective of managerial accounting?

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The objective of financial acc...

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Question 42

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For accounting purposes, the business entity should be considered separate from its owners if the entity is

A) a corporation
B) a proprietorship
C) a partnership
D) any of these

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Question 43

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Match the following business types with each business listed below. Each may be used more than once. -A law firm

The monetary value earned for selling goods or services to customers is called a(n)

Liabilities are reported on the

The assets and liabilities of Thompson Computer Services at March 31, the end of the current year, and its revenue and expenses for the year are listed below. The common stock was $120,000 and the retained earnings was $60,000 at April 1, the beginning of the current year. During the year, shareholders purchased an additional $25,000 in stock. Use this information the answer the questions that follow. $\begin{array} { l r l r } \text { Accounts payable } & \$ 2,000 & \text { Miscellaneous expense } & \$ 1,030 \\\text { Accounts receivable } & 10,340 & \text { Office expense } & 1,240 \\\text { Cash } & 21,420 & \text { Supplies } & 1,670 \\\text { Fees earned } & 73,450 & \text { Wages expense } & 23,550 \\\text { Land } & 47,000 & \text { Dividends } & 16,570 \\\text { Building } & 157,630 & &\end{array}$ ​ -Prepare a statement of stockholder's equity for the current year ended March 31.

Match the following characteristics with the form of business entity that best describes it. Each may be used more than once. -Easy and cheap to organize

Assets are

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

All of the following are general-purpose financial statements except

From the following list of items taken from Lamar's accounting records, identify those that would appear on the income statement. (a) Rent expense (b) Land (c) Common stock (d) Fees earned (e) Dividends (f) Wages expense (g) Investment

Match each business listed below with the business type. Each may be used more than once.

Darnell Company purchased $88,000 of computer equipment from Joseph Company. Darnell Company paid for the equipment using cash that had been obtained from the initial investment by Donnie Darnell. Which entity or entities (Darnell Company, Joseph Company, and Donnie Darnell) should record the transaction involving the computer equipment on their accounting records?

Dave Ryan is the CEO of Ryan's Arcade. At the end of its accounting period, December 31, Ryan's Arcade has assets of $450,000 and liabilities of $125,000. Using the accounting equation, determine the following amounts: (a) stockholders' equity as of December 31 of the current year (b) stockholders' equity as of December 31 at the end of the next year, assuming that assets increased by $\$ 65,000$ and liabilities increased by $\$ 35,000$ during the year

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

Four financial statements are usually prepared for a business. The statement of cash flows is usually prepared last. The statement of stockholders' equity (SSE) , the balance sheet (B) , and the income statement (I) are prepared in a certain order to obtain information needed for the next statement. In what order are these three statements prepared?

If a shareholder wanted to know how money flowed into and out of the company, which financial statement would the shareholder use?

The ending balance of the retained earnings account appears in

The measurement principle requires that

The debt created by a business when it makes a purchase on account is referred to as an