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Exam 1: Introducing Financial Accounting

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Question 31

Multiple Choice

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Claire Spa receives a check for $250 for services previously rendered on account.How would Claire Spa record this transaction?

A) Cash increases by $250 and Spa Services Revenue increases by $250.
B) Accounts Receivable increases by $250 and Spa Services Revenue increases by $250.
C) Cash increases by $250 and Spa Services Revenue decreases by $250.
D) Cash increases by $250 and Accounts Receivable increases by $250.
E) Cash increases by $250 and Accounts Receivable decreases by $250.

F) A) and E)
G) A) and B)

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Question 32

Multiple Choice

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According to generally accepted accounting principles,a company's balance sheet should show the company's assets at:

A) The cash equivalent value of what was given up.
B) The current market value of the assets at the balance sheet date.
C) The cash paid to acquire them,even if something other than cash was given in the exchange.
D) The best estimate from a certified internal auditor.
E) The objective value to external users.

F) A) and C)
G) C) and D)

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Question 33

Multiple Choice

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A company had total equity of $89,000 on January 1,2014.The following information is available for the year ended December 31,2014: What are the total assets of the company at December 31,2014?

If the liabilities of a company increased $92,000 during a period of time and equity in the business decreased $30,000 during the same period,did the assets of the company increase or decrease and by what amount?

Businesses can take all of the following forms except:

The accounting principle that requires accounting information to be based on actual cost and requires assets and services to be recorded initially at the amount of cash or cash equivalent given in exchange is the:

Discuss the relationship of risk to return.

Identify and describe the three major activities of a business organization.

The following is a list of selected users of accounting information.Match the appropriate user to the following information needs:

Use the following information as of December 31 to determine equity.

Net income:

The balance sheet is based on the accounting equation.

Expenses decrease retained earnings and are the costs incurred to earn revenues.

Dividends are expenses of a business.

Beginning assets were $700,000,beginning equity was $225,000,revenue for the year was $523,000,common stock issued during the year totaled $320,000,expenses for the year were $392,000,ending equity was $751,000,and ending assets were $963,000. What were the beginning liabilities for the year?

A company paid its employees $90,000 in cash for wages earned during the past two weeks.Enter the appropriate amounts for this transaction into the accounting equation format shown below:

Select the appropriate financial statement(s) for each of the following accounts.

If the liabilities of a business increased $75,000 during a period of time and the equity in the business decreased $30,000 during the same period,the assets of the business must have:

Beginning assets were $437,600,beginning liabilities were $262,560,common stock issued during the year totaled $45,000,revenue for the year was $414,250,expenses for the year were $280,000,dividends declared were $22,700,and ending liabilities were $350,000. What were the ending assets for the year?

FastForward had cash inflows from operations of $62,500; cash outflows from investing activities of $47,000; and cash inflows from financing of $25,000.The net change in cash was: