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Exam 1: An Introduction to Accounting

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Question 41

Multiple Choice

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Liabilities are shown on the

A) income statement.
B) statement of changes in stockholders' equity.
C) statement of cash flows.
D) balance sheet.

E) B) and D)
F) A) and B)

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Question 42

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An asset exchange transaction does not affect the total amount of assets of an entity.

A) True
B) False

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Question 43

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List the three categories of cash receipts and cash payments that are reported on the statement of cash flows.

Investors and creditors use accounting information to identify the businesses they wish to provide resources to.

Wayne Company purchased equipment for $45,000 cash.As a result of this event,Wayne had a

The broad categories of information reported on a business's financial statements are referred to as

The account,"Land," is a subclassification of the "Liabilities" element of the financial statements.

Which financial statement provides information about how a business obtained and spent cash during an accounting period?

The accounting equation may be written,

Parrot Company paid a $300 cash dividend.Which of the following choices accurately reflects how this event would affect the company's financial statements?

Who are the stakeholders for a business?

Gomez Corporation paid its monthly utility bill of $850.

Hale Company issued a note payable to purchase a truck.

The difference between asset increases and asset decreases from operating a business is called income or earnings.

An asset source transaction

What does the acronym "GAAP" stand for? Name the group that has the primary responsibility for establishing US GAAP.

An asset use transaction

The Financial Accounting Standards Board is the primary authority for establishing accounting standards for businesses in the United States.

The MBR Company began operations on January 1,2012,and on that date,$15,000 of common stock was issued for cash.In addition,MBR borrowed $10,000 from the bank.The company provided services to its customers during 2012 and received $18,000 cash.During the year,it paid $20,000 cash for land,$5,000 for salaries,and $3,000 for cash dividends to the owners. Required: a)Draw an accounting equation and record the effects of each transaction under the appropriate heading.(Use specific accounting titles below the major headlines) b)Prepare an income statement and a balance sheet for the 2012 accounting period.

Which of the following is NOT an asset use transaction?