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Exam 1: An Introduction to Accounting

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Question 31

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Tracy Corporation reported the following cash transactions for the year ending December 31,2012,its first year in operation: 1.issued common stock for $60,000 cash 2.borrowed $10,000 cash from a local bank 3.purchased land for $40,000 4.provided services to clients for $70,000 cash 5.paid operating expenses of $62,000 6.paid $3,000 cash dividends to stockholders Required: a)What are the total assets for Tracy Corporation at December 31,2012? b)What is the total equity for Tracy at December 31,2012? c)Prepare an income statement for 2012.

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a)Total assets = $75,000 ($60,...

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Question 32

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Illinois Company experienced an accounting event that affected its financial statements as indicated below: Which of the following accounting events could have caused these effects on the company's financial statements?

A) paid a cash dividend
B) earned cash revenue
C) borrowed money from a bank
D) none of these

E) B) and C)
F) A) and B)

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Question 33

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Which of the following could describe the effects of an asset source transaction on a company's financial statements?

The accounting equation may be written,"Assets = Claims" or "Assets = Liabilities + Equity."

If the total claims by owners of Obe's Gallery are $60,000 and liabilities are $25,000,what are total assets?

Dividends paid by a company are shown on the

Accounting is an information system that reports on the activities of an organization.

Which of the following items would be an example of revenue?

List four elements of a business's financial statements.

Fuller Company was formed in 2012 and experienced the following accounting events during the year: 1.issued common stock for $20,000 cash. 2.earned cash revenue of $30,000. 3.paid cash expenses of $26,000. These were the only events that affected the company during the year. Required: a)Write the accounting equation and record the effects of each accounting event under the appropriate general ledger account heading. b)Prepare an income statement for 2012 and a balance sheet as of December 31,2012.

Chen Company paid $3,000 cash for utility expenses.What kind of transaction is this?

What is the matching concept,and how does it affect a business's financial statements?

A business and a person who owns the business are separate reporting entities.

Resources that a business uses to operate the business are called

Which of the following could describe the effects of an asset source transaction on a company's financial statements?

An asset exchange transaction does not affect the total amount of liabilities and equity of a business.

Expenses are shown on the

Dune Corporation acquired $20,000 cash by issuing common stock to investors.

The following events are for Berea Company for 2012 its first year in business.Assume that all involve receipt or payment of cash. 1.acquired $25,000 cash by issuing stock to owners 2.borrowed $7,000 cash from creditors 3.provided services to customers and received $50,000 4.paid operating expenses amounting to $38,000 5.purchased land for $10,000 6.paid a dividend of $5,000 to owners Required: a)Show the effects of each of these events on the accounting equation shown below,showing dollar amounts of increases and decreases; calculate totals for each account at the end of the period. b)Prepare an income statement and balance sheet for 2012.

What are the types of claims to a business's assets?