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Flashcards in Chp 1 Graded Review Q's Deck (18)
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1

The primary objective of financial accounting is to:

Provide accounting information that serves external users.

2

If a co. is considering the purchase of a parcel of land that was originally acquired by the seller for $85,000, is offered for sale at $150,000, assessed for tax purposes at $95,000, is recognized by the purchaser as easily being worth $140,000, and is purchased for $137,000 the land should be recorded in the purchaser's books at:

$137,000

3

Revenue is properly recognized:

Upon completion of the sale of goods or when services have been performed and the business obtains the right to collect the sales price.

4

If a co. uses $1,300 of its cash to purchase supplies, the effect on the accounting equation would be:

One asset increases $1,300 and another asset decreases $1,300, causing no effect.

5

If assets are $300,000 and liabilities are $192,000, then equity equals:

$108,000

6

On May 31st of the current year, the assets and liabilities of Riser, Inc. are as follows: Cash $20,500; Accounts Receivable, $7,250; Supplies, $650; Equipment, $12,000; Accounts Payable, $9,300. What is the amount of stockholders' equity as of May 31st of the current year?

$31,100

7

Saddleback Co. paid off $30,000 of its accounts payable in cash. What would be the effector this transaction on the accounting equation?

Assets and Liabilities both decrease $30,000

8

If the liabilities of a co. increased $74,000 during a period of time and equity in the co. decreased $19,000 during the same period, what was the effect on the assets?

Assets would have increased $55,000

9

What is the equity if the asset is $250 and the liabilities are $50?

Equity = $200

10

Received cash from stockholders as an investment in the co...

-Increases assets
-Increases Stockholders' Equity

11

Paid rent for the current month....

-Decreases Assets
-Decreases Stockholders' Equity

12

Received cash for services...

-Increase Assets
-Increase Stockholders' Equity

13

Paid creditor on account for supplies bought and charged last month...

-Decrease Assets
-Decrease Liabilities

14

Received cash on account from a customer for services provided last month...

-Increase Assets
-Decrease Assets

15

Paid a dividend...

-Decrease Assets
-Decrease Stockholders' Equity

16

Purchased a truck on account...

-Increase Assets
-Increase Liabilities

17

If beginning earnings is $85,000, and ending retained earnings is $65,000, and the co. paid dividends of $15,000, the amount of net income or net loss is...

Net loss of $5,000

18

Order of production:
-Statement of Retained Earnings (R)
-Balance Sheet (B)
-Statement of Cash Flow (C)
-Income Statement (I)

I, R, B, C