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Exam 1: Introducing Financial Accounting

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Question 51

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A limited partnership:

A) Includes a general partner with unlimited liability.
B) Is subject to double taxation.
C) Has owners called stockholders.
D) Is the same as a corporation.
E) Must only have two partners.

F) B) and D)
G) D) and E)

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Question 52

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A company paid its landlord $15,000 cash for this month's rent.Enter the appropriate amounts for this transaction into the accounting equation format shown below:

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_TB6947_00...

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Question 53

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Which accounting assumption assumes that all accounting information can be reported monthly or yearly?

Generally accepted accounting principles are the concepts and rules for preparing financial statements.

You are reviewing the accounting records of Cathy's Antiques,Inc.owned by Cathy Miller.You have uncovered the following situations.Compose a memo to Ms.Miller that cites the appropriate accounting principle and the suggested action for each separate situation.A.In August,a check for $500 was written to Wee Day Care Center.This amount represents child care for her son Brandon. B.Cathy plans a Going Out of Business Sale for May,since she will be closing her business for a month-long vacation in June.She plans to reopen July 1 and will continue operating Cathy's Antiques indefinitely. C.Cathy received a shipment of pine furniture from Quebec,Canada.The invoice was stated in Canadian dollars. D.Joseph Clark paid $1,500 for a dining table.The amount was recorded as revenue.The table will be delivered to Mr.Clark in six weeks.

Identify the users and uses of accounting information.

Identify and describe the four basic financial statements.

Internal users of accounting information include lenders,shareholders,brokers,and managers.

Annie's Attic has the following account balances for the dates given: Its net income for September 1 through September 30 was $20,000 and there were no investments by the owners or dividends paid.Determine the equity at both September 1 and September 30.

Creditors' claims on the assets of a company are called:

A company has assets of $500,000 and equity of $350,000.What is the amount of liabilities?

Presented below is selected financial information for Stanley's Bike Shop.Using the appropriate information,prepare its balance sheet at December 31,2014.

Chao Xu starts a consulting business called Networkers.Xu invests $10,000 cash and $5,000 of equipment in Networkers in exchange for its common stock.How would Networkers record this transaction?

FastForward has net income of $18,955 and assets at the beginning of the year of $200,000.Its assets at the end of the year total $246,000.Compute its return on assets.

The financial statement that shows beginning and ending retained earnings balances and the effects of net income (loss) and a dividend for the period is the:

Planning refers to defining an organization's ideas,goals,and actions.

The income statement is a financial statement that shows revenues earned and expenses incurred during a specified period of time.

Photometer Company paid off $30,000 of its accounts payable in cash.What would be the effects of this transaction on the accounting equation?

Match each of the following terms with the most appropriate definition:

The statement of cash flows shows the net effect of revenues and expenses for a reporting period.