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Exam 1: A Framework for Financial Accounting

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Question 1

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The major underlying assumptions of accounting include all of the following except:

A) Economic entity.
B) Monetary unit.
C) Legal liability.
D) Going concern.

E) A) and C)
F) A) and D)

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Question 2

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Amounts owed to suppliers,workers,governments,and utility companies are examples of liabilities.

A) True
B) False

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Question 3

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The body of rules and procedures that guide the measurement and communication of financial accounting information in the United States is known as:

Define the four basic assumptions underlying Generally Accepted Accounting Principles: (a)economic entity, (b)going concern, (c)periodicity, (d)monetary unit.

The owners' interest in a corporation is called:

Which definition below best describes financial accounting?

The accounts that represent the resources of the company are called:

Nina Corp.had the following net income (loss) the first three years of operation: $7,100, ($1,600) ,and $3,600.If the Retained Earnings balance at the end of year three is $1,100,what was the total amount of dividends paid over these three years?

All cash transactions reported in the statement of cash flows are classified as (1)operating activities, (2)investing activities,or (3)financing activities.

Sooner Company has had a net income of $8,000,$5,000,$12,000,and $10,000 over the first four years of the company's existence.If the average annual amount of dividends paid over the last four years is $3,000,what is the ending retained earnings balance?

The independent,private-sector group that is primarily responsible for setting financial reporting standards in the United States is the:

Use the following information available at the end of 2015 to prepare an income statement and balance sheet on December 31,2015,for Goldie Company. Fees for services performed during the year,$120,000 Accounts payable,$18,500 Accounts receivable,$17,300 Miscellaneous costs for the year,$8,700 Supplies on hand,$2,700 Notes payable outstanding,$30,000 Interest cost on the note for the year,$3,000 Equipment,$84,400 Cash on hand,$11,200 Salaries cost for the year,$71,500 Supplies cost for the year,$9,400 Rent cost for the year,$12,000 Common stock that has been issued,$60,000 Retained earnings at the end of the year,$7,100

The costs associated with producing revenues are referred to as:

Below are the account balances for Huffman Corporation at the end of December.Use only the appropriate accounts to prepare an income statement.

Independent auditors express an opinion on the:

At the beginning of the year (January 1),Maurice and Sons has $12,000 of common stock outstanding and retained earnings of $4,200.During the year,the company reports net income of $3,200 and pays dividends of $1,200.In addition,the company issues additional common stock for $5,000.Prepare the statement of stockholders' equity at the end of the year (December 31).

Account classifications include assets,liabilities,stockholders' equity,dividends,revenues,and expenses.Indicate the account classification for each account name.

Which of the following is a balance sheet item?

Today,financial accounting and reporting standards in the United States are established primarily by the:

The two primary components of stockholders' equity include common stock and revenue.