Accounting Quiz 1-2

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

McCarthy and Company had the following final balances after the first year of operations: assets, $35,900; stockholder's equity, $14,700; dividends, $2,200; and net income, $9,900. What is the amount of McCarthy and Company's liabilities?

$21,200 (correct)
$35,900
$10,600
$22,700

The accounting equation is defined as:

Net Income = Revenues Expenses.
Assets = Liabilities – Stockholders' Equity.
Liabilities + Revenues = Assets.
Assets = Liabilities + Stockholders' Equity. (correct)

Use the following appropriate amounts to calculate net income: Revenues, $12,800; Liabilities, $3,800; Expenses, $4,700; Assets, $18,200; Dividends, $1,900.

$6,200
$7,100
$2,400
$8,100 (correct)

Nina Corp. had the following net income (loss) the first three years of operation: $6,700, ($1,000), and $2,400. If the Retained Earnings balance at the end of year 3 is $500, what was the total amount of dividends paid over these 3 years?

$7,600 (B) Signup and view all the answers

Financial accounting:

Provides information primarily for external decision makers. (A) Signup and view all the answers

One advantage of the corporate form of business is:

Limited liability. (A) Signup and view all the answers

Using the information below from the accounting records of Thomas Corporation, owner's claims to the company's resources amount to: Assets $1,200,000 Liabilities $800,000 Net income $100,000 Retained earnings $250,000

$400,000 (C) Signup and view all the answers

Net income can best be described as:

Revenues minus expenses. (B) Signup and view all the answers

Nina Corp. had the following net income (loss) the first three years of operation: $6,700, ($1,000), and $2,400. If the Retained Earnings balance at the end of year three is $500, what was the total amount of dividends paid over these three years?

$7,600 (A) Signup and view all the answers

Which of the following accounts appears in the statement of stockholders' equity?

Retained Earnings. (C) Signup and view all the answers

The equation best describing the income statement is:

Revenues - Expenses = Net Income. (D) Signup and view all the answers

Childers Service Company provides services to customers totaling $3,900, for which it billed the customers. How would the transaction be recorded?

Debit accounts receivable $3,900, credit service revenue $3,900 (B) Signup and view all the answers

A company received a bill for newspaper advertising services received, $390. The bill will be paid in 10 days. How would the transaction be recorded today?

Debit advertising expense $390, credit accounts payable $390 (C) Signup and view all the answers

Summer Leasing received $10,300 for 24 months rent in advance. How should Summer record this transaction?

Debit cash; credit unearned revenue (A) Signup and view all the answers

When a company pays utilities of $1,820 in cash, the transaction is recorded as:

Debit utilities expense $1,820, credit cash $1,820. (A) Signup and view all the answers

Assume that $17,400 cash is paid for insurance to cover the next year. The appropriate debit and credit are:

Debit prepaid insurance $17,400, credit cash $17,400. (B) Signup and view all the answers

When a company pays $2,100 dividends to its stockholders, the transaction should be recorded as:

Debit dividends; credit cash. (C) Signup and view all the answers

The accounts payable account has a beginning balance of $10,600 and the company purchased $45,000 of supplies on account during the month. The ending balance was $19,500. How much did the company pay to creditors during the month?

$36,100 (D) Signup and view all the answers

On July 7, Saints Inc. received $9,000 in cash from a customer for services to be provided on October 10. Which of the following describes how the transaction should be recorded on July 7?

Debit cash $9,000, credit unearned revenue $9,000 (A) Signup and view all the answers

Clement Company paid an account payable related to a previous utility bill of $950. This transaction should be recorded as follows on the payment date:

Debit accounts payable $950, credit cash $950. (A) Signup and view all the answers

Which of the following would increase assets and increase liabilities?

Purchase office supplies on account. (A) Signup and view all the answers

What was the total amount of Gotebo's liabilities following these six transactions?

Issued 10,000 shares of common stock for $15,000 cash.

Purchased land for $12,000, signing a note payable for the full amount.

Purchased office equipment for $1,200 cash.

Received cash of $14,000 for services provided to customers during the month.

Purchased $300 of office supplies on account.

Paid employees $10,000 for their first month's salaries.

$12,300. (C) Signup and view all the answers

Flashcards

Assets

Assets are what a company owns, like cash, equipment, and accounts receivable.

Liabilities

Liabilities are what a company owes to others, like accounts payable and loans.

Stockholders' Equity

Stockholders' equity represents the owners' stake in the company's assets after deducting liabilities.

Accounting Equation

The fundamental accounting equation states that Assets are always equal to the sum of Liabilities and Stockholders' Equity.