Principles of Accounting - Chapter 1 Quiz PDF

Principles of Accounting -- Supplemental Instruction CHAPTER 1 QUIZ 1. McCarthy and Company had the following final balances after the first year of operations: assets, \$35,900; stockholders\' equity, \$14,700; dividends, \$2,200; and net income, \$9,900. What is the amount of McCart...

Principles of Accounting -- Supplemental Instruction CHAPTER 1 QUIZ 1. McCarthy and Company had the following final balances after the first year of operations: assets, \$35,900; stockholders\' equity, \$14,700; dividends, \$2,200; and net income, \$9,900. What is the amount of McCarthy and Company's liabilities? a. \$22,700 b. \$35,900 c. \$10,600 d. \$21,200 2. The accounting equation is defined as: e. Assets = Liabilities + Stockholders\' Equity. f. Assets = Liabilities − Stockholders\' Equity. g. Net Income = Revenues − Expenses. h. Liabilities + Revenues = Assets. 3. Use the following appropriate amounts to calculate net income: Revenues, \$12,800; Liabilities, \$3,800; Expenses, \$4,700; Assets, \$18,200; Dividends, \$1,900. i. \$2,400 j. \$8,100 k. \$7,100 l. \$6,200 4. 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? m. \$8,100 n. \$500 o. \$0 p. \$7,600 5. Financial accounting: q. **Provides information primarily for external decision makers.** r. Provides information primarily for a company\'s employees. s. Provides information primarily for the use of managers of the company. t. Is primarily used to compute a company\'s tax obligation. 6. One advantage of the corporate form of business is: u. Limited liability. v. Less capital invested. w. Must have at least 20 investors to establish. x. **Double taxation.** 7. Net income can best be described as: y. Net cash received by a company during the year. z. **Revenues minus expenses.** a. The amount of profits retained in a company for the year. b. Resources of a company. 8. Using the information below from the accounting records of Thomas Corporation, owners\' claims to the company\'s resources amount to: c. \$1,200,000. d. \$800,000. e. \$250,000. f. \$400,000. 9. Which of the following accounts appears in the statement of stockholders\' equity? g. Supplies. h. Cash. i. Salaries Payable. j. **Retained Earnings.** 10. The equation best describing the income statement is: k. **Revenues − Expenses = Net Income.** l. Assets = Revenues − Expenses. m. Assets = Liabilities + Stockholders\' Equity. n. Revenues + Expenses = Net Income.