Finance and Accounting Concepts

These flashcards cover key finance and accounting concepts, including journal entries, return on assets, cash flows, and internal controls to help with exam preparation.

What is cash flow from financing activities for CBS Inc. in 2024?

$425,000

What accounts are credited when Patterson Publishing, Inc. issues common stock?

Credit Common Stock for $3,000 and Credit Additional Paid-In Capital for $10,500.

What indicates that a company is not selling its inventory quickly?

A low average day in inventory.

What is the journal entry to record the collection of a previously coded account receivable?

A debit to Cash and a credit to Account Receivable.

What is the return on assets for Alphabet, Inc. in 2025 based on a net income of $100,000, net sales of $950,000, and average total assets of $500,000?

20%.

What operating cash flows exclude increases in?

Increases in inventory.

What adjusting entry is necessary for the utility bill received on December 31, 2024?

Debit Utilities Expense and credit Utilities Payable for $4,200.

What journal entry is made when Fowler and Sons, Inc. borrows $8,000 from First Bank?

Debit Cash $8,000; Credit Notes Payable $8,000.

How does selling a building for $850,000 by Bayside Manufacturing affect the statement of cash flows?

Increase cash from investing activities.

Which expenditures related to vehicle purchases would be capitalized?

Upgrading the vehicle's suspension system for $3,380.

What is net sales minus cost of goods sold equal to?

Gross Profit.

What is the amount of net pay for Mountainside Inc.'s payroll after deductions?

$1,547.

What type of account is Deferred Revenue?

A liability account.

What loss is recorded when Phil's Lakeside Landscaping sells a mower for $5,000?

Debit Loss, $1,000.

What is an example of a cash outflow from financing activities?

Payment of cash for a long-term note payable.

Which account is not found on the statement of stockholder's equity?

Deferred Revenue.

How is the transaction recorded for services provided by Wiseman & Jones, CPA totaling $7,500?

Debit Accounts Receivable $7,500, credit Service Revenue $7,500.

What is an example of a cash inflow from investing activities?

Receipt of cash from the sale of equipment.

What is the goal of internal controls?

Improving the accuracy and reliability of financial information.

Which of the following represents discontinued operations?

A disposal of a warehouse facility is not considered discontinued.

Which bonds include collateral to support payment?

A secured bond.

What is the first month's interest expense for Coaprider Enterprises, Inc. on a $280,000 note mortgage?

$2,100.00.

What is the journal entry to record bad debt expense for Stilton Children's Hospital estimating uncollectible accounts?

Debit to Bad Debt Expense for $17,700.

What is a measure of liquidity?

Acid-test Ratio.

What does LIFO inventory assume?

Newest units of inventory are sold first.

If Baby Company issues a bond with a face amount of $750,000 and the market rate is 10%, how will these bonds sell?

Less than $750,000.

What is incorrectly stated regarding the separation of duties?

Individuals who approve a transaction should maintain custody of the assets involved.

What is the Return on Equity for Mania Soap, Inc. with a net income of $300,000 and equity of $1,250,000?

24%.