Quiz #2- Finnace/Accounting

Which of the following is not a transaction to be recorded in the accounting records of an entity?

• Investment of cash by the owners.

• Sale of product to customers.

• Receipt of a plaque recognizing the firm's encouragement of employee participation in the United Way fund drive.

• Receipt of services from a "quick-print" shop in exchange for the promise to provide advertising design services of equivalent value.

Receipt of a plaque recognizing the firm's encouragement of employee participation in the United Way fund drive.

The time frame associated with a balance sheet is

• a point in time in the past.

• a one-year past period of time.

• a single date in the future

• a function of the information included in it.

a point in time in the past.

The balance sheet equation can be represented by:

Assets = Liabilities + Stockholders' Equity

Assets – Liabilities = Stockholders' Equity

Net Assets = Stockholders' Equity

All choices are correct

All choices are correct

The distinction between a current asset and other assets:

• is based on how long the asset has been owned.

• is based on amounts that will be paid to other entities within a year.

• is based on the ability to determine the current fair value of the asset.

• is based on when the asset is expected to be converted to cash or used to benefit the entity

is based on when the asset is expected to be converted to cash or used to benefit the entity

The income statement shows amounts for:

• revenues, expenses, losses, and liabilities.

• revenues, expenses, gains, and fair value per share.

• revenues, assets, gains, and losses.

• revenues, gains, expenses and losses.

revenues, gains, expenses and losses.

The time frame associated with an income statement is:

• a point in time in the past.

• a past period of time.

• a future period of time.

• a function of the information included in it.

a past period of time.

The purpose of the income statement is to show the:

• change in the fair value of the assets from the prior income statement.

• market value per share of stock at the date of the statement.

• revenues collected during the period covered by the statement.

• net income or net loss for the period covered by the statement

net income or net loss for the period covered by the statement

The Statement of Cash Flows:

• shows how cash changed during the period.

• is an optional financial statement.

• shows the change in the fair value of the entity's common stock during the period.

• shows the dividends that will be paid in the future.

shows how cash changed during the period.

On January 31, an entity's balance sheet showed total assets of $2,250 and liabilities of $750. Stockholders' equity at January 31 was

$1,500

$3,000

$1,250

$750

$1,500

At the beginning of the fiscal year, the balance sheet showed assets of $2,728 and stockholders' equity of $1,672. During the year, assets increased $148 and liabilities decreased $76.

Liabilities at the end of the year totaled:

$980

$1,056

$1,672

$1,820

$980