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Exam 1: Accounting in Business

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Question 91

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A financial statement providing information that helps users understand a company's financial status, and which lists the types and amounts of assets, liabilities, and equity as of a specific date, is called a(n) :

A) Balance sheet.
B) Income statement.
C) Statement of cash flows.
D) Statement of retained earnings.
E) Financial Status Statement.

F) A) and B)
G) A) and E)

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Question 92

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What distinguishes liabilities from equity?

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Liabilities are creditors' claims on ass...

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Question 93

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Atkins Company collected $1,750 as payment for the amount owed by a customer from services provided the prior month on credit. How does this transaction affect the accounting equation for Atkins?

Strategic management is the process of determining the right mix of operating activities for the type of organization, its plans, and its market.

The purchase of supplies appears on the statement of cash flows as an investing activity because it involves the purchase of assets.

Decreases in equity that represent costs of providing products or services to customers, used to earn revenues are called:

All of the following are classified as liabilities except:

Jet Styling, Inc. has the following beginning cash balance and cash transactions for the month of January. Using this information prepare a statement of cash flows. $\begin{array}{llcc}\text { a. } & \text {Beginning cash balance......................... } &\$3,200\\\text { b. } & \text {Cash investment by owner.................... } &15,000\\\text { c. } & \text {Cash payment toward long-term loan } &1,000\\\text { d.} & \text {Cash payment of rent........................... } &1,800\\\text { e. } & \text { Purchased equipment for cash............ } &7,500\\\text { f. } & \text {Purchased store supplies for cash.......... } &1,500\\ \text { g. } & \text { Cash collected from customers............. } &7,750\\ \text {h. } &\text { Cash dividend to stockholder...............} &2,000\\ \text {i. } &\text {Cash payment of wages......................... } &4,000\\\end{array}$

Risk is:

Ethical behavior requires that:

General accounting principles arise from long-used accounting practices.

The accounting concept that requires every business to be accounted for separately from other business entities, including its owner or owners is known as the:

The business entity principle means that accounting information reflects a presumption that the business will continue operating instead of being closed or sold.

Stockholders' equity is increased when cash is received from customers in payment of previously recorded accounts receivable.

____________ are the increases in equity from a company's sales of products and services to customers.

Every business transaction leaves the accounting equation in balance.

Regulators often have legal authority over certain activities of organizations.

If a company paid $38,000 of its accounts payable in cash, what was the effect on the accounting equation?

There are three major types of business activities. ________________ activities are the means organizations use to pay for resources such as land, building, and equipment to carry out plans.

Rico's Taqueria had cash inflows from operating activities of $27,000; cash outflows from investing activities of $22,000, and cash outflows from financing activities of $12,000. Calculate the net increase or decrease in cash.