207Exam1forpractice - Exam 1 covering Ch 1 -4. I have...

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Exam 1 covering Ch 1 -4. I have removed some that do not relate to our material. There was also an accounting cycle problem. See other file. 1. Stoner Corporation reported the following for Yr2; total assets, $90,000; total liabilities, $35,000; common stock, $40,000. Therefore, retained earnings was a. $ 5,000 b. 40,000 c. 20,000 d. 15,000 2. For a business, a supplier a. is a company or individual that owns shares of the business b. is a company or individual to whom the business sells goods or services c. provides goods and services used by the business d. makes loans to the company to help finance its activities 3. If Zhou Corporation recently purchased goods from you on account, which of Zhou’s financial statements would you look at to determine whether Zhou will be able to pay for the goods when payment is due in 30 days? a. income statement b. balance sheet c. statement of retained earnings d. statement of cash flows 4. The separate (or economic) entity assumption states that a. assets should be recorded at their initial acquisition cost b. each business is considered to be part of its owners c. the monetary unit should be U.S. dollars d. for measurement purposes, the resources, debts, and activities of a business should be kept separate from those of the owners. 5. A business’s assets are a. equal to liabilities plus shareholders’ equity b. the economic resources of the business c. reported at historical cost d. reported on the balance sheet e. all of the above are correct 1
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During Yr2, its second year in operation, Sanborn Company delivered goods to customers equal to $6,250,000. The amount of cash collected from customers was $6,360,000. The amount of accounts receivable at the beginning of Yr2 was $1,200,000. Based on this information, what is the amount of accounts receivable that Sanborn should report at the end of Yr2? a. $1,310,000 b. $110,000 c. $1,090,000 d. none of the above is correct 7. Retained earnings refers to a. the amount reported as “the bottom line” on the income statement b. the accumulated amount of past earnings of a corporation that has not been distributed to shareholders as dividends c. the total amount of stockholders’ equity for a corporation d. the amount that shareholders have invested by purchasing a corporation’s stock. 8. On the statement of cash flows, a company would report the purchase of machinery as cash used in a. operating activities b. financing activities c. purchasing activities d. investing activities 9. The amount of rent expense reported on the income statement is a. the amount of cash paid for rent in the current period b. the amount of cash paid for rent in the current period less any unpaid rent at the end of the period c. the amount of rent used up (incurred) in the current period to help generate revenue d. an increase in net income 10. If you wanted to know what accounting rules a company follows related to its inventory, where would you look: a. the balance sheet b. the income statement
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This note was uploaded on 11/15/2011 for the course ACCT 207 taught by Professor Hudchinson during the Fall '08 term at University of Delaware.

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207Exam1forpractice - Exam 1 covering Ch 1 -4. I have...

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