Exam1a220_f11_KEY_ - Accounting 220 Fall 2011 Exam 1 Name

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Accounting 220 Fall 2011 Exam 1 Name _______KEY___________ 1. If an individual asset is increased, then a. there could be an equal decrease in a specific liability. b. there could be an equal decrease in stockholders’ equity. c. there could be an equal decrease in another asset. d. none of these is possible. e. I don’t know. 2. The normal balance of any account is the a. left side. b. right side. c. side which increases that account. d. side which decreases that account. e. I don’t know. 3. To show how successfully your business performed during a period of time, you would report its revenues and expense in the a. balance sheet. b. income statement. c. statement of cash flows. d. retained earnings statement. e. I don’t know. 4. Retained earnings at the end of the period is equal to a. retained earnings at the beginning of the period plus net income minus dividends. b. retained earnings at the beginning of the period plus net income minus liabilities. c. net income. d. assets plus liabilities. e. I don’t know. 5. Which of the following financial statements is concerned with the company at a point in time? a. Balance sheet. b. Income statement. c. Retained Earnings statement. d. Statement of cash flows. e. I don’t know. 6. Dexter Company began the year by issuing $20,000 of common stock for cash. The company recorded revenues of $185,000, expenses of $160,000, and paid dividends of $10,000. What was Dexter’s net income for the year? a. $15,000 b. $35,000 c. $25,000 d. $45,000 e. I don’t know. 1
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7. On a classified balance sheet, current assets are customarily listed a. In the order in which they are expected to be converted into cash b. In alphabetical order c. With the largest dollar amounts first d. In the order of acquisition e. I don’t know. 8 Payments to stockholders are called a. expenses. b. liabilities. c. dividends. d. distributions. 9. Which financial statement would best indicate whether the company relies on debt or stockholders’ equity to finance its assets? a. Statement of Cash Flows b. Retained Earnings Statement c. Income Statement d. Balance Sheet 10. Ashley’s Accessory Shop started the year with total assets of $70,000 and total liabilities of $40,000. During the year the business recorded $110,000 in revenues, $55,000 in expenses, and dividends of $20,000. Stockholders’ equity at the end of the year was a. $60,000. b.
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