Question 1

Retained earnings at the beginning and ending of the accounting period were $300 and $800, respectively. Revenues of $1,100 and dividends paid to stockholders of $200 were reported during the period. What was the amount of expenses reported for the period?
A)$500
B)$400
C)$900
D)$700

Accepted Answer

Beginning retained earnings + Revenues - Expenses - Dividends = Ending retained earnings
$300 + $1,100 - Expenses - $200 = $800
Expenses = $400

Question 2

Yowell Company began operations on January 1, Year 1. During Year 1, the company engaged in the following cash transactions: 1)issued stock for $74,0002)borrowed $59,000 from its bank3)provided consulting services for $72,0004)paid back $32,000 of the bank loan5)paid rent expense for $17,5006)purchased equipment costing $29,0007)paid $4,700 dividends to stockholders8)paid employees' salaries for work completed during the year, $38,000
What is Yowell's net cash flow from operating activities?
A)Inflow of $34,000
B)Inflow of $16,500
C)Inflow of $75,500
D)Inflow of $11,800

Accepted Answer

To calculate net cash flow from operating activities, we need to add up all the cash inflows (such as consulting services revenue) and subtract all the cash outflows (such as salaries paid) related to Yowell's operations.

Cash inflows:
Consulting services revenue: $72,000

Cash outflows:
Salaries paid to employees: $38,000

Net cash flow from operating activities = Cash inflows - Cash outflows 
= $72,000 - $38,000 
= $34,000

Therefore, Yowell's net cash flow from operating activities is an inflow of $34,000. The correct answer choice is B.

Note: The other answer choices are not correct because they either don't take into account all of the cash inflows and outflows related to operating activities or they include items that are not related to operating activities, such as the issuance of stock (which would be a cash inflow from financing activities).

Question 3

Yowell Company began operations on January 1, Year 1. During Year 1, the company engaged in the following cash transactions: 1)issued stock for $40,0002)borrowed $25,000 from its bank3)provided consulting services for $39,0004)paid back $15,000 of the bank loan5)paid rent expense for $9,0006)purchased equipment costing $12,0007)paid $3,000 dividends to stockholders8)paid employees' salaries for work completed during the year, $21,000
What is Yowell's net cash flow from operating activities?
A)Inflow of $6,000
B)Inflow of $9,000
C)Inflow of $18,000
D)Inflow of $30,000

Accepted Answer

Net cash flow from operating activities is calculated by subtracting cash payments (such as rent and salaries) from cash receipts (such as consulting services revenue). 
Cash receipts: $39,000 
Cash payments: $9,000 (rent) + $21,000 (salaries) = $30,000 
Net cash flow from operating activities = $39,000 - $30,000 = $9,000 inflow.

Question 4

Glavine Company repaid a bank loan with cash. The cash flow from this event should be reported as:
A)an outflow for investing activities on the Statement of Cash Flows.
B)an outflow for financing activities on the Statement of Cash Flows.
C)an inflow for investing activities on the Statement of Cash Flows.
D)an inflow for operating activities on the Statement of Cash Flows.

Accepted Answer

Repaying a bank loan is considered a financing activity, as it involves the repayment of funds borrowed from a financial institution. Therefore, the cash flow from this event should be reported as an outflow for financing activities on the Statement of Cash Flows.

Question 5

During Year 2, Chico Company earned $1,950 of cash revenue, paid $1,600 of cash expenses, and paid a $150 cash dividend to its owners. Based on this information alone,which of the following statements is not true?
A)Net income amounted to $350.
B)Total assets increased by $200.
C)Cash inflow from operating activities was $350.
D)Cash outflow from financing activities was $200.

Accepted Answer

Based on the information given, there is no indication of any financing activities that occurred during the year, so it cannot be concluded that there was any cash outflow from financing activities. Therefore, option D is not true. Options A, B, and C are all true based on the given information.

Question 6

Jackson Company had a net increase in cash from operating activities of $9,700 and a net decrease in cash from financing activities of $3,550. If the beginning and ending cash balances for the company were $4,700 and $14,400, what was the net cash change from investing activities?
A)An outflow or decrease of $3,550.
B)An inflow or increase of $1,150.
C)An inflow or increase of $3,550.
D)Zero.

Accepted Answer

The answer of Jackson Company had a net increase in...

Question 7

Yi Company provided services to a customer for $5,500 cash. Based on this information alone, which of the following statements is true?
A)Total assets increased and total stockholders' equity decreased.
B)Total assets were unchanged.
C)Liabilities decreased and net income increased.
D)Total assets increased and net income increased.

Accepted Answer

The transaction involves receiving cash, which increases the total assets of the company. Since there is no mention of any expense or cost involved in providing the service, net income will also increase. Therefore, total assets increased and net income increased. There is no information to suggest any change in liabilities, so options A and C can be eliminated. Option B, that total assets were unchanged, is incorrect.

Question 8

At the beginning of Year 2, Jones Company had a balance in common stock of $300,000 and a balance of retained earnings of $15,000. During Year 2, the following transactions occurred:Issued common stock for $90,000Earned net income of $50,000Paid dividends of $8,000Issued a note payable for $20,000 Based on the information provided, what is the total stockholders' equity on December 31, Year 2?
A)$147,000
B)$357,000
C)$427,000
D)$447,000

Accepted Answer

Total stockholders' equity = Common Stock + Retained Earnings + Net Income - Dividends

Common Stock = $300,000 + $90,000 = $390,000

Retained Earnings = $15,000 + $50,000 - $8,000 = $57,000

Total stockholders' equity = $390,000 + $57,000 = $447,000

Therefore, the correct answer is D, $447,000. - Beginning common stock: $300,000
- Common stock issued during the year: +$90,000
- Net income earned during the year: +$50,000
- Dividends paid during the year: -$8,000
- Beginning retained earnings: +$15,000
- Note payable issued during the year: +$20,000

Total stockholders' equity on December 31, Year 2:
= Beginning common stock + Common stock issued during the year + Net income earned during the year + Beginning retained earnings + Note payable issued during the year - Dividends paid during the year
= $300,000 + $90,000 + $50,000 + $15,000 + $20,000 - $8,000
= $447,000

Question 9

Jackson Company had a net increase in cash from operating activities of $10,000 and a net decrease in cash from financing activities of $2,000. If the beginning and ending cash balances for the company were $4,000 and $11,000, what was the net cash change from investing activities?
A)An outflow or decrease of $1,000
B)An inflow or increase of $2,000
C)An inflow or increase of $1,000
D)Zero

Accepted Answer

Beginning cash balance + Increase from operating activities - Decrease from financing activities +/- Increase or decrease from investing activities = Ending cash balance
$4,000 + $10,000 - $2,000 +/- Increase or decrease from investing activities = $11,000
$1,000 = Decrease from investing activities

Question 10

The financial statements of Calloway Company prepared at the end of the current year contained the following elements and corresponding amounts: Assets = $36,000; Liabilities = ?; Common Stock = $6,600; Revenue = $14,200; Dividends = $1,550; Beginning Retained Earnings = $4,550; Ending Retained Earnings = $8,600. Based on this information, what was the amount of expenses reported on Calloway's income statement for the current year?
A)$8,600
B)$17,200
C)$4,050
D)$10,150

Accepted Answer

The answer of The financial statements of Calloway Company prepared...

Question 11

Chow Company earned $3,300 of cash revenue, paid $1,900 for cash expenses, and paid a $650 cash dividend to its owners. Which of the following statements is true?
A)The net cash inflow from operating activities was $1,400.
B)The net cash outflow for investing activities was $650.
C)The net cash inflow from operating activities was $750.
D)The net cash outflow for investing activities was $1,400.

Accepted Answer

Net cash inflow from operating activities can be calculated as Cash Revenues – Cash Expenses = $3,300 - $1,900 = $1,400. The dividend paid to owners is not considered an operating expense, but rather a financing activity. Therefore, option A is correct. Option B is incorrect because there is no information given about investing activities. Option C and D are incorrect because they do not reflect the correct calculation of net cash inflow from operating activities.

Question 12

The financial statements of Calloway Company prepared at the end of the current year contained the following elements and corresponding amounts: Assets = $50,000; Liabilities = ?; Common Stock = $15,000; Revenue = $22,000; Dividends = $1,500; Beginning Retained Earnings = $3,500; Ending Retained Earnings = $7,500. Based on this information, what was the amount of expenses reported on Calloway's income statement for the current year?
A)$18,500
B)$13,000
C)$16,500
D)$10,000

Accepted Answer

We can use the basic accounting equation: Assets = Liabilities + Equity. Plugging in the given values, we get Liabilities = $50,000 - $15,000 = $35,000. We also know that Beginning Retained Earnings + Revenue - Expenses - Dividends = Ending Retained Earnings. Plugging in the given values, we can solve for Expenses: $3,500 + $22,000 - Expenses - $1,500 = $7,500. Simplifying, we get Expenses = $16,500.

Question 13

Chow Company earned $1,500 of cash revenue, paid $1,200 for cash expenses, and paid a $200 cash dividend to its owners. Which of the following statements is true?
A)The net cash inflow from operating activities was $100.
B)The net cash outflow for investing activities was $200.
C)The net cash inflow from operating activities was $300.
D)The net cash outflow for investing activities was $100.

Accepted Answer

Net cash inflow from operating activities = Cash revenue - Cash expenses = $1,500 - $1,200 = $300
There is no information given about investing activities, so we cannot determine whether there was a net cash outflow or inflow for investing activities. The cash dividend paid is a financing activity and does not affect the calculation of net cash inflow from operating or investing activities. The net cash inflow from operating activities is calculated as cash revenue minus cash expenses, which in this case is $1,500 - $1,200 = $300.

There is no information given about any investing activities, so we cannot determine any net cash outflow for that category.

The cash dividend paid to owners is not factored into either operating or investing activities, but rather falls under financing activities. However, the question did not ask for the net cash inflow or outflow for this category.

Question 14

Which financial statement matches asset increases from operating a business with asset decreases from operating the business?
A)Balance sheet
B)Statement of changes in equity
C)Income statement
D)Statement of cash flows

Accepted Answer

The income statement matches asset increases from operations (revenues)with asset decreases from operations (expenses).

Question 15

The financial statements of Calloway Company prepared at the end of the current year contained the following elements and corresponding amounts: Assets = $50,000; Liabilities = ?; Common Stock = $15,000; Revenue = $22,000; Dividends = $1,500; Beginning Retained Earnings = $3,500; Ending Retained Earnings = $7,500. What was the amount of total liabilities reported on the balance sheet as of the end of the current year?
A)$27,500
B)$31,500
C)$35,000
D)$42,500

Accepted Answer

Total liabilities can be calculated by using the accounting identity:
Assets = Liabilities + Equity
Therefore, Liabilities = Assets - Equity
Liabilities = $50,000 - $15,000 - $7,500 + $3,500
Liabilities = $31,000 - $4,000
Liabilities = $27,000
Therefore, the amount of total liabilities reported on the balance sheet as of the end of the current year is $27,000, which is closest to option A of $27,500.

Question 16

During Year 2, Chico Company earned $2,750 of cash revenue, paid $1,200 of cash expenses, and paid a $700 cash dividend to its owners. Based on this information alone, which of the following statements is not true?
A)Net income amounted to $1,550
B)Total assets increased by $850
C)Cash inflow from operating activities was $1,550
D)Cash outflow from financing activities was $850

Accepted Answer

The cash outflow from financing activities was $700, not $850, as the only financing activity mentioned is the payment of a $700 cash dividend.

Question 17

Which of the following financial statements provides information about a company as of a specific point in time?
A)Income statement
B)Balance sheet
C)Statement of cash flows
D)Statement of changes in stockholders' equity

Accepted Answer

The balance sheet provides information about a company's assets, liabilities, and equity as of a specific point in time, usually at the end of a fiscal period. The income statement, statement of cash flows, and statement of changes in stockholders' equity all provide information over a period of time. The balance sheet provides information about a company's assets, liabilities, and stockholders' equity as of a specific point in time, typically the end of a fiscal quarter or year. The income statement, statement of cash flows, and statement of changes in stockholders' equity all show activity over a period of time.

Question 18

Which of the following appears in the investing activities section of the statement of cash flows?
A)Cash inflow from interest revenue.
B)Cash inflow from the issuance of common stock.
C)Cash outflow for the payment of dividends.
D)Cash outflow for the purchase of land.

Accepted Answer

Cash outflow for the purchase of land is an investing activity as it involves the acquisition of long-term assets or investments. Cash inflow from interest revenue and cash inflow from the issuance of common stock are financing activities, while cash outflow for the payment of dividends is an operating activity. Cash outflow for the purchase of land is a cash flow from investing activities, which includes the acquisition and disposal of long-term assets such as property, plant, and equipment. Choices A and B are cash flows from operating and financing activities, respectively, while choice C is a cash outflow from financing activities.

Question 19

In which section of a statement of cash flows would the payment of cash dividends be reported?
A)Investing activities.
B)Operating activities.
C)Financing activities.
D)Dividends are not reported on the statement of cash flows.

Accepted Answer

The payment of cash dividends would be reported in the financing activities section of the statement of cash flows because it represents an outflow of cash related to the company's financing activities. The payment of cash dividends is considered a financing activity since it involves distributing funds to the company's owners/shareholders. This activity would be reported in the financing section of the statement of cash flows, along with other activities related to the company's financing and capital structure, such as issuing or repurchasing stock, taking out loans, or making debt payments.

Question 20

Retained earnings at the beginning and ending of the accounting period were $1,000 and $2,100, respectively. Revenues of $3,900 and dividends paid to stockholders of $900 were reported during the period. What was the amount of expenses reported for the period?
A)$3,000.
B)$1,100.
C)$2,800.
D)$1,900.

Accepted Answer

The change in retained earnings is calculated as: Ending Retained Earnings - Beginning Retained Earnings = Net Income - Dividends. So, $2,100 - $1,000 = Net Income - $900. Net Income = $2,000. Revenues - Expenses = Net Income, so $3,900 - Expenses = $2,000. Therefore, Expenses = $1,900.

Quiz 1: An Introduction to Accounting

Retained earnings at the beginning and ending of the accounting period were $300 and $800, respectively. Revenues of $1,100 and dividends paid to stockholders of $200 were reported during the period. What was the amount of expenses reported for the period?

Glavine Company repaid a bank loan with cash. The cash flow from this event should be reported as:

During Year 2, Chico Company earned $1,950 of cash revenue, paid $1,600 of cash expenses, and paid a $150 cash dividend to its owners. Based on this information alone,which of the following statements is not true?

Jackson Company had a net increase in cash from operating activities of $9,700 and a net decrease in cash from financing activities of $3,550. If the beginning and ending cash balances for the company were $4,700 and $14,400, what was the net cash change from investing activities?

Yi Company provided services to a customer for $5,500 cash. Based on this information alone, which of the following statements is true?

Jackson Company had a net increase in cash from operating activities of $10,000 and a net decrease in cash from financing activities of $2,000. If the beginning and ending cash balances for the company were $4,000 and $11,000, what was the net cash change from investing activities?

Chow Company earned $3,300 of cash revenue, paid $1,900 for cash expenses, and paid a $650 cash dividend to its owners. Which of the following statements is true?

Chow Company earned $1,500 of cash revenue, paid $1,200 for cash expenses, and paid a $200 cash dividend to its owners. Which of the following statements is true?

Which financial statement matches asset increases from operating a business with asset decreases from operating the business?

During Year 2, Chico Company earned $2,750 of cash revenue, paid $1,200 of cash expenses, and paid a $700 cash dividend to its owners. Based on this information alone, which of the following statements is not true?

Which of the following financial statements provides information about a company as of a specific point in time?

Which of the following appears in the investing activities section of the statement of cash flows?

In which section of a statement of cash flows would the payment of cash dividends be reported?

Retained earnings at the beginning and ending of the accounting period were $1,000 and $2,100, respectively. Revenues of $3,900 and dividends paid to stockholders of $900 were reported during the period. What was the amount of expenses reported for the period?