Question 1

Cape Co.started business this year.For this year,it had revenues of $240,000,expenses of $180,000 and cash flows from operating activities of $48,000,and paid dividends of $6,000.What is the amount of Retained Earnings at the end of Cape's first year of operations?

Accepted Answer

A)  $42,000
B)  $48,000
C)  $54,000
D)  $114,000E) A) and B)
F) B) and C)

Question 2

Borrowing money from a bank is a financing activity on the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 3

Following is a list of financial statement items and amounts for Vantage Service as of 12/31/Year 1,the end of its first year in operation.
 $\begin{array}{lr}
\text { Accounts Receivable } & 40,000 \
\text { Accounts Payable } & 30,000 \
\text { Cash } & 10,000 \
\text { Common Stock } & 20,000 \
\text { Notes Payable } & 20,000 \
\text { Equipment } & 50,000 \
\text { Sales Revenue } & 100,000 \
\text { Fuel Expense } & 15,000 \
\text { Rent Expense } & 20,000 \
\text { Advertising Expense } & 5,000 \
\text { Salaries and Wages Expense } & 20,000 \
\text { Retained Earnings } & ? \
\text { Dividends } & 10,000
\end{array}$ Required:
Prepare the Income Statement for the year ended December 31,Year 1.
Prepare the statement of retained earnings for the year ended December 31,Year 1.
Prepare the balance sheet for the year ended December 31,Year 1.

Accepted Answer

Explanation:Total Liabilities and S...

Question 4

To determine whether generally accepted accounting principles (GAAP) were followed in the preparation of financial statements,an examination of:

Accepted Answer

A)  tax documents would be performed by the IRS.
B)  the company's accounting records would be performed by the SEC.
C)  the financial statements and related documents would be performed by an independent auditor.
D)  the financial statements and related documents would be performed by the FASB.E) C) and D)
F) A) and D)

Question 5

Internal users of financial data include:

Accepted Answer

A)  investors.
B)  creditors.
C)  management.
D)  regulatory authorities.E) B) and D)
F) All of the above

Question 6

Match the business activity to the appropriate category.
-Company payment of a dividend

Accepted Answer

A)  Financing activity
B)  Operating activity
C)  Investing activityD) All of the above
E) None of the above

Question 7

Expenses are:

Accepted Answer

A)  equal to a company's liabilities.
B)  always less than revenues.
C)  the costs of doing business that are necessary to earn revenue.
D)  always less than the amount of cash a company has available.E) None of the above
F) A) and C)

Question 8

A company might report negative cash flows from financing activities when:

Accepted Answer

A)  it has purchased a significant amount of equipment.
B)  the market value of its stock has gone down.
C)  it has paid a cash dividend to its stockholders.
D)  it has borrowed money from a bank during the year.E) None of the above
F) C) and D)

Exam 1: Business Decisions and Financial Accounting

Correct Answer
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Explanation:Total Liabilities and S...
View Answer

Cape Co.started business this year.For this year,it had revenues of $240,000,expenses of $180,000 and cash flows from operating activities of $48,000,and paid dividends of $6,000.What is the amount of Retained Earnings at the end of Cape's first year of operations?

Correct Answer
verified

Internal users of financial data include:

Correct Answer
verified

Borrowing money from a bank is a financing activity on the statement of cash flows.

Correct Answer
verified

To determine whether generally accepted accounting principles (GAAP) were followed in the preparation of financial statements,an examination of:

Correct Answer
verified

A company might report negative cash flows from financing activities when:

Correct Answer
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Match the business activity to the appropriate category. -Company payment of a dividend

Correct Answer
verified

Expenses are:

Correct Answer
verified

Exam 1: Business Decisions and Financial Accounting

Correct Answerverified Explanation:Total Liabilities and S...View AnswerShow Answer

Cape Co.started business this year.For this year,it had revenues of $240,000,expenses of $180,000 and cash flows from operating activities of $48,000,and paid dividends of $6,000.What is the amount of Retained Earnings at the end of Cape's first year of operations?

Correct AnswerverifiedShow Answer

Internal users of financial data include:

Correct AnswerverifiedShow Answer

Borrowing money from a bank is a financing activity on the statement of cash flows.

Correct AnswerverifiedShow Answer

To determine whether generally accepted accounting principles (GAAP) were followed in the preparation of financial statements,an examination of:

Correct AnswerverifiedShow Answer

A company might report negative cash flows from financing activities when:

Correct AnswerverifiedShow Answer

Match the business activity to the appropriate category. -Company payment of a dividend

Correct AnswerverifiedShow Answer

Expenses are:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Explanation:Total Liabilities and S...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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