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The following transactions apply to Warren Fitness Center for 2012. 1) Started the business by issuing $38,000 of common stock for cash. 2) Provided services to clients and received $28,500 cash. 3) Borrowed $7,500 from the bank. 4) Paid $6,500 for rent of equipment. 5) Purchased land for $12,000. 6) Paid $16,600 of salary expense. 7) Cash dividends of $4,500 were paid to the stockholders. Required: a) What are the total assets of the business at the end of 2012? b) Prepare a Statement of Cash Flows for 2012.

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a) $38,000 + $28,500...

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


A) Financing activities.
B) Operating activities.
C) Purchasing activities.
D) Investing activities.

E) A) and C)
F) All of the above

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Petras Company engaged in the following transactions during 2012, its first year in operations: (Assume all transactions are cash transactions) 1) Acquired $950 cash from the issue of common stock. 2) Borrowed $420 from a bank. 3) Earned $600 of revenues. 4) Paid expenses of $250. 5) Paid a $50 dividend. During 2013, Petras engaged in the following transactions: (Assume all transactions are cash transactions) 1) Issued an additional $325 of common stock. 2) Repaid $220 of its debt to the bank. 3) Earned revenues of $750. 4) Incurred expenses of $360. 5) Paid dividends of $100. Petras Company's net cash inflow from operating activities for 2012 is


A) $600.
B) $550.
C) $350.
D) $300.

E) A) and D)
F) None of the above

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Which of the following could describe the effects of an asset exchange transaction on a company's financial statements? Which of the following could describe the effects of an asset exchange transaction on a company's financial statements? A) B) C) D)


A)
Which of the following could describe the effects of an asset exchange transaction on a company's financial statements? A) B) C) D)
B)
Which of the following could describe the effects of an asset exchange transaction on a company's financial statements? A) B) C) D)
C)
Which of the following could describe the effects of an asset exchange transaction on a company's financial statements? A) B) C) D)
D)
Which of the following could describe the effects of an asset exchange transaction on a company's financial statements? A) B) C) D)

E) C) and D)
F) A) and C)

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The types of resources needed by a business are financial, physical, and capital resources.

A) True
B) False

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The transaction, "earned cash revenue," affects which two accounts?


A) Revenue and Salaries Expense
B) Cash and Notes Payable
C) Cash and Revenue
D) Cash and Dividends

E) A) and B)
F) A) and D)

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In a market, consumers are resource providers.

A) True
B) False

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Jiminez Company paid a $300 cash dividend. Which of the following choices accurately reflects how this event affects the company's financial statements?  Assets = Liab. + Equity  Rev. − Exp. = Net Inc.  Cash Flow \begin{array} { | l | l | l | l | l | l | l | l | l | l | l| } \hline \text { Assets } & = & \text { Liab. } & + & \text { Equity } & \text { Rev. } & - & \text { Exp. } & = & \text { Net Inc. } & \text { Cash Flow } \\\hline\end{array}


A)
 NA =300+300 NA −300=300 NA \begin{array}{|l|l|l|l|l|l|l|l|l|l|l|}\text { NA } & =& 300 & +&300 & \text { NA } & - & 300 & =&300 & \text { NA } \\\hline\end{array}
B)
(300) =NA+(300) NA−300=(300) (300) FA\begin{array}{|l|l|l|l|l|l|l|l|l|l|l|}(300) &=&NA&+&(300) &NA&-& 300&=&(300) &(300) FA\\\hline\end{array}
C)
(300) =NA+(300) NA−NA=NA (300)  FA \begin{array}{|l|l|l|l|l|l|l|l|l|l|l|}\hline(300) & = & \mathrm{NA} & + & (300) & \mathrm{NA} & - & \mathrm{NA} & = & \mathrm{NA} & \text { (300) FA } \\\hline\end{array}
D)
(300) =NA+(300) NA−NA=NA(300) OA\begin{array}{|l|l|l|l|l|l|l|l|l|l|l|}\hline(300) & = & \mathrm{NA} & + & (300) & \mathrm{NA} & - & \mathrm{NA} & = & \mathrm{NA} & (300) \mathrm{OA} \\\hline\end{array}

E) A) and B)
F) A) and C)

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Managerial accounting provides information primarily to which of the following groups or individuals?


A) Internal users
B) Shareholders
C) External users
D) Internal users and Shareholders

E) B) and D)
F) All of the above

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If a corporation issues common stock for $20,000 cash, in which section of the statement of cash flows would this transaction be reported?

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Financing activities
Explanati...

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In a market, a company that manufactures cars would be referred to as a conversion agent.

A) True
B) False

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Which of the following represents effects of an asset use transaction on a company's financial statements?  Assets = Liab. + Equity  Rev. − Exp. = Net Inc.  Cash Flow \begin{array} { | l | l | l | l | l | l | l | } \hline \text { Assets } = & \text { Liab. } + & \text { Equity } & \text { Rev. } - & \text { Exp. } = & \text { Net Inc. } & \text { Cash Flow } \\\hline\end{array}


A)
−= NA +− NA − NA = NA -FA \begin{array} { | l | l | l | l | l | l | l | l | l | l | l } \hline - & = & \text { NA } & + & - & \text { NA } & - & \text { NA } & = & \text { NA } & \text {-FA } \\\hline\end{array}
B)
−=−+ NA  NA −−=−− IA \begin{array}{|l|l|l|l|l|l|l|l|l|l|l|}\hline- & = & - & + & \text { NA } & \text { NA } & - & - & = & - & - \text { IA } \\\hline\end{array}
C)
−=NA+−−−NA=−− OA \begin{array}{|l|l|l|l|l|l|l|l|l|l|l|}\hline- & = &NA & + &-&-& - &NA & = & - & - \text { OA } \\\hline\end{array}
D)
 None of these could represent the effects of an asset source transaction. \text { None of these could represent the effects of an asset source transaction. }

E) A) and B)
F) All of the above

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Expenses are shown on the


A) balance sheet.
B) income statement.
C) statement of changes in stockholders' equity.
D) income statement and statement of changes in stockholders' equity.

E) A) and B)
F) A) and C)

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Which of the following describes the effects of an asset use transaction on a company's financial statements? Which of the following describes the effects of an asset use transaction on a company's financial statements? A) B) C) D)


A)
Which of the following describes the effects of an asset use transaction on a company's financial statements? A) B) C) D)
B)
Which of the following describes the effects of an asset use transaction on a company's financial statements? A) B) C) D)
C)
Which of the following describes the effects of an asset use transaction on a company's financial statements? A) B) C) D)
D)
Which of the following describes the effects of an asset use transaction on a company's financial statements? A) B) C) D)

E) A) and B)
F) A) and C)

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Borrowing money from the bank is an example of an asset source transaction.

A) True
B) False

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


A) Income statement
B) Statement of changes in equity
C) Statement of cash flows
D) Balance sheet

E) A) and D)
F) A) and C)

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Which of the following is not an element of the financial statements?


A) Cash
B) Revenue
C) Assets
D) Distributions

E) A) and B)
F) C) and D)

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Accounts are subclassifications of the various elements of the financial statements.

A) True
B) False

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Callahan Company earned $1,500 of cash revenue, paid $1,000 for cash expenses, and paid a $200 cash dividend to its owners. Which of the following statements is true?


A) The net cash flow from operating activities was $500.
B) The net cash flow from investing activities was an outflow or decrease of $200.
C) The net cash flow from operating activities was $300.
D) Cash flows from financing activities were unchanged.

E) B) and C)
F) A) and D)

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Which type of accounting information is intended to satisfy the needs of external users of accounting information?


A) Cost accounting
B) Financial accounting
C) Tax accounting
D) Managerial accounting

E) All of the above
F) C) and D)

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