Question 1

Zippy had cash inflows from operations $60,500;cash outflows from investing activities of $47,000;and cash inflows from financing of $25,000.The net change in cash was:

Accepted Answer

Net Change in Cash = Cash Flows from Operating Activities + Cash Flows from Investing Activities + Cash Flows from Financing Activities
Net Change in Cash = $60,500 - $47,000 + $25,000
Net Change in Cash = $38,500 increase

Question 2

Rico's Taqueria had cash inflows from operating activities of $27,000;cash outflows from investing activities of $22,000,and cash outflows from financing activities of $12,000.Calculate the net increase or decrease in cash.

Accepted Answer

Net Increase/(Decrease)in Cash = Cash Flows from Operating Activities + Cash Flows from Investing Activities + Cash Flows from Financing Activities
Net Increase/(Decrease)in Cash = $27,000 - $22,000 - $12,000 = $-7,000
Therefore, the net increase in cash is a decrease of $7,000. Option C is the correct answer.

Question 3

The income statement reports all of the following except:

Accepted Answer

The income statement does not report on the assets owned by a business, it only reports on the revenues earned, expenses incurred, and net income or loss for a specific period of time.

Question 4

Dawson Electronic Services had revenues of $80,000 and expenses of $50,000 for the year.Its assets at the beginning of the year were $400,000.At the end of the year assets were worth $450,000.Calculate its return on assets.

Accepted Answer

Return on assets (ROA) is calculated as Net Income divided by Average Total Assets. Net Income is $80,000 - $50,000 = $30,000. Average Total Assets = ($400,000 + $450,000) / 2 = $425,000. ROA = $30,000 / $425,000 = 0.0706 or 7.1%.

Question 5

Accounts payable appear on which of the following statements?

Accepted Answer

Accounts payable are liabilities, and liabilities are reported on the balance sheet.

Question 6

Use the following information as of December 31 to determine equity.

Accepted Answer

Equity = Total Assets - Total Liabilities
Equity = ($507,000 + $63,000 + $87,000) - ($36,000 + $194,000)
Equity = $657,000 - $230,000
Equity = $297,000

Question 7

Determine the net income of a company for which the following information is available for the month of July.

Accepted Answer

The answer of Determine the net income of a company...

Question 8

Cragmont has beginning equity of $277,000,net income of $63,000,withdrawals of $25,000 and no additional investments by owners during the period.Its ending equity is:

Accepted Answer

Ending equity = Beginning equity + Net income - Withdrawals
Ending equity = $277,000 + $63,000 - $25,000
Ending equity = $315,000

Question 9

A company borrows $125,000 from the Northern Bank and receives the loan proceeds in cash.This represents a(n):

Accepted Answer

Borrowing money represents a financing activity as it involves raising funds from external sources such as banks or investors.

Question 10

Use the following information for Meeker Corp.to determine the amount of equity to report.

Accepted Answer

The answer of Use the following information for Meeker Corp.to...

Question 11

A company reported total equity of $145,000 at the beginning of the year.The company reported $210,000 in revenues and $165,000 in expenses for the year.Liabilities at the end of the year totaled $92,000.What are the total assets of the company at the end of the year?

Accepted Answer

The company's net income is revenues minus expenses, which is $210,000 - $165,000 = $45,000. The ending equity is the beginning equity plus net income, so $145,000 + $45,000 = $190,000. The accounting equation states that Assets = Liabilities + Equity. Therefore, the total assets at the end of the year are $92,000 (liabilities) + $190,000 (equity) = $282,000.

Question 12

Savvy Sightseeing had beginning equity of $72,000;revenues of $90,000,expenses of $65,000,and withdrawals by owners of $9,000.Calculate the ending equity.

Accepted Answer

The ending equity is calculated as: Beginning Equity + Revenues - Expenses - Withdrawals = $72,000 + $90,000 - $65,000 - $9,000 = $88,000.

Question 13

A company acquires equipment for $75,000 cash.This represents a(n):

Accepted Answer

Acquiring equipment is considered an investing activity, as it involves the purchase of a long-term asset that will be used to generate revenue over a period of time. Operating activities involve day-to-day business operations, financing activities involve obtaining or repaying financing, revenue activities involve generating income, and expense activities involve incurring costs.

Question 14

Determine the net income of a company for which the following information is available for the month of September.

Accepted Answer

The answer of Determine the net income of a company...

Question 15

Cash investments by owners are listed on which of the following statements?

Accepted Answer

Cash investments by owners are reflected in both the statement of owner's equity, where they increase the owner's capital, and the statement of cash flows, where they are shown as cash inflows from financing activities.

Question 16

Charlie's Chocolates' owner made investments of $50,000 and withdrawals of $20,000.The company has revenues of $83,000 and expenses of $64,000.Calculate its net income.

Accepted Answer

To calculate the net income, we need to subtract the total expenses from the total revenues. 
Total Revenues = $83,000 
Total Expenses = $64,000 
Net Income = Total Revenues - Total Expenses 
Net Income = $83,000 - $64,000 
Net Income = $19,000

However, we also need to take into account the investments and withdrawals made by the owner. 
Investments = $50,000 
Withdrawals = $20,000

Net Income = $19,000 + $50,000 - $20,000 
Net Income = $49,000

Therefore, the correct answer is D) $49,000.

Question 17

Flitter reported net income of $17,500 for the past year.At the beginning of the year the company had $200,000 in assets and $50,000 in liabilities.By the end of the year,assets had increased to $300,000 and liabilities were $75,000.Calculate its return on assets:

Accepted Answer

Return on assets (ROA) is calculated as Net Income divided by Average Total Assets. Average Total Assets = (Beginning Assets + Ending Assets) / 2 = ($200,000 + $300,000) / 2 = $250,000. ROA = $17,500 / $250,000 = 0.07 or 7.0%.

Question 18

Rent expense appears on which of the following statements?

Accepted Answer

Rent expense is a type of operating expense and is therefore included in the income statement. It is not included in the balance sheet, statement of owner's equity, statement of periodic expenses, or statement of cash flows.

Question 19

Zapper has beginning equity of $257,000,net income of $51,000,withdrawals of $40,000 and investments by owners of $6,000.Its ending equity is:

Accepted Answer

The answer of Zapper has beginning equity of $257,000,net income...

Question 20

A company's balance sheet shows: cash $22,000,accounts receivable $16,000,office equipment $50,000,and accounts payable $17,000.What is the amount of owner's equity?

Accepted Answer

Owner's Equity = Total Assets - Total Liabilities
Total Assets = Cash + Accounts Receivable + Office Equipment = $22,000 + $16,000 + $50,000 = $88,000
Total Liabilities = Accounts Payable = $17,000
Owner's Equity = $88,000 - $17,000 = $71,000

Quiz 1: Accounting in Business