Question 1

The accounting equation may be expressed as

Accepted Answer

Assets = Liabilities + Stockholders' Equity.The accounting equation is a fundamental accounting principle that states that the total assets of a company must equal the sum of its liabilities and stockholders' equity. This equation is used to ensure that the company's financial statements are balanced and that the company's assets are properly accounted for.

Question 2

Jimmy's Repair Shop started the year with total assets of $300,000 and total liabilities of $240,000.During the year, the business recorded $630,000 in revenues, $330,000 in expenses, and dividends of $60,000.The net income reported by Jimmy's Repair Shop for the year was

Accepted Answer

The answer of Jimmy's Repair Shop started the year with...

Question 3

Ashley's Accessory Shop started the month of June 2022 with total assets of $210,000 and total liabilities of $120,000.During June, the business recorded $330,000 in revenues, $165,000 in expenses, and dividends of $60,000.Stockholders' equity at the end of June was

Accepted Answer

Stockholders' equity at the beginning of June was $90,000 ($210,000 assets - $120,000 liabilities). During June, net income was $165,000 ($330,000 revenues - $165,000 expenses). After paying $60,000 in dividends, the stockholders' equity increased by $105,000 ($165,000 net income - $60,000 dividends). Therefore, stockholders' equity at the end of June was $195,000 ($90,000 + $105,000).

Question 4

If total liabilities increased by $69,000 during a period of time and stockholders' equity decreased by $27,000 during the same period, then the amount and direction (increase or decrease) of the period's change in total assets is a(n)

Accepted Answer

According to the accounting equation (Assets = Liabilities + Equity), if liabilities increase by $69,000 and equity decreases by $27,000, the net effect on assets is an increase of $42,000 ($69,000 - $27,000).

Question 5

The retained earnings statement

Accepted Answer

The retained earnings statement summarizes the changes in retained earnings for a specific period of time, showing how net income and dividends affect the retained earnings balance.

Question 6

A company's total liabilities decreased by $105,000 and its stockholders' equity decreased by $35,000 during a period of time.By what amount and in what direction must the company's total assets have changed during that same period?

Accepted Answer

The answer of A company's total liabilities decreased by $105,000...

Question 7

The total liabilities of Hickory Construction Co.decreased by $90,000 during the month of August 2022.Stockholders' equity increased by $30,000 during this period.By what amount and in what direction must total assets have changed during August?

Accepted Answer

According to the accounting equation (Assets = Liabilities + Equity), if liabilities decrease by $90,000 and equity increases by $30,000, assets must decrease by $60,000 to keep the equation balanced.

Question 8

During September 2022, Blowing Rock Diner's total liabilities decreased by $75,000 and its stockholders' equity increased by $15,000.The company's total assets must change by what amount and in what direction during that same period?

Accepted Answer

According to the accounting equation (Assets = Liabilities + Equity), if liabilities decrease by $75,000 and equity increases by $15,000, the total change in assets must be a decrease of $60,000 to keep the equation balanced.

Question 9

Liabilities of a company are owed to its

Accepted Answer

Liabilities of a company are financial obligations owed to creditors, who are entities or individuals that have lent money or provided goods and services to the company on credit.

Question 10

If total liabilities increased by $90,000 and stockholders' equity increased by $30,000 during a period of time, then total assets must change by what amount and direction during that same period?

Accepted Answer

According to the accounting equation, Assets = Liabilities + Stockholders' Equity. If liabilities increase by $90,000 and stockholders' equity increases by $30,000, then assets must increase by $90,000 + $30,000 = $120,000.

Question 11

A balance sheet shows

Accepted Answer

A balance sheet shows the financial position of a company at a specific point in time, and it includes assets, liabilities, and stockholders' equity. Revenues, expenses, dividends, and other items are reported on the income statement and statement of cash flows.

Question 12

The balance sheet

Accepted Answer

The balance sheet provides a snapshot of a company's financial position at a specific point in time, detailing its assets, liabilities, and stockholders' equity.

Question 13

Ashley's Accessory Shop started the month of June 2022 with total assets of $210,000 and total liabilities of $120,000.During June, the business recorded $330,000 in revenues, $165,000 in expenses, and dividends of $60,000.The net income reported by Ashley's Accessory Shop for the month of June was

Accepted Answer

The answer of Ashley's Accessory Shop started the month of...

Question 14

Which of the following is not a satisfactory statement of the accounting equation?

Accepted Answer

The correct accounting equation is Assets = Liabilities + Stockholders' Equity. Option A rearranges this incorrectly.

Question 15

Kilmer Corporation began 2022 with total stockholder's equity of $1,270,000, including retained earnings of $930,000.During the year, the company issued $1,260,000 of common stock, recorded expenses of $3,600,000, and paid dividends of $240,000.If Kilmer's ending retained earnings was $990,000, what was the company's revenue for 2022?

Accepted Answer

The answer of Kilmer Corporation began 2022 with total stockholder's...

Question 16

Lankston Company began the year by issuing $120,000 of common stock for cash.The company recorded revenues of $1,100,000, expenses of $960,000, and paid dividends of $60,000.What was Lankston's net income for the year?

Accepted Answer

The answer of Lankston Company began the year by issuing...

Question 17

Gilkey Corporation began the year with retained earnings of $310,000.During the year, the company issued $420,000 of common stock, recorded expenses of $1,200,000, and paid dividends of $80,000.If Gilkey's ending retained earnings was $330,000, what was the company's revenue for the year?

Accepted Answer

The answer of Gilkey Corporation began the year with retained...

Question 18

Liabilities

Accepted Answer

Liabilities are debts and obligations that a company owes to others.

Question 19

Jimmy's Repair Shop started the year with total assets of $300,000 and total liabilities of $240,000.During the year, the business recorded $630,000 in revenues, $330,000 in expenses, and dividends of $60,000.Stockholders' equity at the end of the year was

Accepted Answer