Question 1

Below are the account balances for Huffman Corporation at the end of December. Use only the appropriate accounts to prepare an income statement. $$\begin{array} { l r } 
 { \text { Accounts } } & \text { Balances } \
\hline \text { Cash } & \$ 5,200 \
\text { Salaries expense } & 2,300 \
\text { Retained earnings } & 2,500 \
\text { Advertising expense } & 1,200 \
\text { Equipment } & 12,400 \
\text { Service revenue } & 9,400 \
\text { Common stock } & 8,000 \
\text { Accounts payable } & 2,200
\end{array}$$

Accepted Answer

The answer of Below are the account balances for Huffman...

Question 2

Below are typical transactions for a company. Indicate whether each transaction is classified as a financing, investing, or operating activity.

Accepted Answer

The answer of Below are typical transactions for a company....

Question 3

The Financial Accounting Standards Board's conceptual framework does not prescribe Generally Accepted Accounting Principles. It provides an underlying foundation for the development of accounting standards and interpretation of accounting information.

Accepted Answer

The conceptual framework does not prescribe GAAP, but rather provides guidance for the development and interpretation of GAAP.

Question 4

At the end of the current period, Maltese, Inc. reports the following amounts: Assets = $50,000; Liabilities = $28,000; Dividends = $4,000; Revenues = $22,000; Expenses = $16,000. Calculate net income and stockholders' equity at the end of the period.

Accepted Answer

The answer of At the end of the current period,...

Question 5

Public accounting firms are professional service firms that traditionally have focused on three areas: auditing, tax preparation/planning, and business consulting.

Accepted Answer

Public accounting firms are known for providing services in auditing, tax preparation/planning, and business consulting.

Question 6

Klein Interiors has the following account balances at the end of the year. Use only the appropriate accounts to prepare a balance sheet. $$\begin{array} { | l | r | } 
\hline  { \text { Accounts } } & \text { Balances } \
\hline \text { Equipment } & \$ 78,000 \
\hline \text { Accounts Payable } & 12,000 \
\hline \text { Common Stock } & 20,000 \
\hline \text { Service Revenue } & 62,000 \
\hline \text { Cash } & 8,000 \
\hline \text { Retained Earnings } & \mathbf { ? } \
\hline \text { Salaries Expense } & 38,000 \
\hline \text { Notes Payable } & 25,000 \
\hline
\end{array}$$

Accepted Answer

The answer of Klein Interiors has the following account balances...

Question 7

Auditors are trained individuals hired by a company as an independent party to express a professional opinion of the accuracy of that company's financial statements.

Accepted Answer

This is a defining characteristic of auditors. They are trained professionals hired to give an independent and objective opinion of a company's financial statements.

Question 8

Describe the three fundamental business activities that accountants measure. What account classifications are typically associated with each type of business activity?

Accepted Answer

The answer of Describe the three fundamental business activities that...

Question 9

The primary objective of financial reporting is to provide useful information to managers in making decisions.

Accepted Answer

Financial reporting is intended primarily to provide information to investors and creditors.

Question 10

The 1934 act gives the Securities and Exchange Commission (SEC) the power to require companies with publicly traded securities to prepare periodic financial statements for distribution to investors and creditors.

Accepted Answer

The 1934 act, also known as the Securities Exchange Act, indeed empowers the SEC to require companies with publicly traded securities to file financial statements on a regular basis, such as quarterly and annually. This is aimed at promoting transparency and providing investors and creditors with the necessary information to make informed decisions.

Question 11

At the end of the current period, Rogers Company reports the following amounts: Assets = $25,000; Liabilities = $15,000; Dividends = $3,000; Revenues = $20,000; Expenses = $13,000. Calculate net income and stockholders' equity at the end of the period.

Accepted Answer

The answer of At the end of the current period,...

Question 12

Define accounting. Describe the two primary functions of financial accounting and its role in our society.

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The answer of Define accounting. Describe the two primary functions...

Question 13

Below are typical transactions for a company. Indicate whether each transaction is classified as a financing, investing, or operating activity.

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The answer of Below are typical transactions for a company....

Question 14

Account classifications include assets, liabilities, stockholders' equity, dividends, revenues, and expenses. Indicate the account classification for each account name.

Accepted Answer

The answer of Account classifications include assets, liabilities, stockholders' equity,...

Question 15

At the beginning of the year (January 1), Maurice and Sons has $12,000 of common stock outstanding and retained earnings of $4,200. During the year, the company reports net income of $3,200 and pays dividends of $1,200. In addition, the company issues additional common stock for $5,000. Prepare the statement of stockholders' equity at the end of the year (December 31).

Accepted Answer

The answer of At the beginning of the year (January...

Question 16

The role of auditors is to help ensure that management has in fact appropriately applied Generally Accepted Accounting Principles (GAAP) in preparing the company's financial statements.

Accepted Answer

Auditors are responsible for reviewing and assessing the financial statements of a company to ensure that they are prepared in accordance with GAAP. Their role is to provide an independent assessment of the accuracy and reliability of the financial information presented to stakeholders.

Question 17

List and describe the four financial statements most frequently provided to external users.

Accepted Answer

The answer of List and describe the four financial statements...

Question 18

Below is information related to retained earnings for five independent situations. Calculate the answer to each.
1. A company reports an increase in retained earnings of $3,200 and net income of $4,800. What is the amount of dividends?
2. A company reports beginning retained earnings of $1,800, net income of $1,200, and $200 dividends. What is the amount of ending retained earnings?
3. A company reports an increase in retained earnings of $2,500 and dividends of $1,500. What is the amount of net income?
4. A company reports ending retained earnings of $2,700, net income of $900, and dividends of $500. What is the amount of beginning retained earnings?
5. A company reports an increase in retained earnings of $500 and net income of $1,200. What is the amount of dividends?

Accepted Answer

The answer of Below is information related to retained earnings...

Question 19

Use the following information available at the end of 2012 to prepare an income statement and balance sheet on December 31, 2012, for Goldie Company.
Fees for services performed during the year, $120,000
Accounts payable, $18,500
Accounts receivable, $17,300
Miscellaneous costs for the year, $8,700
Supplies on hand, $2,700
Notes payable outstanding, $30,000
Interest cost on the note for the year, $3,000
Equipment, $84,400
Cash on hand, $11,200
Salaries cost for the year, $71,500
Supplies cost for the year, $9,400
Rent cost for the year, $12,000
Common stock that has been issued, $60,000
Retained earnings at the end of the year, $7,100

Accepted Answer

The answer of Use the following information available at the...

Question 20

Below is cash flow information for five independent situations. Calculate the answer to each.
1. A company reports operating cash flows of $3,200, investing cash flows of $700, and financing cash flows of -$400. What is the amount of the change in total cash?
2. A company reports operating cash flows of $1,800, investing cash flows of -$400, and financing cash flows of -$1,100. If the beginning cash amount is $500, what is the ending cash amount?
3. A company reports operating cash flows of $700, investing cash flows of $300, and a change in total cash of $100. What is the amount of cash flows from financing activities?
4. A company reports operating cash flows of $600, financing cash flows of $400, and a change in total cash of $100. What is the amount of cash flows from investing activities?
5. A company reports investing cash flows of -$1,400, financing cash flows of $900, and a change in total cash of $200. What is the amount of cash flows from operating activities?

Accepted Answer

The answer of Below is cash flow information for five...

Quiz 1: Accounting Information and Decision Making

Below are typical transactions for a company. Indicate whether each transaction is classified as a financing, investing, or operating activity.

The Financial Accounting Standards Board's conceptual framework does not prescribe Generally Accepted Accounting Principles. It provides an underlying foundation for the development of accounting standards and interpretation of accounting information.

At the end of the current period, Maltese, Inc. reports the following amounts: Assets = $50,000; Liabilities = $28,000; Dividends = $4,000; Revenues = $22,000; Expenses = $16,000. Calculate net income and stockholders' equity at the end of the period.

Public accounting firms are professional service firms that traditionally have focused on three areas: auditing, tax preparation/planning, and business consulting.

Auditors are trained individuals hired by a company as an independent party to express a professional opinion of the accuracy of that company's financial statements.

Describe the three fundamental business activities that accountants measure. What account classifications are typically associated with each type of business activity?

The primary objective of financial reporting is to provide useful information to managers in making decisions.

The 1934 act gives the Securities and Exchange Commission (SEC) the power to require companies with publicly traded securities to prepare periodic financial statements for distribution to investors and creditors.

At the end of the current period, Rogers Company reports the following amounts: Assets = $25,000; Liabilities = $15,000; Dividends = $3,000; Revenues = $20,000; Expenses = $13,000. Calculate net income and stockholders' equity at the end of the period.

Define accounting. Describe the two primary functions of financial accounting and its role in our society.

Below are typical transactions for a company. Indicate whether each transaction is classified as a financing, investing, or operating activity.

Account classifications include assets, liabilities, stockholders' equity, dividends, revenues, and expenses. Indicate the account classification for each account name.

The role of auditors is to help ensure that management has in fact appropriately applied Generally Accepted Accounting Principles (GAAP) in preparing the company's financial statements.

List and describe the four financial statements most frequently provided to external users.