MBA560 QUIZ 1 (100% SOLUTION) - 88722

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anjis_devis

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1. Hardin Company began operations in 2010. During the year, the following cash transactions occurred: • Issued stock for $40,000 • Borrowed $24,000 from bank • Provided services to customers for $53,000 cash • Paid back $8,000 of the loan from the bank • Paid rent expense, $9,000 • Paid operating expenses, $29,000 Assuming that Hardin engaged in no transactions during the year other than those listed above, what was the amount of net income or loss for the year? (Points : 2) $19,000 net income $15,000 net income $12,000 net income $11,000 net loss Question 2.2. Dale Company purchased land costing $2,400 by paying cash. The company earned $2,000 revenue on account and incurred $1,100 of operating expenses on account. As a result of these transactions: (Points : 2) Total assets increased by $2,400. Liabilities increased by $1,100. Total assets increased by $5,400. Both A and B. Question 3.3. Liabilities are: (Points : 2) claims of creditors. the owner’s interest in the company. claims of investors. both A and B. Question 4.4. Parrot Company paid a $300 cash dividend. Which of the following choices accurately reflects how this event would affect the company's financial statements? Balance Sheet Income Statement Row Assets = Liab. + Equity Rev. - Exp. = Net Inc. Statement of Cash Flows One NA = 300 + (300) NA - 300 = (300) NA Two (300) = NA + (300) NA - 300 = (300) (300) FA Three (300) = NA + (300) NA - NA = NA (300) FA Four (300) = NA + (300) NA - NA = NA (300) OA (Points : 2) Row One Row Two Row Three Row Four Question 5.5. At the end of the accounting period, Sefcik Company made an adjusting entry for supplies consumed. Which of the following choices reflects how this event would affect the company's financial statements? Row Assets = Liab. + Equity Rev. - Exp. = Net Inc. Cash Flow One + - = NA + NA NA - + = - NA Two - = NA + - NA - + = - NA Three - = - + NA NA - NA = NA NA Four + - = NA + NA NA - NA = NA + IA (Points : 2) Row One Row Two Row Three Row Four Question 6.6. As of December 31, 2009, Bueno Company had $1,000 in liabilities, $8,000 in common stock, and $2,500 in retained earnings. The total amount of assets on that date is: (Points : 2) $10,000 $12,000 $11,500 $7,500 Question 7.7. The Redding Company recorded salaries earned by employees but not yet paid. Which of the following represents the effect of this transaction on the financial statements? Row Assets = Liab. + Equity Rev. - Exp. = Net Inc. Cash Flow One + = + + NA + - NA = + - OA Two NA = + + - NA - + = - - OA Three - = NA + - NA - + = - NA Four NA = + + - NA - + = - NA Row One Row Two Row Three Row Four Question 8.8. The accounting equation may be written: (Points : 2) Revenues – Expenses = Net Income Assets = Liabilities Liabilities = Equity Assets = Claims on Assets Question 9.9. An element that is often present when fraud occurs is: (Points : 2) the availability of an opportunity the existence of some form of pressure the ability to rationalize all of the above Question 10.10. Which of the following would be included in the "cash flows from investing activities" section of the statement of cash flows? (Points : 2) Borrowed $10,000 from a local bank Paid $1,000 of expenses with cash Sold land for cash Issued common stock for cash Question 11.11. Expenses are shown on the: (Points : 2) income statement statement of changes in stockholders’ equity balance sheet all of the above Question 12.12. The claims of a business’s creditors are called: (Points : 2) assets liabilities equity revenue Question 13.13. Which of the following would be included in the "cash flows from financing activities" section of the statement of cash flows? (Points : 2) Collected cash from accounts receivable Finance Company loaned cash to another company Paid cash dividend to stockholders Purchased business insurance Question 14.14. Expenses that are matched with the period in which they are incurred are frequently called: (Points : 2) period costs frequency expenses market expenses working costs. Question 15.15. Accounting information is said to be reliable if: (Points : 2) it is based on recent (not longer than 6 months) information it was prepared by someone with good credentials in accounting, such as a certified public accountant. it can be independently verified it complies with rules and standards of the Internal Revenue Service Question 16.16. Which of the following groups has primary responsibility for establishing generally accepted accounting principles for businesses in the United States? (Points : 2) The U.S. Supreme Court Each state’s Secretary of the Treasury The Financial Accounting Standards Board The Internal Revenue Service Question 17.17. The purpose of the accrual basis of accounting is to: (Points : 2) report revenue when cash is received improve the matching of revenue and expense in the proper period report expenses when cash disbursements are made improve the company's earnings per share Question 18.18. An asset use transaction: (Points : 2) increases one asset and decreases another. decreases an asset and decreases a liability or equity. increases an asset and decreases a liability or equity. increases an asset and increases a liability or equity. Question 19.19. Which of the following accounts is a permanent account (an account that is not closed)? (Points : 2) Prepaid Insurance Service Revenue Salaries Expense Rent Expense Question 20.20. Which of the following lists represents the correct sequence of stages in an accounting cycle? (Points : 2) Record transactions, prepare statements, adjust accounts, and close temporary accounts Prepare statements, close temporary accounts, record transactions, and adjust accounts Close temporary accounts, record transactions, prepare statements, and adjust accounts Record transactions, adjust accounts, prepare statements, and close temporary accounts
Solution Description

1. Hardin Company began operations in 2010. During the year, the following cash transactions 

occurred:

  • Issued stock for $40,000
  • Borrowed $24,000 from bank
  • Provided services to customers for $53,000 cash
  • Paid back $8,000 of the loan from the bank
  • Paid rent expense, $9,000
  • Paid operating expenses, $29,000

Assuming that Hardin engaged in no transactions during the year other than those listed above, what was the amount of net income or loss for the year? (Points : 2)

$19,000 net income

$15,000 net income

$12,000 net income

$11,000 net loss

 Question 2.2. Dale Company purchased land costing $2,400 by paying cash. The company earned $2,000 revenue on account and incurred $1,100 of operating expenses on account. As a result of these transactions: (Points : 2)

Total assets increased by $2,400.

Liabilities increased by $1,100.

Total assets increased by $5,400.

Both A and B.
Question 3.3. Liabilities are: (Points : 2)

claims of creditors.

the owner’s interest in the company.

claims of investors.

both A and B.

Question 4.4. Parrot Company paid a $300 cash dividend. Which of the following choices accurately reflects how this event would affect the company's financial statements?

 

 

Balance Sheet

Income Statement

 

Row

Assets

=

Liab.

+

Equity

Rev.

-

Exp.

=

Net Inc.

Statement of Cash Flows

 

One

NA

=

300

+

(300)

NA

-

300

=

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