College Acct 1- Chapter 1

A company's balance sheet shows: cash $25,000, A/R $20,000, office equipment $50,000 and accounts payable $20,000. What is the amount of stockholders' equity?

• $105,000

• $17,000

• $90,000

• $75,000

• $31,000

If a company uses $850 of its cash to purchase supplies, what would be the effect on the accounting equation?

• Assets increase $850 and liabilities decrease $850

• Assets decrease $850 and equity decreases $850

• Assets increase $850 and liabilities increase $850

• One asset account increases $850 and another asset decreases $850, causing no effect.

• Assets decrease $850 and equity increases $850

Distribution of cash or other assets by a business to its stockholders (owners) are called:

• Expenses

• Dividends

• Assets

• Retained Earnings

• None of the above

Determine the net income for the month: Salaries Expense $18,000, Interest Expense $10,000, Rent Expense $20,000 and Consulting Revenue $100,000.

• $52,000

• $148,000

• $30,000

• $10,000

• $40,000

If a company receives $2,000 from its sole owner to establish a corporation, what would be the effect on the accounting equation?

• Liabilities increase $2,000 and equity decreases $2,000

• Assets increase $2,000 and liabilities decrease $2,000

• Assets decrease $2,000 and equity decreases $2,000

• Assets increase $2,000 and equity increases $2,000

• Assets increase $2,000 and liabilities increase $2,000

Retained Earnings is carried from the _______________ to the ____________ .

• Balance Sheet, Income Statement

• Income Statement, Balance Sheet

• Statement of Retained Earnings, Balance Sheet

• Balance Sheet, Statement of Retained Earnings

• Statement of Cash Flows, Income Statement

At the end of last year, the company's assets totaled $960,000 and its liabilities totaled $740,000. During the current year, assets increased by $8,000 and liabilities increased by $4,000. What is the balance in stockholders' equity at the end of the current year?

• $802,000

• $224,000

• $125,000

• $178,000

• $190,000

If a company purchases a piece of land for $145,000, its assessed value is $210,000 and the seller originally bought the land for $110,000, which value should the land be recorded in the purchaser's books at?

• $210,000

• $110,000

• $125,000

• $145,000

• None of the above

Resources a company owns or controls that are expected to yield future benefits are:

• Assets

• Revenues

• Liabilities

• Stockholders' Equity

• Expenses

If assets are $100,000 and liabilities are $30,000, then equity equals:

• $100,000

• $70,000

• $30,000

• $130,000

• None of the above