2024 accounting jam master

Which ONE of the following statements best describes the term 'liability'?

• An excess of equity over current assets

• Resources to meet financial commitments as they fall due

• The residual interest in the assets of the entity after deducting all its liabilities

• A present obligation of the entity arising from past events

___________________ are recognized when a decrease in future economic benefits related to a decrease in an asset or an increase of a liability has arisen that can be measured reliably.

• EXPENSES

• REVENUE

• INCOME

• ASSETS

Which of the following statements is not normally an objective of financial reporting?

• Maximizing profitsTo provide information about an entity's assets and claims against those assets

• To provide information that is useful in assessing an entity's sources and uses of cash.

• To provide information that is useful in lending and investing decisions.

• To provide information about an entity's liquidation value.

Which of the following is an internal user of a company's financial information?

• Board of directors.

• Stockholders in the company

• Holders of the company's bonds

• Creditors with long-term contracts with the company.

A chart of accounts is

• a subsidiary ledger.

• a listing of all account titles.

• a general ledger.

• a general journal.

The debit and credit analysis of a transaction normally takes place

• when the entry is posted to a subsidiary ledger.

• when the entry is recorded in a journal.

• when the trial balance is prepared.

• when the financial statements are prepared.

Moon Company purchased equipment on November 1, 2016, by giving its supplier a 12-month, 9 percent note with a face value of 48,000. The December 31, 2016, adjusting entry is

• debit Interest Expense and credit Cash, 720.

• debit Interest Expense and credit Interest Payable, 720.

• debit Interest Expense and credit Interest Payable, 1,080.

• debit Interest Expense and credit Interest Payable, 4,320.

Which of the following would NOT be reported in the stockholders' equity section of the balance sheet?

• Retained earnings appropriated for future plant expansion

• Dividends declared on preferred stock

• Paid-in capital in excess of par value

• Deficit in retained earnings

Lobo Co. was incorporated on July 1, 2016, with 200,000 from the issuance of stock and borrowed funds of 30,000. During the first year of operations, net income was 10,000. On December 15, Lobo paid an 800 cash dividend. No additional activities affected owners' equity in 2016. At December 31, 2016, Lobo's liabilities had increased to 37,600. In Lobo's December 31, 2016, balance sheet, total assets should be reported at:

• 246,800.

• 264,800

• 248,600

• 246,000

The following changes in Patriot Corporation's account balances occurred during 2016: Increase Assets .................................................. ₱ 267,000 Liabilities ............................................. 81,000 Capital Stock ........................................... 198,000 Patriot paid dividends of ₱39,000 during the year. There were no changes in Retained Earnings for 2016 except dividends and net income. What was Patriot's net income for 2016?

• 27,000

• 72,000

• 22,000

• 81000