Chapter 1 Terms Questions With Answers Well Defined.
3 views 0 purchase
Course
INC.
Institution
INC.
The purpose of a balance sheet is to report the ______. - correct answer financial position of a business at a particular point in time
The balance sheet of a corporation reports ______. - correct answer only the results o...
The purpose of a balance sheet is to report the ______. - correct answer financial
position of a business at a particular point in time
The balance sheet of a corporation reports ______. - correct answer only the results
of the business' activities
At December 31, Aloe, Inc.'s assets equal $8,000 and stockholders' equity equals $5,000. Liabilities must
equal - correct answer $3,000
Companies typically prepare ______ financial statements each accounting period. - correct answer
4: The four financial statements are the balance sheet, income statement, statement of of stockholders'
equity, and the statement of cash flows.
Which of these headings and accounts would be found on a company's balance sheet? (Check all that
apply.) - correct answer Stockholders' equity
Cash
Retained earnings
Assets
Liabilities
Z Company bought land 20 years ago for $30,000. Over the last 20 years, the value of the land has
doubled. The increase in the land's value ______. - correct answer will not be
reported in Z Company's financial statements - Land is reported on the balance sheet at its original cost.
The increase in the value of the land will only be recorded in the accounting records when the land is
sold, not before then.
A balance sheet shows ______. - correct answer assets, liabilities, and stockholders'
equity at a single point in time - A balance sheet shows balances at a point in time; it does not show the
changes in the balances during the period. The income statement, statement of stockholders' equity and
statement of cash flows explain the changes in the balance sheet during the period.
, Which groups have claims to a business's assets? (Check all that apply.) - correct answer
stockholders
creditors
>The amount of creditors' claim to the business's assets is represented by liabilities and the
stockholders' claims is represented by total stockholders' equity. "Management" consists of employees;
they do not have a claim on the business for anything other than their paychecks.
True or false: The corporation, and not the owners, are viewed as owning the resources and as owing
the debts of the business. - correct answer True - The owners are considered
separate from the business entity. It is the business entity that owns the assets and owes the liabilities.
Which of the following statements are true? (Check all that apply.) - correct answer
Retained earnings increases when a company earns and keeps its profit.
Common stock increases when the company gets cash in exchange for stock.
Seesaws, Inc. has assets of $900 and liabilities of $400. Its stockholders' equity equals - correct answer
$500
The two sources of stockholders' equity are amounts ______. - correct answer -
earned and retained by the corporation
- paid in from shareholders
Which of the following are financial statements? (Check all that apply.) - correct answer
Statement of stockholders' equity
Income statement
Statement of cash flows
Balance sheet
Ace Electronics bought equipment for $4,000. Normally the equipment would have cost $4,500, but the
supplier gave Ace a special discount. Ace's balance sheet should report equipment of ______. - correct
answer $4,000
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller RealGrades. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $13.99. You're not tied to anything after your purchase.
