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ACG 2021 Final Exam Questions and answers, rated A+.

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ACG 2021 Final Exam Questions and answers, rated A+. Which of the following would appear on an income statement? a. Cash b. All of these appear on income statements c. Retained earnings d. Accounts payable e. Service revenue - e. Service Revenue The income statement reports reven...

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  • February 4, 2023
  • 27
  • 2022/2023
  • Exam (elaborations)
  • Questions & answers

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  • acg 2021 final exam questions and answers
  • rated a which of the following would appear on an income statement a cash b all of these appear on income statements c retained earnings d acco

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ACG 2021 Final Exam Questions and
answers, rated A+.


Which of the following would appear on an income statement?

a. Cash

b. All of these appear on income statements

c. Retained earnings

d. Accounts payable

e. Service revenue - ✔✔e. Service Revenue



The income statement reports revenues, expenses, and net income.



This information relates to Harold Corporation:

Dividends, $5,000

Sales revenue, $75,000

Cash, $15,000

Salaries and wages expense, $20,000

Rent expense, $10,000

How much was its net income? - ✔✔Net income equals the revenues earned during the year minus the
expenses incurred during the year.



Net income = Revenue - expenses

Net income = $75,000 - 20,000 - 10,000 = $45,000



Dividends is not an expense.

,In which of the following sequences are these financial statements usually prepared?



a. The balance sheet is prepared before the retained earnings statement.

b. The balance sheet is prepared before the inncome statement.

c. The retained earnings statement is prepared before the income statement.

d. None of these

e. All of these - ✔✔d. None of these



The financial statements are prepared in the following order: income statement, retained earnings
statement, and balance sheet. This is because net income (from the income statement) is a required
input for the retained earnings statement, ending retained earnings (from the retained earnings
statement) is a required input for the balance sheet.



Jeremiah Company recorded the following cash transactions for the year:

Collected $460,000 from customers

Collected $50,000 from lenders

Paid $10,000 to purchase office equipment.

Paid $140,000 for salaries.

Paid $20,000 in dividends.

Paid $260,000 of goods and services

What was the company's net cash provided by operating activities for the year? - ✔✔Net cash flow
provided by operating activities = $460,000 - 140,000 - 260,000 = $60,000



Purchasing office equipment (or any PPE) is an investing activity, NOT an operating activity.



Chris's Maid Service began the year with total assets of $100,000 and stockholders' equity of $40,000.
During the year the company earned $110,000 in net income and paid $5,000 in dividends. Total assets
at the end of the year were $240,000. How much are total liabilities at the end of the year? - ✔✔40k +
110k -5k = 145k Ending SE



Ending Assets is 240k.

, Use the accounting equation to find Ending Liabilities: Assets = Liabilities + Stockholders' equity



240k = L + 145k



Solve for L, Ending Liabilities = 95k



An annual report includes all of the following except:



a management discussion and analysis section.

an auditor's report.

a listing of all of the stockholders.

notes to the financial statements.

an income statement. - ✔✔a listing of all of the stockholders.



Primary Components of an Annual Report:

Introduction Section

Income Statement

Balance Sheet

Statement of Cash Flows

Notes to Financial Statements



May also include:

A management discussion and analysis section.

An auditor's report.



When the auditor is satisfied that the financial statements provide a fair representation of the
company's financial position and results of operation in accordance with generally accepted accounting
principles, the auditor will express - ✔✔an unqualified opinion.

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