Financial Statements
Net income (loss) appears in which two financial statements?
Income statement & Statement of stockholders' equity
Transferring the debit and credit information from the journal to individual accounts in the general ledger is called?
Posting
On September 1, 2024, Gold Gaming sold 400 one-year subscriptions to its online gaming website for $90 each. The total amount received was credited to Deferred Revenue. What would be the required adjusting entry at December 31, 2024?
Deferred Revenue $12,000
Service Revenue $12,000
Which business form has the advantage of limited liability?
Corporation
How many of the following transactions would increase a company's total liabilities?
Issued common stock for cash.
Provided services to customers on account.
Purchased equipment by signing a note payable.
Collected cash for customers for service to be performed next month.
Two
Using the information below from the account records of Thomas Corporation, determine stockholders' claim to the company's resources.
Assests = $1,200,000
Retained Earnings = $250,000
Liabilities = $800,000
Net Income = $100,000
$400,000
Follow up: What financial statement?
What are the standards for presenting financial accounting information?
Generally Accepted Accounting Principles (GAAP)
Which of the following accounts would not have a balance after closing entries?
Deferred revenue
Supplies
Prepaid rent
Dividends
Dividends
Which of the following transactions are financing activities?
Borrow $60,000 from the bank.
Purchase $12,000 in supplies.
Provide services to customers for $27,000.
Pay a utility bill of $950.
Purchase a delivery truck for $14,500.
Receive $35,000 from issuing common stock.
Two
Expenses normally carry a _____ balance and are shown in the _____.
Debit; Income statement
A classified balance sheet
A) Shows only current assets and current liabilities.
B) Shows changes in assets, liabilities, revenues, and expenses
C) Contains confidential information
D) Shows subtotals for current assets and current liabilities.
Shows subtotals for current assets and current liabilities.
The revenue recognition principle states that revenues should be recognized in the period...
A company receives a utility bill each month for services received. The company’s policy is to pay the utility bill within 30 days of receipt. On December 31, 2021, the company receives a utility bill of $4,200 for the month of December and plans to pay the bill by January 30, 2022. What adjusting entry, if any, will the company record on December 31, 2021?
Utilities Expense $4,200
Utilities Payable $4,200
The full set of procedures used to accomplish the measurement/communication process of financial accounting is referred to as ...
... Accounting cycle
Assume that $17,800 cash is paid for insurance to cover the next year. The appropriate debit and credit would be:
Prepaid Insurance $17,800
Cash $17,800
What are the financial statements that record activity over an interval of time?
Income statement & Statement of cash flow
Of the following accounts, which ones have temporary balances?
1) Service revenue
2) Dividends
3) Salaries expense
4) Common stock
5) Retained earnings
6) Cash
1, 2, and 3
Adjusting entries:
A) Always involve at least one income statement account and one balance sheet account.
B) Often include the Cash account.
C) Adjust the balance of revenues and expenses to zero.
D) Usually are recorded at the beginning of the accounting period.
Always involve at least one income statement account and one balance sheet account.
Stimpleton Company engages in the following cash payments:
Purchase equipment, $2,000
Pay rent, $500
Repay loan to the bank, $5,000
Pay workers' salaries, $1000
What is the total amount of cash paid for operating activities?
$1,500
A company received a bill for newspaper advertising services, $400. The bill will be paid in ten days. How would the transaction be recorded today?
Advertising Expense $400
Accounts Payable $400
What is the correct order for preparing the financial statements?
1) Income statement
2) Statement of stockholder's equity
3) Balance sheet
4) Statement of cash flow
Financial accounting does not deal with which of the following?
A) Measuring a company's economic activity
B) Preparing financial reports
C) Providing information to internal users
D) Communicating financial results to investors
Providing information to internal users
On May 1, 2021, Townsley borrowed $250,000 from Prime Bank by signing a three-year, 6% note payable. Interest is due each May 1. What adjusting entry, if any, should Townsley record on December 31, 2021?
Interest Expense $10,000
Interest Payable $10,000
What is the total amount of dividends the company paid to stockholders int he current period?
Beginning retained earnings, $54,000
Ending retained earnings, $110,000
Decrease in cash, $10,000
Net income, $84,000
Change in stockholders' equity, $15,000
$28,000
How many of the following have a normal debit balance?
Accounts Payable
Cash
Prepaid Rent
Common Stock
Salaries Payable
Equipment
Supplies
Rent Expense
5