1.

Question 1

The beginning balance in total assets is $100,000 and total liability $30,000. The ending balance in total assets is $120,000 and total liability $20,000. Which of the following is possible?

1 point

Net income (or profit) of $10,000, no changes in the other Owners' Equity accounts.

Net income (or profit): $40,000; dividends paid: $10,000; no changes in other Owners' Equity accounts.

Net loss of $10,000, no changes in the other Owners' Equity accounts.

Net loss of $30,000, no changes in the other Owners' Equity accounts.

2.

Question 2

Under U.S. GAAP, which of the following activity is categorized as Financing Activity in the Statement of Cash Flows?

1 point

Payment of Interest on Debt

Receipt of Dividends

Receipt of Interest on Investments

Payment of Dividends

3.

Question 3

In year 1, Company A has the following info in its financial statements: Retained Earnings (beginning balance) of $32,000; Retained Earnings (ending balance) of $95,000; Revenue of $100,000, Expenses (including tax expense) of $30,000, and dividends declared $7,000.

What amount will be shown as Net Income in Income Statement?

1 point

$77,000

$63,000

$95,000

$70,000

4.

Question 4

The net increase in Accounts Receivable (AR) amounts to $30,000 and the net decrease in Wages Payable (WP) is $20,000. Assuming no accounts were written off for lack of payment, what is the net effect of AR and WP on the adjustments to Net Income if the indirect method is used in the Statement of Cash Flows?

1 point

Minus $10,000

Plus $50,000

Plus $10,000

Minus $50,000

5.

Question 5

The balance in PP&E on Company A's Year 1 Balance Sheet is $20,000 and the balance in PP&E on its Year 2 Balance Sheet is $50,000. Depreciation expense recorded during Year 2 totaled 5,000. The company sold some equipment with a net book value of $2,000. How much PP&E did the company purchase during Year 2? Assuming no other transactions affected the account during the year.Hint: you may find it helpful to use a t-account as you work through this question.

1 point

$57,000

$35,000

$37,000

$30,000

6.

Question 6

The beginning balance in Accounts Receivable on Company A's Year 2 Balance Sheet is $20,000. Sales on account during Year 2 are $200,000, cash collections from customers are $105,000, and an account for a customer owing $5,000 was written off because the company didnt think the customer would pay. What is the ending balance in AR on the Year 2 Balance Sheet? Assuming no other transactions affected the account during the year.

Hint: you may find it helpful to use a t-account as you work through this question.

1 point

$120,000

$115,000

$95,000

$110,000

7.

Question 7

The beginning balance in Retained Earnings is $20,000 and the ending balance is $60,000. Net Income is $70,000. Which of the following will be found in the Statement of Cash Flows prepared using the Indirect Method?

1 point

Net income of $70,000 in Operating Activities section;

Payment of dividends of $30,000 in Financing Activities section

Change in Retained Earnings of $40,000 in Financing Activities section

Net income of $70,000 in Operating Activities section;

Payment of dividends of $30,000 in Operating Activities section

Change in Retained Earnings of $40,000 in Operating Activities section

8.

Question 8

The beginning balance in Accounts Payable on Company A's Year 2 Balance Sheet is $180,000. The company purchased on account inventory of $200,000 during Year 2, and paid suppliers $40,000 in cash. What is the ending balance in Accounts Payable on the Year 2 Balance Sheet? Assuming no other transactions affected the account during the year.

Hint: you may find it helpful to use a t-account as you work through this question.

1 point

$380,000

$340,000

$160,000

$20,000

9.

Question 9

Company A purchased 1% of Company B's outstanding stock for $50,000 as a short-term investment. Which of the following related to the purchase will be found in Company A's Statement of Cash Flows?

1 point

Financing Activities: $50,000, cash inflow

Operating Activities: $50,000, cash outflow

Financing Activities: $50,000, cash outflow

Investing Activities: $50,000, cash outflow

10.

Question 10

The beginning balance in Inventory on Company A's Year 2 Balance Sheet is $20,000. The company purchased inventory for $200,000 during Year 2, sold inventory with book value of $105,000 for $145,000. What is the ending balance in Inventory on the Year 2 Balance Sheet? Assuming no other transactions affected the account during the year.

Hint: you may find it helpful to use a t-account as you work through this question.

1 point

$75,000

$95,000

$260,000

$115,000

11.

Question 11

The net increase in Prepaid Expenses (Prepaid) amounts to $30,000 and the net decrease in Accounts Payable (AP) is $20,000. What is the net effect of Prepaid and AP on the adjustments to Net Income if the indirect method is used in the Statement of Cash Flows?

1 point

Plus $10,000

Minus $50,000

Plus $50,000

Minus $10,000

12.

Question 12

The beginning balance in Loan Payable on Company A's Year 2 Balance Sheet is $180,000. The company took out new loans of $200,000 during Year 2, and repaid $40,000 of loans. What is the ending balance in Loan Payable on the Year 2 Balance Sheet? Assuming no other transactions affected the account during the year.

Hint: you may find it helpful to use a t-account as you work through this question.

1 point

$380,000

$340,000

$160,000

$20,000