17) Which of the following actions determines when a corporation comes into existence? A) The corporate bylaws are written. B) The charter is obtained from the state. C) The first share of stock is issued. D) The incorporators pay fees, sign the charter, and file required documents with the state. 19) The balance sheet is a snapshot of the entity. Which of the following is included on the balance sheet? A) Dividends B) Revenues C) Assets D) Expenses 20) Genity Corporation records business transactions in dollars and disregards changes in the valde a dollar over time. Which of the following accounting assumptions does this represent? A) economic entity assumption B) accounting period assumption C) going concern assumption D) monetary unit assumption 21) Ten years ago a corporation purchased a building for $160,000. At that time, the corporation felt that the business was worth $185,000. The current market value of the business is $460,000. The building has been assessed at $435,000 for property tax purposes. At which amount should the corporation record the building in its accounting records? A) $460,000 B) $160,000 C) $435,000 D) $185,000 22) The owners' claims to the assets of the business are called A) debt B) equity C) return on assets D) expenses 24) Jackson Plumbing Services earned $500 by completing a job for Smith Company. The $500 earned by Jackson Plumbing Services is its A) gain C) revenue D) debt B) equity 25) Which of the following financial statements reports cash receipts and cash payments during a period of time? A) Balance sheet B) Statement of retained earnings C) Cash receipts budget D) Statement of cash flows 28) Merchant Corporation provides plumbing services. Transactions of Merchant during the first year of operations are given below. a) Received $12,000 cash and issued common stock to Sharon. b) Paid $1,600 cash for equipment to be used for plumbing repairs. c) Borrowed $14,000 from a local bank and deposited the money in the checking account. d) Paid $600 rent for the year. e) Purchased $200 of office supplies by cash. f) Completed a plumbing repair project for a local lawyer and received $3,000 cash. Calculate the amount of total liabilities at the end of the first year. A) $3,000 B) $24,400 C) $14,000 D) $12,000 29) Which of the following financial statements lists the entity's assets, liabilities, and stockholders' equity as of a specific date? A) Income statement B) Statement of cash flows C) Statement of retained earnings D) Balance sheet 30) Which of the following is true of retained earnings? A) Retained earnings increase with purchase of assets. B) Retained earnings increase with payment on account. C) Retained earnings decrease with collection of revenue. D) Retained earnings decrease with payment of dividends. 31) _ represent the right to receive cash in the future from customers for goods sold or for services performed. A) Equity B) Expenses C) Accounts Payable D) Accounts Receivable 32) Which of the following statements best defines financial statements? A) Financial statements are the verbal statements made to business news organizations by chief financial officers. B) Financial statements are the information systems that record monetary and nonmonetary business transactions. C) Financial statements are documents that report on a business in monetary terms, providing information to help people make informed business decisions. D) Financial statements are plans and forecasts for future time periods based on information from past financial periods
