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Exam 1: Introducing Financial Accounting

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Question 31

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A limited partnership:

A) Includes a general partner with unlimited liability.
B) Is subject to double taxation.
C) Has owners called stockholders.
D) Is the same as a corporation.
E) May only have two partners.

F) A) and B)
G) C) and D)

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Question 32

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Describe the three types of activities reported on the statement of cash flows.

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The three types of activities reported i...

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Question 33

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Arrow's net income of $117 million and average assets of $1,400 million results in a return on assets of 8.36%. Return on Assets = Net Income/Average Assets Return on Assets = $117 million/$1,400 million = 8.36%

____________________ is the process undertaken in recent years by the FASB and IASB aimed at reducing inconsistencies between U.S. GAAP and IFRS.

If the liabilities of a company increased $92,000 during a period of time and equity in the business decreased $30,000 during the same period, did the assets of the company increase or decrease? By what amount?

An example of a financing activity is:

The term ___________ refers to a liability that promises a future outflow of resources.

Regulators often have legal authority over certain activities of organizations.

Describe the income statement and the relation between revenues, expenses, and net income or loss.

Identifying the proper ethical path is usually easy.

Rushing had income of $150 million and average invested assets of $1,800 million. Its return on assets is:

A company's balance sheet shows: cash $24,000, accounts receivable $30,000, equipment $50,000, and equity $72,000. What is the amount of liabilities?

Speedy has net income of $18,955, and assets at the beginning of the year of $200,000. Assets at the end of the year total $246,000. Compute its return on assets.

Explain why ethics are an integral part of accounting.

The accountant of Action Adventure Games, Inc. prepared a balance sheet after every 10 day period. The only resources invested by the owner were at the start of the company on June 1. During June, the first month of operation, the following balance sheets were prepared: Required: Describe the nature of each of the four transactions that took place between the balance sheet dates shown. Assume only one transaction affected each account.

Billington Corp. borrows $80,000 cash from Second National Bank. How does this transaction affect the accounting equation for Billington?

A limited liability company offers the limited liability of a partnership or proprietorship and the tax treatment of a corporation.

Operating activities:

Decreases in equity that represent costs of providing products or services to customers, used to earn revenues are called:

The accounting equation can be restated as: Assets - Equity = Liabilities.