Filters
Question type
Study Flashcards

For the year 2016, net income of Carol Company is $20,000 and dividends declared are $6,000; therefore, retained earnings have increased $26,000 during the year.

A) True
B) False

Correct Answer

verifed

verified

Which of the following is a disadvantage of a corporation when compared to a partnership?


A) The stockholders have limited liability.
B) The corporation is treated as a separate legal entity from the stockholders.
C) The corporation and its stockholders are subject to double taxation.
D) The corporation must account for the transactions of the business as separate and apart from those of the owners.

E) A) and C)
F) A) and B)

Correct Answer

verifed

verified

A company's retained earnings increased $375,000 last year and its assets increased $973,000. The company declared a $79,000 cash dividend during the year. What was last year's net income?


A) $296,000.
B) $375,000.
C) $454,000.
D) $519,000.

E) A) and B)
F) A) and C)

Correct Answer

verifed

verified

Larson Company ends its recent year of operations with $3,500,000 in retained earnings. During the year Larson's net income exceeded its dividend declarations by $200,000. Larson's dividend declarations were $25,000 greater than the dividend payments. Requirement: How much was Larson Company's beginning retained earnings?

Correct Answer

verifed

verified

Beginning retained earnings = ...

View Answer

The accounting equation states that Assets = Liabilities + Stockholders' Equity.

A) True
B) False

Correct Answer

verifed

verified

How are creditor and investor claims reported on a balance sheet?


A) The claims of creditors are liabilities and those of investors are assets.
B) The claims of both creditors and investors are liabilities, but only the claims of investors are considered to be long-term.
C) The claims of creditors are reported as liabilities while the claims of investors are recorded as stockholders' equity.
D) The claims of creditors and investors are considered to be essentially equivalent.

E) B) and C)
F) All of the above

Correct Answer

verifed

verified

Which of the following has the legal authority to determine financial reporting in the United States?


A) Financial Accounting Standards Board.
B) American Accounting Association.
C) Securities and Exchange Commission.
D) Public Company Accounting Oversight BoarD.The Securities and Exchange Commission is the government agency that determines the financial statements that public companies must provide to stockholders.

E) A) and C)
F) A) and D)

Correct Answer

verifed

verified

Which of the following statements is correct?


A) The payment of a cash dividend reduces net income.
B) Cash received from issuing common stock to stockholders is reported as a financing activity cash flow within the statement of cash flows.
C) Providing services to a customer on account does not impact net income.
D) Interest payments are reported within the statement of cash flows as a financing activity.

E) A) and B)
F) B) and C)

Correct Answer

verifed

verified

Laker Company has provided the following information for its most recent year of operation: Cash collected from customers totaled $99,300. Cash borrowed from banks totaled $42,700. Cash paid to employees totaled $23,300. Cash paid for interest totaled $3,100. Cash received from selling an investment in Husky stock totaled $73,000. Cash payments to banks for repayment of money borrowed totaled $9,700. Cash paid for operating expenses totaled $11,200. Land costing $75,000 was sold for $75,000 cash. Cash paid for dividend payments to stockholders totaled $7,700. Calculate Laker's net cash flow from investing activities.

Correct Answer

verifed

verified

Net cash flow from investing a...

View Answer

Which of the following transactions increases both cash and net income?


A) Cash receipts from a bank loan.
B) Cash receipts from sale of common stock.
C) Cash receipts from customers for services provided.
D) Cash receipts from cost of goods solD.Net income is the result of revenues less cost of goods sold and other expenses.Cash receipts from customers increases revenue, which flows through to an increase in net income.Cash receipts also increase the cash account.

E) None of the above
F) C) and D)

Correct Answer

verifed

verified

Showing 121 - 130 of 130

Related Exams

Exam 2

Investing and Financing Decisions and the Accounting System

139 Questions

Exam 3

Operating Decisions and the Accounting System

128 Questions

Exam 4

Adjustments, Financial Statements, and the Quality of Earnings

138 Questions

Exam 5

Communicating and Interpreting Accounting Information

119 Questions

Exam 6

Reporting and Interpreting Sales Revenue, Receivables, and Cash

130 Questions

Exam 7

Reporting and Interpreting Cost of Goods Sold and Inventory

137 Questions

Exam 8

Reporting and Interpreting Property, Plant, and Equipment; Intangibles; and Natural Resources

131 Questions

Exam 9

Reporting and Interpreting Liabilities

129 Questions

Exam 10

Reporting and Interpreting Bond Securities

128 Questions

Exam 11

Reporting and Interpreting Stockholders Equity

133 Questions

Exam 12

Statement of Cash Flows

121 Questions

Exam 13

Analyzing Financial Statements

125 Questions

Exam 14

PPA: Reporting and Interpreting Investments in Other Corporations

115 Questions

Show Answer