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Exam 1: Business Decisions and Financial Accounting

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Question 51

True/False

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-Refer to the above table. Anonymous,Inc.is owed $310,500 from customers who have purchased goods or services from the company,but have not yet paid for them.

A) True
B) False

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Question 52

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In the statement of cash flows,the company's payment of a $1,900 electric bill would be classified as:

A) an operating cash outflow.
B) a financing cash outflow.
C) an investing cash inflow.
D) an operating cash inflow.

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

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Question 53

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According to the cost principle of accounting,assets are initially reported on the balance sheet based on their original cost to the company.

Financing activities include borrowing and obtaining money by issuing shares of ownership (called stock certificates).

Which one of the following does $\bold{not}$ enhance $\bold{\text{the usefulness}}$ of financial information?

For the month ending September 30,2014,A/C Inc.has received $10,000 from customers,$30,000 in capital contributed from shareholders,and borrowed $20,000 from the bank.The company also paid its employees $5,000,bought equipment totaling $40,000,and paid cash dividends of $1,000 to shareholders.Assume beginning cash was zero.Produce a statement of cash flows to illustrate what ending cash is at the end of the month.

Which of the following equations is correct?

The separate entity assumption means:

When is the financial information a $\bold{\text{faithful representation}}$ ?

An creditor might look at a company's financial statements to determine if the company's:

When faces with an ethical dilemma,employees are encouraged to follow a three-step process.What are the three steps,in order,to this process?

Cash at the end of the year is the sum of cash at the beginning of the year and the net change in cash during the year.

Investors and creditors look at the balance sheet to see whether the company:

The table shows financial data for Purrfect Pets,Inc.as of June 30,2018. $\begin{array} { | l | r | } \hline \text { Reverues } & \$ 279,400 \\\hline \text { Accourts Receivable } & 419,200 \\\hline \text { Retained Earnings } & 117,900 \\\hline \text { Irventories } & 58,400 \\\hline \text { Other Assets } & 69,400 \\\hline \text { Accourts Payable } & 349,200 \\\hline \text { Property, Plart, and Equiprnent } & 118,500 \\\hline \text { Cash } & 732,600 \\\hline \text { Contributed Capital } & 662,100 \\\hline \text { Notes Payable } & 268,900 \\\hline \text { Rent expense } & 56,900 \\\hline \text { Interest expense } & 4,500\\\hline\end{array}$ -Refer to the above table.Prepare a balance sheet using this data.

Which of the following is $\bold{not}$ true? $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ HOOPER'S HOPS $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Statement d Retained Eamings $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ For the Year Ended December 31, 2008 $\begin{array}{|l|r|}\hline \text { Retained Earnings, January 1, 2008 } & \$ 167,800 \\\hline \text { Net Income for 2008 } & 219,100 \\\hline \text { Dividends for } 2008 & \underline{(36,400) } \\\hline \text { Retained Earnings, December 31,2008 } & \underline{\$ 350,500} \\\hline \end{array}$

A company's quarterly income statements show that in the last three quarters both sales revenue and net income have been growing.Which of the following statements is not true?

Shareholders in a corporation are personally liable for the company's obligations.

CPA Canada:

The table shows financial data for Purrfect Pets,Inc.as of June 30,2018. $\begin{array} { | l | r | } \hline \text { Reverues } & \$ 279,400 \\\hline \text { Accourts Receivable } & 419,200 \\\hline \text { Retained Earnings } & 117,900 \\\hline \text { Irventories } & 58,400 \\\hline \text { Other Assets } & 69,400 \\\hline \text { Accourts Payable } & 349,200 \\\hline \text { Property, Plart, and Equiprnent } & 118,500 \\\hline \text { Cash } & 732,600 \\\hline \text { Contributed Capital } & 662,100 \\\hline \text { Notes Payable } & 268,900 \\\hline \text { Rent expense } & 56,900 \\\hline \text { Interest expense } & 4,500\\\hline\end{array}$ -Refer to the above table.Fill in the missing items in the balance sheet. $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ PURRFEGT PETS, INC. $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ BAI.ANEE SHEET $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ SEPTEMBER 10, 2018 $\begin{array}{|l|r|}\hline \text { Assets } &\\\hline\end{array}$

In which of the following business organization the owners could only lose the money they invested in the business?