Spring 2021 BMGT 220 Quiz 1 on Chapter 1 Question 1a Which of the following statements about financial accounting reports is correct A Financial accounting reports are used primarily by employees to make business decisions B Financial accounting reports are used primarily by management to understand whether a C Financial accounting reports are primarily prepared to provide information for external D Financial accounting reports primarily contain detailed internal records of the company related to production product line should be discontinued decision makers Question 1b The economic entity assumption means A a company s financial statements reflect only the business activities of that company B each separate owner s finances must be revealed in the financial statements C each separate entity that has a claim on a company s assets must be shown in the financial D if the business is a sole proprietorship the owners personal activities are included in the statements company s financial statements question Question 2a A company began the year with assets of 106 000 liabilities of 23 000 and stockholders equity of 83 000 During the year assets increased 55 600 and stockholders equity increased 21 200 What was the change in liabilities for the year Space to move this question Question 2b A company began the year with assets of 200 000 liabilities of 40 000 and stockholders equity of 160 000 During the year assets increased 110 000 and stockholders equity increased 40 000 What was the change in liabilities for the year A Increase of 76 800 B Increase of 34 400 C Decrease of 76 800 D Decrease of 34 400 A Increase of 150 000 B Increase of 70 000 C Decrease of 150 000 D Decrease of 70 000 ace to move this question Question 3a Which of the following will result in an increase in revenue A Borrowing 10 000 from a bank B Stockholders investing 10 000 in a company C Selling concert tickets for 10 000 four months before the performance D Selling 10 000 of groceries to customers Space to move this question Question 3b Which of the following would never affect a company s net income A A change in the company s income taxes B Changing the selling price of a company s product C Paying a dividend to stockholders D Advertising a new product Space to move this question Question 4a The following accounts are taken from the December 31 Year 4 financial statements of a company 2 075 800 2 500 2 200 2 000 1 900 400 75 500 5 000 2 500 3 000 2 000 300 11 000 4 800 3 000 300 10 000 Selling Administrative Expenses Accounts Payable Accounts Receivable Cash Common Stock Dividends Income Tax Expense Interest Expense Other Expenses Notes Payable Other Assets Other Liabilities Other Operating Expenses Other Revenue Property and Equipment Retained Earnings December 31 Year 3 Salaries and Wages Expense What is the amount of net income for Year 4 Supplies Service Revenue A 3 825 B 1 825 C 10 300 D 5 625 Space to move this question Question 4b A company s financial records at the end of the year included the following amounts 70 900 28 900 4 900 10 900 5 450 17 900 49 000 47 150 8 900 5 900 10 900 Retained Earnings beginning of year Cash Accounts Receivable Supplies Accounts Payable Notes Payable Common Stock Service Revenue Wages Expense Advertising Expense Rent Expense A 30 350 B 39 350 C 21 450 D 90 250 34 100 29 900 35 100 32 000 A B C D Space to move this What is the amount of net income on the Income Statement for the year Space to move this question Question 5a Terps Company started the year with the following Assets 102 000 Liabilities 32 000 Common Stock 62 000 Retained Earnings 8 000 During the year the company earned revenue of 5 200 all of which was received in cash and incurred expenses of 3 100 all of which were unpaid as of the end of the year In addition the company paid dividends of 1 200 to owners Assume no other activities occurred during the year The amount of liabilities at the end of the year is question Question 5b Terps Company started the year with the following Assets 50 000 Liabilities 15 000 Common Stock 30 000 Retained Earnings 5 000 During the year the company earned revenue of 2 500 all of which was received in cash and incurred expenses of 1 500 all of which were unpaid as of the end of the year In addition the company paid dividends of 500 to owners Assume no other activities occurred during the year The amount of liabilities at the end of the year is 15 000 16 500 14 000 16 000 A B C D Space to move this question Question 6a Terpland Company has 10 400 items of building supplies on hand that cost 312 000 a bill related to these supplies totaling 140 000 from a vendor has not yet been paid The company expects to earn 804 000 for its services when it uses the building supplies The company s balance sheet would include an asset Supplies in the amount of 312 000 10 400 172 000 804 000 A B C D Space to move this question Question 6b Terpland Company has 5 000 items of building supplies on hand that cost 150 000 a bill related to these supplies totaling 50 000 from a vendor has not yet been paid The company expects to earn 400 000 for its services when it uses the building supplies The company s balance sheet would include an asset Supplies in the amount of Space to move this question Question 7a Terps Company started the current year with assets of 706 000 liabilities of 353 000 and common stock of 206 000 During the current year assets increased by 406 000 liabilities decreased by 53 000 and common stock increased by 281 000 There was no payment of dividends to owners during the year What was the amount of net income for the year A 5 000 B 100 000 C 150 000 D 400 000 459 000 178 000 228 000 281 000 A B C D Space to move this question Question 7b Terps Company started the current year with assets of 840 000 liabilities of 420 000 and common stock of 240 000 During the current year assets increased by 480 000 liabilities decreased by 60 000 and common stock increased by 330 000 There was no payment of dividends to owners during the year What was the amount of net income for the year Space to move this question Question 8a A company s financial records at the end of the year included the following amounts Retained Earnings beginning of year A 270 000 B 330 000 C 210 000 D 540 000 Cash Accounts Receivable Supplies Accounts Payable Notes Payable Common Stock Service Revenue Wages Expense Advertising Expense Rent Expense A 153 250 B 114 000 C 103 500 D 121 …
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