• The company was started with $22,000 of common stock issued to investors for cash.
• On July 1, the company purchased land that cost $15,500 cash.
• There was $700 of supplies purchased on account.

The amount of total liabilities appearing on the December 31, 2010 balance sheet would be: (Points : 2)

(Points : 2)

(Points : 2)

(Points : 2)

• • Issued stock for $40,000
  • Borrowed $24,000 from bank
  • Provided services to customers for $53,000 cash
  • Paid back $8,000 of the loan from the bank
  • Paid rent expense, $9,000
  • Paid operating expenses, $29,0

Question

• Module 1 : Module 1 – Test 1: M/C

  1.Which of the following accounts would not appear on a balance sheet? (Points : 2)  Equipment  Interest Payable  Interest Revenue  Retained Earnings

  2.Which of the following statements about the Public Company Accounting Oversight Board (PCAOB) is not true? (Points : 2)  The PCAOB was created by the Sarbanes-Oxley Act to regulate the accounting firms that audit financial statements of public companies.  Independent auditors are required to register with the PCAOB.  The PCAOB has the power to impose sanctions against a registered accounting firm.  The PCAOB requires public accounting firms to conduct peer reviews of other such firms and make their report public.

  3.Which financial statement matches asset increases from operating a business with asset decreases from operating the business? (Points : 2)  Statement of changes in equity  Balance sheet  Income statement  Statement of cash flows

  4.The Blumer Company entered into the following transactions during 2010: The company was started with $22,000 of common stock issued to investors for cash. On July 1, the company purchased land that cost $15,500 cash. There was $700 of supplies purchased on account. The amount of total liabilities appearing on the December 31, 2010 balance sheet would be: (Points : 2)  $3,600  $4,000  $475  $700

  5.Rowena Company spent cash to purchase equipment. As a result of this event: (Points : 2)  total liabilities increased.  total assets increased.  net income increased.  total assets were unchanged.

  6.ABC Company acquired $23,000 by issuing common stock to investors. Which of the following choices accurately reflects how this event would affect the company’s financial statement? Row Assets = Liab. + Equity Rev. – Exp. = Net Inc. Cash Flow One 23,000 = NA + 23,000 NA – NA = NA 23,000 FA Two 23,000 = NA + 23,000 23,000 – NA = 23,000 NA Three 23,000 = NA + 23,000 23,000 – NA = 23,000 23,000 FA Four 23,000 = 23,000 + NA 23,000 – NA = 23,000 23,000 OA (Points : 2)  Row One  Row Two  Row Three  Row Four

  7.Parrot Company paid a $300 cash dividend. Which of the following choices accurately reflects how this event would affect the company’s financial statements? Balance Sheet Income Statement Row Assets = Liab. + Equity Rev. – Exp. = Net Inc. Statement of Cash Flows One NA = 300 + (300) NA – 300 = (300) NA Two (300) = NA + (300) NA – 300 = (300) (300) FA Three (300) = NA + (300) NA – NA = NA (300) FA Four (300) = NA + (300) NA – NA = NA (300) OA (Points : 2)  Row One  Row Two  Row Three  Row Four

  8.Sefcik Company purchased supplies on account. Which of the following choices accurately reflects how this event would affect the company’s financial statements? Row Assets = Liab. + Equity Rev. – Exp. = Net Inc. Cash Flow One + = NA + – NA – + = – NA Two + – = NA + NA NA – NA = NA – OA Three + = + + NA NA – NA = NA NA Four + – = NA + NA NA – NA = NA NA (Points : 2)  Row One  Row Two  Row Three  Row Four

  9.Ohio Company provided services to a customer for $1,700 cash. As a result of this event: (Points : 2)  total assets decreased.  total liabilities increased.  retained earnings increased.  cash flows from financing activities increased.

  10.The claims of a business’s creditors are called: (Points : 2)  assets.  liabilities.  equity.  revenue.

  11.The Sarbanes-Oxley Act: (Points : 2)  was prompted by corporate bankruptcies and audit failures.  limits an auditor’s ability to provide non-audit services to a client.  clarifies the responsibility of a company’s management for its financial statements.  all of the above.

  12.Hardin Company began operations in 2010. During the year, the following cash transactions occurred: Issued stock for $40,000 Borrowed $24,000 from bank Provided services to customers for $53,000 cash Paid back $8,000 of the loan from the bank Paid rent expense, $9,000 Paid operating expenses, $29,000 Assuming that Hardin engaged in no transactions during the year other than those listed above, what was the amount of net income or loss for the year? (Points : 2)  $19,000 net income  $15,000 net income  $12,000 net income  $11,000 net loss

  13.In event of liquidation of a business: (Points : 2)  creditors have priority claim on the business’s assets.  investors have priority claim on the business’s assets.  resource users have priority claim on the business’s assets.

  00

Assuming that Hardin engaged in no transactions during the year other than those listed above, what was the amount of net income or loss for the year? (Points : 2)