Question

1. Which of the following asset accounts is increased when a receivable is collected? Group of...

1. Which of the following asset accounts is increased when a receivable is collected?

Group of answer choices

Accounts Receivable

Supplies

Accounts Payable

Cash

2. Computer Corporation is starting its computer programming business and has sold stock of $15,000.  Identify how the accounting equation will be affected.

Group of answer choices

increase in assets (Cash) and increase in liabilities (Accounts Payable)

increase in assets (Cash) and increase in stockholders' equity (Common Stock)

increase in assets (Accounts Receivable) and decrease in liabilities (Accounts Payable)

increase in assets (Cash) and increase in assets (Accounts Receivable)

3. Cash investments made by the owner in the business are reported on the statement of cash flows in the

Group of answer choices

financing activities section

investing activities section

operating activities section

supplemental statement

4. A financial statement user would determine if a company was profitable or not during a specific period of time by reviewing the

Group of answer choices

income statement

balance sheet

statement of cash flows

statement of stockholders’ equity

5. Given the following data:

   Dec. 31, Year 2     Dec. 31, Year 1

Total liabilities $128,250                 $120,000
Total stockholders' equity    95,000 80,000

Compute the ratio of liabilities to stockholders' equity for each year.  Round to two decimal places.

Group of answer choices

1.50 and 1.07, respectively

1.35 and 1.50, respectively

1.07 and 1.19, respectively

1.19 and 1.35, respectively

6. Match each of the following characteristics with the financial statement it describes. Each financial statement may be used more than once.

Group of answer choices

Reports as of a specific date

      [ Choose ]            Statement of stockholder's equity            Balance sheet            Statement of cash flows            Income statement      

The first statement prepared

      [ Choose ]            Statement of stockholder's equity            Balance sheet            Statement of cash flows            Income statement      

Has three sections: operating, investing and financing

      [ Choose ]            Statement of stockholder's equity            Balance sheet            Statement of cash flows            Income statement      

Reports only revenues and expenses

      [ Choose ]            Statement of stockholder's equity            Balance sheet            Statement of cash flows            Income statement      

The second statement prepared

      [ Choose ]            Statement of stockholder's equity            Balance sheet            Statement of cash flows            Income statement      

A formal presentation of the accounting equation

      [ Choose ]            Statement of stockholder's equity            Balance sheet            Statement of cash flows            Income statement      

The connecting link between the income statement and balance sheet

      [ Choose ]            Statement of stockholder's equity            Balance sheet            Statement of cash flows            Income statement      

Homework Answers

Answer #1

1. Cash

Below will be Journal Entry

Debit Credit
Cash xxx
Accounts Receivable xxx

2.

increase in assets (Cash) and increase in stockholders' equity (Common Stock)

Debit Credit
Cash xxx
Common Stock xxx

3.

financing activities section

4.

income statement

5. Liabilities to Stockholders Equity

Year 2 = 128,250/95,000 = 1.35

Year 1 = 120,000/80,000 = 1.5

6.

Reports as of a specific date
Balance Sheet
The first statement prepared Income Statement
Has three sections: operating, investing and financing Statement of Cash Flows
Reports only revenues and expenses Income Statement
The second statement prepared Statement of Owner’s Equity
A formal presentation of the accounting equation Balance Sheet
The connecting link between the income statement and balance sheet Statement of Owner’s Equity
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