ACCOUNTING 201 EXAM 1 CHAPTERS 1-4 UPDATED
ACTUAL QUESTIONS AND CORRECT ANSWERS
Question:
1. Accountants refer to an economic event as a
Answer:
transaction
Question:
2. Liabilities
Answer:
are existing debts and obligations
Question:
3. Stockholders' equity can be described as
Answer:
ownership claim on total assets
Question:
4. The common characteristic possessed by all assets is
Answer:
future economic benefit
Question:
5. Stockholders' equity is increased by
Answer:
revenues
Question:
6. Net income results when
Answer:
Revenues > Expenses
Question:
7. A balance sheet shows
Answer:
assets, liabilities, and stockholders' equity
,Question:
8. An income statement
Answer:
presents the revenues and expenses for a specific period of time
Question:
9. The primary purpose of the statement of cash flows is to
report
Answer:
information about cash receipts and cash payments of a company
Question:
10. The starting point of the accounting process is
Answer:
identifying economic events
Question:
11. What is the basic accounting equation?
Answer:
Assets = Liabilities + Stockholders' Equity
Question:
12. The following is the basic accounting equation.
Determine the missing amounts. Assets - $78,000,
Liabilities - $50,000
Answer:
Stockholders' Equity $28,000
Question:
13. The following is the basic accounting equation.
Determine the missing amounts. Liabilities - $45,000,
Stockholders' Equity - $70,000
Answer:
Assets $115,000
Question:
14. The following is the basic accounting equation.
Determine the missing amounts. Assets - $94,000,
Stockholders' Equity - $60,000
Answer:
Liabilities $34,000
, Question:
15. (a) The liabilities of Holland Company are $120,000 and its
stockholders’ equity is $232,000. What is the amount of
Holland Company’s total assets?
Answer:
Holland Company's total assets $352,000
Question:
16. (b) The total assets of Holland Company are $190,000
and its stockholders’ equity is $86,000. What is the
amount of its total liabilities?
Answer:
Holland Company's total liabilities $104,000
Question:
17. (c) The total assets of Holland Company are $600,000
and its liabilities are equal to one-half of its total assets.
What is the amount of Holland Company’s stockholders’
equity?
Answer:
Holland Company's stockholders' equity $300,000
Question:
18. Classify each item as an asset, liability, or stockholders'
equity. Accounts payable
Answer:
Liability
Question:
19. Classify each item as an asset, liability, or stockholders'
equity. Cash
Answer:
Asset
Question:
20. Classify each item as an asset, liability, or stockholders'
equity. Equipment
Answer:
Asset
ACTUAL QUESTIONS AND CORRECT ANSWERS
Question:
1. Accountants refer to an economic event as a
Answer:
transaction
Question:
2. Liabilities
Answer:
are existing debts and obligations
Question:
3. Stockholders' equity can be described as
Answer:
ownership claim on total assets
Question:
4. The common characteristic possessed by all assets is
Answer:
future economic benefit
Question:
5. Stockholders' equity is increased by
Answer:
revenues
Question:
6. Net income results when
Answer:
Revenues > Expenses
Question:
7. A balance sheet shows
Answer:
assets, liabilities, and stockholders' equity
,Question:
8. An income statement
Answer:
presents the revenues and expenses for a specific period of time
Question:
9. The primary purpose of the statement of cash flows is to
report
Answer:
information about cash receipts and cash payments of a company
Question:
10. The starting point of the accounting process is
Answer:
identifying economic events
Question:
11. What is the basic accounting equation?
Answer:
Assets = Liabilities + Stockholders' Equity
Question:
12. The following is the basic accounting equation.
Determine the missing amounts. Assets - $78,000,
Liabilities - $50,000
Answer:
Stockholders' Equity $28,000
Question:
13. The following is the basic accounting equation.
Determine the missing amounts. Liabilities - $45,000,
Stockholders' Equity - $70,000
Answer:
Assets $115,000
Question:
14. The following is the basic accounting equation.
Determine the missing amounts. Assets - $94,000,
Stockholders' Equity - $60,000
Answer:
Liabilities $34,000
, Question:
15. (a) The liabilities of Holland Company are $120,000 and its
stockholders’ equity is $232,000. What is the amount of
Holland Company’s total assets?
Answer:
Holland Company's total assets $352,000
Question:
16. (b) The total assets of Holland Company are $190,000
and its stockholders’ equity is $86,000. What is the
amount of its total liabilities?
Answer:
Holland Company's total liabilities $104,000
Question:
17. (c) The total assets of Holland Company are $600,000
and its liabilities are equal to one-half of its total assets.
What is the amount of Holland Company’s stockholders’
equity?
Answer:
Holland Company's stockholders' equity $300,000
Question:
18. Classify each item as an asset, liability, or stockholders'
equity. Accounts payable
Answer:
Liability
Question:
19. Classify each item as an asset, liability, or stockholders'
equity. Cash
Answer:
Asset
Question:
20. Classify each item as an asset, liability, or stockholders'
equity. Equipment
Answer:
Asset
