ACCT 2101 Midterm (CH 1-6) Exam with accurate detailed
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solutions
Which of the following is not an advantage of the corporate form of business organization?
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A. The ease with which capital can be raised
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B. The protection afforded stockholders against personal liability
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C. The relative ease of selling ownership shares
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D. Both the business and the owners are taxed - ✔✔D. Both the business and the owners are taxed
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Which one of the following is not a key linkage among the four primary financial statements?
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A. The expenses in the income statement link to the total liability balance
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B. The statement of retained earnings links to ending retained earnings on the balance sheet
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C. The income statement links to the ending retained earnings in the statement of retained
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earnings
D. The statement of cash flows links to ending cash balance reported on the balance sheet - ✔✔A.
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The expenses in the income statement link to the total liability balance
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Which of the following financial statements is a period statement?
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Select one: ||
A. Income statement
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B. Statement of retained earnings
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C. Statement of cash flows
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D. All of the above
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E. None of the above - ✔✔D. All of the above
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, Mel's Mechanical Repair Shop started the year with total assets of $60,000, total liabilities of
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$40,000, and retained earnings of $18,000. During the year, the business recorded $100,000 in
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auto repair revenues, $70,000 in expenses, and the company paid dividends of $15,000.
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The net income reported by Mel's Mechanical Repair Shop for the year was:
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Select one: || ||
A. $180,000
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B. $40,000
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C. $50,000
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D. $30,000||
E. None of the above - ✔✔D. $30,000
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Adam Vega's Landscaping Company has compiled the following list of account balances of
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various assets, liabilities, revenues and expenses on December 31, 2016, the end of its first year of
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operations.
||
Common stock ||
$25,200
Accounts payable || ||
5,000
Salary expense ||
9,000
Repairs ||
expense
1,600
Dividends ||
10,000
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solutions
Which of the following is not an advantage of the corporate form of business organization?
|| || || || || || || || || || || || || ||
A. The ease with which capital can be raised
|| || || || || || || ||
B. The protection afforded stockholders against personal liability
|| || || || || || ||
C. The relative ease of selling ownership shares
|| || || || || || ||
D. Both the business and the owners are taxed - ✔✔D. Both the business and the owners are taxed
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Which one of the following is not a key linkage among the four primary financial statements?
|| || || || || || || || || || || || || || ||
A. The expenses in the income statement link to the total liability balance
|| || || || || || || || || || || ||
B. The statement of retained earnings links to ending retained earnings on the balance sheet
|| || || || || || || || || || || || || ||
C. The income statement links to the ending retained earnings in the statement of retained
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earnings
D. The statement of cash flows links to ending cash balance reported on the balance sheet - ✔✔A.
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The expenses in the income statement link to the total liability balance
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Which of the following financial statements is a period statement?
|| || || || || || || || ||
Select one: ||
A. Income statement
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B. Statement of retained earnings
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C. Statement of cash flows
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D. All of the above
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E. None of the above - ✔✔D. All of the above
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, Mel's Mechanical Repair Shop started the year with total assets of $60,000, total liabilities of
|| || || || || || || || || || || || || || ||
$40,000, and retained earnings of $18,000. During the year, the business recorded $100,000 in
|| || || || || || || || || || || || || ||
auto repair revenues, $70,000 in expenses, and the company paid dividends of $15,000.
|| || || || || || || || || || || || ||
The net income reported by Mel's Mechanical Repair Shop for the year was:
|| || || || || || || || || || || ||
Select one: || ||
A. $180,000
||
B. $40,000
||
C. $50,000
||
D. $30,000||
E. None of the above - ✔✔D. $30,000
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Adam Vega's Landscaping Company has compiled the following list of account balances of
|| || || || || || || || || || || || ||
various assets, liabilities, revenues and expenses on December 31, 2016, the end of its first year of
|| || || || || || || || || || || || || || || ||
operations.
||
Common stock ||
$25,200
Accounts payable || ||
5,000
Salary expense ||
9,000
Repairs ||
expense
1,600
Dividends ||
10,000
