ACCT 207 EXAM 1 QUESTIONS AND ACCURATE ANSWERS

ACCT 207 EXAM 1 QUESTIONS AND ACCURATE
ANSWERS

What are the three main types of business activities - Answers - 1.) Financing activities
People whom a company owes money to are its creditors
a.) loans from banks
b.) sell stock
2.) Investing activities
Purchases of resources need to operate
3.) Operating activities

Which financial statement would service revenue appear? - Answers - Income
Statement

Which financial statement would Equipment appear? - Answers - Balance sheet

Which financial statement would advertising expense appear? - Answers - Income
Statement

Which financial statement would accounts receivable appear? - Answers - Balance
sheet

Which financial statement would common stock appear? - Answers - Balance sheet

Which financial statement would Interest payable appear? - Answers - Balance sheet

What is the primary purpose of the statement of cash flow? And the 3 main categories?
- Answers - Provide financial information about the cash receipts and cash payments of
a business for a specific period of time
1.)Cash flow from operating activities
2.)Cash flow from investing activities
3.)Cash flow from financing activities

What are retained earnings? what items increase the balance in retained earnings what
items decrease it? - Answers - Net income retained in the corporation
Dividends: decrease retained earnings
Net income (from income statement) can increase or decrease RE

What is the basic accounting principle? - Answers - Assets = liabilities + stockholders
equity

Define Assets - Answers - resources owned by a business