ACCT 201A Midterm 1 comprehensive
Questions and Answers with Verified
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Question 1:
Dividends are reported on the a. income statement. b. retained earnings
statement. c. balance sheet. d. income statement and balance sheet.
Answer:
b. retained earnings statement.
Question 2:
2. Retained earnings at the end of the period is equal to a. retained
earnings at the beginning of the period plus net income minus liabilities.
b. retained earnings at the beginning of the period plus net income minus
dividends. c. net income. d. assets plus liabilities.
Answer:
b. retained earnings at the beginning of the period plus net income minus
dividends.
Question 3:
3. Which of the following financial statements is concerned with the
company at a point in time? a. Balance sheet. b. Income statement. c.
Retained Earnings statement. d. Statement of cash flows.
Answer:
a. Balance sheet.
, Question 4:
4. Jennner Corporation began the year with retained earnings of
$155,000. During the year, the company issued $210,000 of common
stock, recorded expenses of $600,000, and paid dividends of $40,000. If
Jenner's ending retained earnings was $165,000, what was the
company's revenue for the year? a. $610,000
Answer:
b. $650,000
Question 5:
5. Why should the income statement be prepared first? a. The statement
of cash flows should be prepared first because it determines the sources
of cash. That information is then used in preparing the income statement.
b. Net income from the income statement flows into the retained earnings
statement. The ending retained earnings balance then flows into the
balance sheet. c. The income statement does not have to be prepared
first. Financial statements can be prepared in any order. d. None of these
statements is correct.
Answer:
b. Net income from the income statement flows into the retained earnings
statement. The ending retained earnings balance then flows into the
balance sheet.
Questions and Answers with Verified
Solutions
Question 1:
Dividends are reported on the a. income statement. b. retained earnings
statement. c. balance sheet. d. income statement and balance sheet.
Answer:
b. retained earnings statement.
Question 2:
2. Retained earnings at the end of the period is equal to a. retained
earnings at the beginning of the period plus net income minus liabilities.
b. retained earnings at the beginning of the period plus net income minus
dividends. c. net income. d. assets plus liabilities.
Answer:
b. retained earnings at the beginning of the period plus net income minus
dividends.
Question 3:
3. Which of the following financial statements is concerned with the
company at a point in time? a. Balance sheet. b. Income statement. c.
Retained Earnings statement. d. Statement of cash flows.
Answer:
a. Balance sheet.
, Question 4:
4. Jennner Corporation began the year with retained earnings of
$155,000. During the year, the company issued $210,000 of common
stock, recorded expenses of $600,000, and paid dividends of $40,000. If
Jenner's ending retained earnings was $165,000, what was the
company's revenue for the year? a. $610,000
Answer:
b. $650,000
Question 5:
5. Why should the income statement be prepared first? a. The statement
of cash flows should be prepared first because it determines the sources
of cash. That information is then used in preparing the income statement.
b. Net income from the income statement flows into the retained earnings
statement. The ending retained earnings balance then flows into the
balance sheet. c. The income statement does not have to be prepared
first. Financial statements can be prepared in any order. d. None of these
statements is correct.
Answer:
b. Net income from the income statement flows into the retained earnings
statement. The ending retained earnings balance then flows into the
balance sheet.
