Test Bank for Fundamental Financial Accounting Concepts
11th Edition
by Thomas Edmonds, Philip Olds, Christopher Edmonds
,Studentdname:
1) Indicatedwhetherdeachdofdthedfollowingdstatementsdaboutdmarketsdisdtruedordfalse.
a)dFinancialdresourcesdcandbedprovideddtodadbusinessdbydinvestors.
b)dResourcedownersdaredthedbusinessesdthatdtransformdresourcesdintodproductsdthat
dsatisfydconsumerddesires.
c)dLabordresourcesdincludedbothdthedphysicaldanddintellectualdlabordofdadbusiness's
demployees.
d)dBusinessesdpurchasedtheirdresourcesdfromdresourcedowners.
e)dConsumersdaredthedmaindprovidersdofdresourcesdindanydmarket.
2) Indicatedwhetherdeachdofdthedfollowingdstatementsdaboutdaccountingdinformationdisdtruedor
dfalse.
a)dFinancialdaccountingdisdprimarilydintendeddtodsatisfydthedinformationdneedsdof
dinternaldstakeholders.
b)dManagerialdaccountingdinformationdincludesdfinancialdanddnonfinancial
dinformation.
c)dThedaccountingdinformationdintendeddtodsatisfydthedneedsdofdadcompany's
demployeesdisdmanagerialdaccountingdinformation.
d)dGAAPdrequiresdthatdcompaniesdadheredtodfinancialdaccountingdstandards.
e)dManagerialdaccountingdinformationdisdusuallydlessddetaileddthandfinancial
daccountingdinformation.
3) Indicatedwhetherdeachdofdthedfollowingdstatementsdaboutdliabilitiesdisdtruedordfalse.
a)dAdnetdlossdondthedincomedstatementddecreasesdliabilities.
b)dThedacquisitiondofdadbankdloandincreasesdbothdassetsdanddliabilities.
c)dThedaccountingdequationdrequiresdthatdliabilitiesdbedequaldtodstockholders’dequity.
d)dThedamountdofdadcompany'sdliabilitiesdisdequaldtodtheddifferencedbetweenditsdassets
dandditsdstockholders’dequity.
e)dLiabilitiesdaredreporteddondthedstatementdofdcashdflowsdofdadbusiness.
,4) Indicatedwhetherdeachdofdthedfollowingdstatementsdaboutdretaineddearningsdisdtruedordfalse.
a)dAddividenddpaiddtodstockholdersddecreasesdretaineddearnings.
b)dIssuingdcommondstockdfordcashdincreasesdretaineddearnings.
c)dThedamountdofdnetdincomedfordadperioddmustdequaldretaineddearnings.
d)dThedpurchasedofdadtruckddecreasesdretaineddearnings.
e)dNetdincomedincreasesdretaineddearnings.
5) Indicatedwhetherdeachdofdthedfollowingdstatementsdaboutdthedtypesdofdtransactionsdisdtrue
dordfalse.
a)dAndassetdsourcedtransactiondincreasesdtotaldassetsdanddincreasesdclaimsdtodassets.
b)dThedissuancedofdstockdtodownersdfordcashdwoulddbedandexampledofdandasset
dexchangedtransaction.
c)dPurchasingdequipmentdfordcashdisdandexampledofdandassetdusedtransaction.
d)dPayingdaddividenddtodstockholdersdisdandexampledofdandassetdusedtransaction.
e)dMakingdadpaymentdondadbankdloandisdandexampledofdandassetdexchangedtransaction.
6) Indicatedwhetherdeachdofdthedfollowingdstatementsdaboutdfinancialdstatementsdisdtruedor
dfalse.
a)dAdcashddividenddpaiddtodstockholdersdisdreporteddindthedinvestingdactivitiesdsection
dofdthedstatementdofdcashdflows.
b)dAdcashddividenddpaiddtodstockholdersdisdreporteddondthedstatementdofdchangesdin
dstockholders'dequity.
c)dAdcashddividenddpaiddtodstockholdersdisdreporteddondthedincomedstatement.
d)dThedbalancedsheetdreportsdthedendingdbalancesdofdpermanentdaccountsdasdofdthedlast
ddaydofdthedaccountingdperiod.
e)dChangesdindretaineddearningsdduringdthedaccountingdperioddaredreporteddondthe
dincomedstatement.
, 7) Indicatedwhetherdeachdofdthedfollowingdstatementsdaboutdstockholders’dequitydisdtruedor
dfalse.
a)dExpensesddecreasedretaineddearnings.
b)dStockholders'dequitydanddliabilitiesdcandbedvieweddeitherdasdsourcesdofdassetsdor
dclaimsdtodassetsdofdthedbusiness.
c)dRetaineddearningsdisdincreaseddbydloansdreceiveddfromdadbank.
d)dDividendsdpaiddtodstockholdersddecreasedcommondstock.
e)dGenerally,dassetsdaredreporteddatdthedactualdpricedpaiddfordthemdwhendpurchased
dregardlessdofdsubsequentdchangesdindmarketdvalue.
8) JessupdCompanydwasdfoundeddindYeard1.dItdacquiredd$45,000dcashdbydissuingdstockdtodin
vestorsdanddandadditionald$15,000dcashdbydborrowingdfromdcreditors.dDuringdYeard1ditdreceived
$25,000dcashdrevenuesdanddpaidd$32,000dindcashdexpenses.dThedcompanydthendwentdoutdofdbu
siness.
Required:
a) Explaindthedterm,d"businessdliquidation."
b) WhatdamountdofdcashdshoulddJessupdCompanydhavedhaddondhanddimmediatelydbeforedgoing
doutdofdbusiness?
c) WhatdamountdofdcashdwilldJessup'sdcreditorsdreceive?
d) WhatdamountdofdcashdwilldJessup'sdstockholdersdreceive?
9) BatesdCompanydentereddintodthedfollowingdtransactionsdduringditsdfirstdyeardindbusiness.
dAssumedthatdalldtransactionsdinvolvedthedreceiptdordpaymentdofdcash.
1) Issueddcommondstockdtodinvestorsdford$25,000dcash.
2) Borrowedd$18,000dfromdthedlocaldbank.
3) Provideddservicesdtodcustomersdford$28,000.
4) Paiddexpensesdamountingdtod$21,400.
5) Purchaseddadplotdofdlanddcostingd$22,000.
6) Paiddaddividenddofd$15,000dtoditsdstockholders.
7) Repaidd$12,000dofdthedloandlisteddinditemd2.
Required:
(a) Filldindthedthreedcolumndheadingsdofdthedaccountingdequationdindthedfirstdrowdofdthedtable
dshowndbelow.
(b) Showdthedeffectsdofdthedabovedtransactionsdondthedaccountingdequation.
11th Edition
by Thomas Edmonds, Philip Olds, Christopher Edmonds
,Studentdname:
1) Indicatedwhetherdeachdofdthedfollowingdstatementsdaboutdmarketsdisdtruedordfalse.
a)dFinancialdresourcesdcandbedprovideddtodadbusinessdbydinvestors.
b)dResourcedownersdaredthedbusinessesdthatdtransformdresourcesdintodproductsdthat
dsatisfydconsumerddesires.
c)dLabordresourcesdincludedbothdthedphysicaldanddintellectualdlabordofdadbusiness's
demployees.
d)dBusinessesdpurchasedtheirdresourcesdfromdresourcedowners.
e)dConsumersdaredthedmaindprovidersdofdresourcesdindanydmarket.
2) Indicatedwhetherdeachdofdthedfollowingdstatementsdaboutdaccountingdinformationdisdtruedor
dfalse.
a)dFinancialdaccountingdisdprimarilydintendeddtodsatisfydthedinformationdneedsdof
dinternaldstakeholders.
b)dManagerialdaccountingdinformationdincludesdfinancialdanddnonfinancial
dinformation.
c)dThedaccountingdinformationdintendeddtodsatisfydthedneedsdofdadcompany's
demployeesdisdmanagerialdaccountingdinformation.
d)dGAAPdrequiresdthatdcompaniesdadheredtodfinancialdaccountingdstandards.
e)dManagerialdaccountingdinformationdisdusuallydlessddetaileddthandfinancial
daccountingdinformation.
3) Indicatedwhetherdeachdofdthedfollowingdstatementsdaboutdliabilitiesdisdtruedordfalse.
a)dAdnetdlossdondthedincomedstatementddecreasesdliabilities.
b)dThedacquisitiondofdadbankdloandincreasesdbothdassetsdanddliabilities.
c)dThedaccountingdequationdrequiresdthatdliabilitiesdbedequaldtodstockholders’dequity.
d)dThedamountdofdadcompany'sdliabilitiesdisdequaldtodtheddifferencedbetweenditsdassets
dandditsdstockholders’dequity.
e)dLiabilitiesdaredreporteddondthedstatementdofdcashdflowsdofdadbusiness.
,4) Indicatedwhetherdeachdofdthedfollowingdstatementsdaboutdretaineddearningsdisdtruedordfalse.
a)dAddividenddpaiddtodstockholdersddecreasesdretaineddearnings.
b)dIssuingdcommondstockdfordcashdincreasesdretaineddearnings.
c)dThedamountdofdnetdincomedfordadperioddmustdequaldretaineddearnings.
d)dThedpurchasedofdadtruckddecreasesdretaineddearnings.
e)dNetdincomedincreasesdretaineddearnings.
5) Indicatedwhetherdeachdofdthedfollowingdstatementsdaboutdthedtypesdofdtransactionsdisdtrue
dordfalse.
a)dAndassetdsourcedtransactiondincreasesdtotaldassetsdanddincreasesdclaimsdtodassets.
b)dThedissuancedofdstockdtodownersdfordcashdwoulddbedandexampledofdandasset
dexchangedtransaction.
c)dPurchasingdequipmentdfordcashdisdandexampledofdandassetdusedtransaction.
d)dPayingdaddividenddtodstockholdersdisdandexampledofdandassetdusedtransaction.
e)dMakingdadpaymentdondadbankdloandisdandexampledofdandassetdexchangedtransaction.
6) Indicatedwhetherdeachdofdthedfollowingdstatementsdaboutdfinancialdstatementsdisdtruedor
dfalse.
a)dAdcashddividenddpaiddtodstockholdersdisdreporteddindthedinvestingdactivitiesdsection
dofdthedstatementdofdcashdflows.
b)dAdcashddividenddpaiddtodstockholdersdisdreporteddondthedstatementdofdchangesdin
dstockholders'dequity.
c)dAdcashddividenddpaiddtodstockholdersdisdreporteddondthedincomedstatement.
d)dThedbalancedsheetdreportsdthedendingdbalancesdofdpermanentdaccountsdasdofdthedlast
ddaydofdthedaccountingdperiod.
e)dChangesdindretaineddearningsdduringdthedaccountingdperioddaredreporteddondthe
dincomedstatement.
, 7) Indicatedwhetherdeachdofdthedfollowingdstatementsdaboutdstockholders’dequitydisdtruedor
dfalse.
a)dExpensesddecreasedretaineddearnings.
b)dStockholders'dequitydanddliabilitiesdcandbedvieweddeitherdasdsourcesdofdassetsdor
dclaimsdtodassetsdofdthedbusiness.
c)dRetaineddearningsdisdincreaseddbydloansdreceiveddfromdadbank.
d)dDividendsdpaiddtodstockholdersddecreasedcommondstock.
e)dGenerally,dassetsdaredreporteddatdthedactualdpricedpaiddfordthemdwhendpurchased
dregardlessdofdsubsequentdchangesdindmarketdvalue.
8) JessupdCompanydwasdfoundeddindYeard1.dItdacquiredd$45,000dcashdbydissuingdstockdtodin
vestorsdanddandadditionald$15,000dcashdbydborrowingdfromdcreditors.dDuringdYeard1ditdreceived
$25,000dcashdrevenuesdanddpaidd$32,000dindcashdexpenses.dThedcompanydthendwentdoutdofdbu
siness.
Required:
a) Explaindthedterm,d"businessdliquidation."
b) WhatdamountdofdcashdshoulddJessupdCompanydhavedhaddondhanddimmediatelydbeforedgoing
doutdofdbusiness?
c) WhatdamountdofdcashdwilldJessup'sdcreditorsdreceive?
d) WhatdamountdofdcashdwilldJessup'sdstockholdersdreceive?
9) BatesdCompanydentereddintodthedfollowingdtransactionsdduringditsdfirstdyeardindbusiness.
dAssumedthatdalldtransactionsdinvolvedthedreceiptdordpaymentdofdcash.
1) Issueddcommondstockdtodinvestorsdford$25,000dcash.
2) Borrowedd$18,000dfromdthedlocaldbank.
3) Provideddservicesdtodcustomersdford$28,000.
4) Paiddexpensesdamountingdtod$21,400.
5) Purchaseddadplotdofdlanddcostingd$22,000.
6) Paiddaddividenddofd$15,000dtoditsdstockholders.
7) Repaidd$12,000dofdthedloandlisteddinditemd2.
Required:
(a) Filldindthedthreedcolumndheadingsdofdthedaccountingdequationdindthedfirstdrowdofdthedtable
dshowndbelow.
(b) Showdthedeffectsdofdthedabovedtransactionsdondthedaccountingdequation.
