Test Bank for Fundamental Financial Accounting Concepts 11th Edition by Thomas Edmonds, Philip Olds, Christopher Edmonds

Test Bank for Fundamental Financial Accounting Concepts
11th Edition
by Thomas Edmonds, Philip Olds, Christopher Edmonds

,StudentVname:
1) IndicateVwhetherVeachVofVtheVfollowingVstatementsVaboutVmarketsVisVtrueVorVfalse.
a)VFinancialVresourcesVcanVbeVprovidedVtoVaVbusinessVbyVinvestors.
b)VResourceVownersVareVtheVbusinessesVthatVtransformVresourcesVintoVproductsVthatV
satisfyVconsumerVdesires.
c)VLaborVresourcesVincludeVbothVtheVphysicalVandVintellectualVlaborVofVaVbusiness'sV
employees.
d)VBusinessesVpurchaseVtheirVresourcesVfromVresourceVowners.
e)VConsumersVareVtheVmainVprovidersVofVresourcesVinVanyVmarket.




2) IndicateVwhetherVeachVofVtheVfollowingVstatementsVaboutVaccountingVinformationVisVtrueVorV
false.

a)VFinancialVaccountingVisVprimarilyVintendedVtoVsatisfyVtheVinformationVneedsVofV
internalVstakeholders.
b)VManagerialVaccountingVinformationVincludesVfinancialVandVnonfinancialV
information.
c)VTheVaccountingVinformationVintendedVtoVsatisfyVtheVneedsVofVaVcompany'sV
employeesVisVmanagerialVaccountingVinformation.
d)VGAAPVrequiresVthatVcompaniesVadhereVtoVfinancialVaccountingVstandards.
e)VManagerialVaccountingVinformationVisVusuallyVlessVdetailedVthanVfinancialV
accountingVinformation.


3) IndicateVwhetherVeachVofVtheVfollowingVstatementsVaboutVliabilitiesVisVtrueVorVfalse.

a)VAVnetVlossVonVtheVincomeVstatementVdecreasesVliabilities.
b)VTheVacquisitionVofVaVbankVloanVincreasesVbothVassetsVandVliabilities.
c)VTheVaccountingVequationVrequiresVthatVliabilitiesVbeVequalVtoVstockholders’Vequity.
d)VTheVamountVofVaVcompany'sVliabilitiesVisVequalVtoVtheVdifferenceVbetweenVitsVassetsV
andVitsVstockholders’Vequity.
e)VLiabilitiesVareVreportedVonVtheVstatementVofVcashVflowsVofVaVbusiness.

,4) IndicateVwhetherVeachVofVtheVfollowingVstatementsVaboutVretainedVearningsVisVtrueVorVfalse.

a)VAVdividendVpaidVtoVstockholdersVdecreasesVretainedVearnings.
b)VIssuingVcommonVstockVforVcashVincreasesVretainedVearnings.
c)VTheVamountVofVnetVincomeVforVaVperiodVmustVequalVretainedVearnings.
d)VTheVpurchaseVofVaVtruckVdecreasesVretainedVearnings.
e)VNetVincomeVincreasesVretainedVearnings.


5) IndicateVwhetherVeachVofVtheVfollowingVstatementsVaboutVtheVtypesVofVtransactionsVisVtrueV
orVfalse.

a)VAnVassetVsourceVtransactionVincreasesVtotalVassetsVandVincreasesVclaimsVtoVassets.
b)VTheVissuanceVofVstockVtoVownersVforVcashVwouldVbeVanVexampleVofVanVassetV
exchangeVtransaction.
c)VPurchasingVequipmentVforVcashVisVanVexampleVofVanVassetVuseVtransaction.
d)VPayingVaVdividendVtoVstockholdersVisVanVexampleVofVanVassetVuseVtransaction.
e)VMakingVaVpaymentVonVaVbankVloanVisVanVexampleVofVanVassetVexchangeVtransaction.




6) IndicateVwhetherVeachVofVtheVfollowingVstatementsVaboutVfinancialVstatementsVisVtrueVorV
false.

a)VAVcashVdividendVpaidVtoVstockholdersVisVreportedVinVtheVinvestingVactivitiesVsectionV
ofVtheVstatementVofVcashVflows.
b)VAVcashVdividendVpaidVtoVstockholdersVisVreportedVonVtheVstatementVofVchangesVinV
stockholders'Vequity.
c)VAVcashVdividendVpaidVtoVstockholdersVisVreportedVonVtheVincomeVstatement.
d)VTheVbalanceVsheetVreportsVtheVendingVbalancesVofVpermanentVaccountsVasVofVtheVlastV
dayVofVtheVaccountingVperiod.
e)VChangesVinVretainedVearningsVduringVtheVaccountingVperiodVareVreportedVonVtheVi
ncomeVstatement.

, 7) IndicateVwhetherVeachVofVtheVfollowingVstatementsVaboutVstockholders’VequityVisVtrueVorV
false.

a)VExpensesVdecreaseVretainedVearnings.
b)VStockholders'VequityVandVliabilitiesVcanVbeVviewedVeitherVasVsourcesVofVassetsVorV
claimsVtoVassetsVofVtheVbusiness.
c)VRetainedVearningsVisVincreasedVbyVloansVreceivedVfromVaVbank.
d)VDividendsVpaidVtoVstockholdersVdecreaseVcommonVstock.
e)VGenerally,VassetsVareVreportedVatVtheVactualVpriceVpaidVforVthemVwhenVpurchasedV
regardlessVofVsubsequentVchangesVinVmarketVvalue.

8) JessupVCompanyVwasVfoundedVinVYearV1.VItVacquiredV$45,000VcashVbyVissuingVstockVtoVinv
estorsVandVanVadditionalV$15,000VcashVbyVborrowingVfromVcreditors.VDuringVYearV1VitVreceived
$25,000VcashVrevenuesVandVpaidV$32,000VinVcashVexpenses.VTheVcompanyVthenVwentVoutVofVbus
iness.
Required:
a) ExplainVtheVterm,V"businessVliquidation."
b) WhatVamountVofVcashVshouldVJessupVCompanyVhaveVhadVonVhandVimmediatelyVbeforeVgoingV
outVofVbusiness?
c) WhatVamountVofVcashVwillVJessup'sVcreditorsVreceive?
d) WhatVamountVofVcashVwillVJessup'sVstockholdersVreceive?


9) BatesVCompanyVenteredVintoVtheVfollowingVtransactionsVduringVitsVfirstVyearVinVbusiness.V
AssumeVthatVallVtransactionsVinvolveVtheVreceiptVorVpaymentVofVcash.

1) IssuedVcommonVstockVtoVinvestorsVforV$25,000Vcash.
2) BorrowedV$18,000VfromVtheVlocalVbank.
3) ProvidedVservicesVtoVcustomersVforV$28,000.
4) PaidVexpensesVamountingVtoV$21,400.
5) PurchasedVaVplotVofVlandVcostingV$22,000.
6) PaidVaVdividendVofV$15,000VtoVitsVstockholders.
7) RepaidV$12,000VofVtheVloanVlistedVinVitemV2.
Required:
(a) FillVinVtheVthreeVcolumnVheadingsVofVtheVaccountingVequationVinVtheVfirstVrowVofVtheVtableVs
hownVbelow.
(b) ShowVtheVeffectsVofVtheVaboveVtransactionsVonVtheVaccountingVequation.