ACC 231: Chapter 1 Review Question
and answers rated A+ 2025/2026
Why is the income statement the first financial report prepared? - correct answer ✔The income
statement is prepared first because its result, Net Income, is needed as part of the other financial
statements.
If the company paid dividends of $15,000 during the year, what is the ending balance in retained
earnings? - correct answer ✔$255,000
Ending assets for CompuHelp equal $650,000 and the beginning retained earnings account was
$325,000. If net income during the period was $225,000 and dividends were $150,000, what were
ending liabilities? - correct answer ✔$250,000
Which of the following is a true statement regarding ethics related to accounting? - correct answer
✔Accountants must be educated on ethics as they are very often faced with ethical decisions in
pressure situations. This education could help in making the right decision.
Which of the following statements is correct? - correct answer ✔Financial accounting provides
information for decision makers outside the entity.
If the company paid dividends of $20,000 during the year, what is the ending balance in retained
earnings? - correct answer ✔$205,000
What was the total change in Retained Earnings during the year? - correct answer ✔$85,000 increase
Sue Mason owns a bagel shop as a sole proprietorship. Sue includes her personal home, car, and boat on
the books of her business which of the following is violated? - correct answer ✔Entity assumption
and answers rated A+ 2025/2026
Why is the income statement the first financial report prepared? - correct answer ✔The income
statement is prepared first because its result, Net Income, is needed as part of the other financial
statements.
If the company paid dividends of $15,000 during the year, what is the ending balance in retained
earnings? - correct answer ✔$255,000
Ending assets for CompuHelp equal $650,000 and the beginning retained earnings account was
$325,000. If net income during the period was $225,000 and dividends were $150,000, what were
ending liabilities? - correct answer ✔$250,000
Which of the following is a true statement regarding ethics related to accounting? - correct answer
✔Accountants must be educated on ethics as they are very often faced with ethical decisions in
pressure situations. This education could help in making the right decision.
Which of the following statements is correct? - correct answer ✔Financial accounting provides
information for decision makers outside the entity.
If the company paid dividends of $20,000 during the year, what is the ending balance in retained
earnings? - correct answer ✔$205,000
What was the total change in Retained Earnings during the year? - correct answer ✔$85,000 increase
Sue Mason owns a bagel shop as a sole proprietorship. Sue includes her personal home, car, and boat on
the books of her business which of the following is violated? - correct answer ✔Entity assumption
