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Brown Corporation reported the following amounts at the end of the first year of operations, December 31, 20A: share capital $20,000; sales revenue $95,000; total assets $85,000, no dividends, and total liabilities $35,000. What would shareholders' equity and total expenses be? Shareholders' equity, $80,000 and expenses $85,000. Shareholders' equity, $50,000 and expenses $65,000. Shareholders' equity, $60,000 and expenses $75,000. Shareholders' equity, $80,000 and expenses $40,000. Calculation: $85,000 - $35,000 = $50,000; $20,000 + $95,000 - $50,000 = $65,000 If Bender Corporation recently purchased goods from you on account, which of Bender's financial statements would you look at to determine whether Bender has sufficient resources to be able to pay for the goods when payment is due in 30 days? cash flow statement. statement of retained earnings. balance sheet. income statement. Why can't a business' balance sheet be used to accurately predict what the business might be sold for? it gives the results of operations for the current period. some of the assets and liabilities on the balance sheet may actually be those of another entity. assets are generally listed on the balance sheet at their historical cost, not their current value. it identifies all the revenues and expenses of the business.

The ending retained earnings balance of the Brown Hat restaurant chain increased by $4.3 billion from the beginning of the year. The company had declared a dividend of $1.5 billion. What was the net income earned during the year? There is no way to determine net income as not enough information was given. $5.8 billion. $3.0 billion. $2.8 billion. Calculation: $4.3 billion + $1.5 billion = $5.8 billion In what order are assets are listed on a balance sheet? date of acquisition (earliest first). importance to the operation of the business. ease of conversion to cash. dollar amount (largest first). What events cause changes in a corporation's retained earnings? declaration of dividends and purchase of new machinery. net income, issuance of shares, and borrowing from a bank. declaration of dividends and issuance of shares to new shareholders. net income or net loss and declaration of dividends. Which of the following is the amount of rent expense reported on the income statement? An increase in net income.

The amount of cash paid for rent in the current period less any unpaid rent at the end of the period. The amount of rent used up in the current period to earn revenue. The amount of cash paid for rent in the current period. On January 1, 20A, Taylor Corporation had retained earnings of $6,500,000. During 20A, Taylor had net income of $1,050,000 and dividends of $450,000. What is the amount of Taylor's retained earnings at the end of 20A? $7,100,000. $6,050,000. $6,950,000. $7,550,000. Calculation: $6,500,000 + $1,050,000 - $450,000 = $7,100,000 The cash flow statement and the balance sheet are interrelated because the ending amount of cash on the cash flow statement must agree with the amount on the statement of earnings. the ending amount of cash on the cash flow statement must agree with the amount in the statement of retained earnings. both disclose the corporation's net earnings. the ending amount of cash on the cash flow statement must agree with the amount in the balance sheet. How do most businesses earn revenues? By selling shares to shareholders. When they collect accounts receivable. By borrowing money from a bank.

Through sales of goods or services to customers. An accountant has debited an asset account for $500 and credited a revenue account for $1,000. What can be done to complete the recording of the transaction? Debit another asset account for $500. Credit a different asset account for $500. Nothing further must be done. Debit a shareholders' equity account for $500. Jet Corporation was organized on March 1, 20B. Jet Corporation issued shares to each of the six owners who paid in a total of $3,000 cash. On the basis of transaction analysis, the following entry should be recorded in the accounts (dr = debit and cr = credit) Cash (dr), $3,000; Revenue (cr), $3,000. Cash (cr), $3,000; Shareholders' equity (dr), $3,000. Cash (cr), $3,000; Share Capital (dr), $3,000. Cash (dr), $3,000; Share Capital (cr), $3,000. Borrowing $100,000 of cash from First National Bank would do which of the following? Increase cash by a credit. Increase notes payable by a debit. Decrease cash by a debit. Increase notes payable by a credit.

If total liabilities increased by $25,000 and shareholders' equity increased by $5,000 during a period of time, then total assets must change by what amount and direction during that same period? $25,000 increase $20,000 decrease $30,000 increase $20,000 increase Calculation: +$30,000 = +25,000 + $5,000

The following amounts are reported in the ledger of Bowers Company:

What is the balance in the share capital account? $7,000 credit. $12,000 credit. $12,000 debit. $8,000 debit. Calculation: $25,000 - 15,000 - 3,000 = $7,000 The collection of an account receivable from a customer would do which of the following? Increase liabilities. Decrease shareholders' equity. Not affect liabilities. Decrease liabilities. Payment of a liability would do which of the following?

Decrease assets. Not affect assets. Increase shareholders' equity. Decrease shareholders' equity. Winsome Inc. reports total assets and total liabilities of $225,000 and $100,000, respectively, at the conclusion of its first year of business. The company earned $75,000 during the first year and distributed $30,000 in dividends. What was the corporation's share capital? $95,000 $50,000 $80,000 $125,000 Calculation: $125,000 - ($75,000 - $30,000) = $80,000 Everest Acres Development Corporation recently sold a parcel of land for $50,000 more than its cost. This transaction: Increased assets and left liabilities and shareholder's equity unchanged. Reduced assets and shareholder's equity. Increased assets and liabilities. Increased shareholders' equity and assets. Which of the following liability accounts is usually not satisfied by payment of cash? Accounts payable. Unearned revenues. Taxes payable.

All of the mentioned are satisfied by paying cash....