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

,StudentXname:
1) IndicateXwhetherXeachXofXtheXfollowingXstatementsXaboutXmarketsXisXtrueXorXfalse.
a)XFinancialXresourcesXcanXbeXprovidedXtoXaXbusinessXbyXinvestors.
b)XResourceXownersXareXtheXbusinessesXthatXtransformXresourcesXintoXprodu
ctsXthatXsatisfyXconsumerXdesires.
c)XLaborXresourcesXincludeXbothXtheXphysicalXandXintellectualXlaborXofXaXb
usiness'sXemployees.
d)XBusinessesXpurchaseXtheirXresourcesXfromXresourceXowners.
e)XConsumersXareXtheXmainXprovidersXofXresourcesXinXanyXmarket.




2) IndicateXwhetherXeachXofXtheXfollowingXstatementsXaboutXaccountingXinformationXis
XtrueXorXfalse.


a)XFinancialXaccountingXisXprimarilyXintendedXtoXsatisfyXtheXinformationXn
eedsXofXinternalXstakeholders.
b)XManagerialXaccountingXinformationXincludesXfinancialXandXnonfina
ncialXinformation.
c)XTheXaccountingXinformationXintendedXtoXsatisfyXtheXneedsXofXaXco
mpany'sXemployeesXisXmanagerialXaccountingXinformation.
d)XGAAPXrequiresXthatXcompaniesXadhereXtoXfinancialXaccountingXstandards.
e)XManagerialXaccountingXinformationXisXusuallyXlessXdetailedXthanXfi
nancialXaccountingXinformation.


3) IndicateXwhetherXeachXofXtheXfollowingXstatementsXaboutXliabilitiesXisXtrueXorXfalse.

a)XAXnetXlossXonXtheXincomeXstatementXdecreasesXliabilities.
b)XTheXacquisitionXofXaXbankXloanXincreasesXbothXassetsXandXliabilities.
c)XTheXaccountingXequationXrequiresXthatXliabilitiesXbeXequalXtoXstockholders’Xequity.
d)XTheXamountXofXaXcompany'sXliabilitiesXisXequalXtoXtheXdifferenceXbetween
XitsXassetsXandXitsXstockholders’Xequity.
e)XLiabilitiesXareXreportedXonXtheXstatementXofXcashXflowsXofXaXbusiness.

,4) IndicateXwhetherXeachXofXtheXfollowingXstatementsXaboutXretainedXearningsXisXtrueXorXf
alse.

a)XAXdividendXpaidXtoXstockholdersXdecreasesXretainedXearnings.
b)XIssuingXcommonXstockXforXcashXincreasesXretainedXearnings.
c)XTheXamountXofXnetXincomeXforXaXperiodXmustXequalXretainedXearnings.
d)XTheXpurchaseXofXaXtruckXdecreasesXretainedXearnings.
e)XNetXincomeXincreasesXretainedXearnings.


5) IndicateXwhetherXeachXofXtheXfollowingXstatementsXaboutXtheXtypesXofXtransaction
sXisXtrueXorXfalse.

a)XAnXassetXsourceXtransactionXincreasesXtotalXassetsXandXincreasesXclaimsXtoXassets.
b)XTheXissuanceXofXstockXtoXownersXforXcashXwouldXbeXanXexampleXo
fXanXassetXexchangeXtransaction.
c)XPurchasingXequipmentXforXcashXisXanXexampleXofXanXassetX useXtransaction.
d)XPayingXaXdividendXtoXstockholdersXisXanXexampleXofXanXassetXuseXtransaction.
e)XMakingXaXpaymentXonXaXbankXloanXisXanXexampleXofXanXassetXexchangeXtransac
tion.




6) IndicateXwhetherXeachXofXtheXfollowingXstatementsXaboutXfinancialXstatementsXis
XtrueXorXfalse.


a)XAXcashXdividendXpaidXtoXstockholdersXisXreportedXinXtheXinvestingXactivitie
sXsectionXofXtheXstatementXofXcashXflows.
b)XAXcashXdividendXpaidXtoXstockholdersXisXreportedXonXtheXstatementXofXc
hangesXinXstockholders'Xequity.
c)XAXcashXdividendXpaidXtoXstockholdersXisXreportedXonXtheXincomeXstatement.
d)XTheXbalanceXsheetXreportsXtheXendingXbalancesXofXpermanentXaccountsXasXo
fXtheXlastXdayXofXtheXaccountingXperiod.
e)XChangesXinXretainedXearningsXduringXtheXaccountingXperiodXareXreporte
dXonXtheXincomeXstatement.

, 7) IndicateXwhetherXeachXofXtheXfollowingXstatementsXaboutXstockholders’XequityXis
XtrueXorXfalse.


a)XExpensesXdecreaseXretainedXearnings.
b)XStockholders'XequityXandXliabilitiesXcanXbeXviewedXeitherXasXsourcesXofX
assetsXorXclaimsXtoXassetsXofXtheXbusiness.
c)XRetainedXearningsXisXincreasedXbyXloansXreceivedXfromXaXbank.
d)XDividendsXpaidXtoXstockholdersXdecreaseXcommonXstock.
e)XGenerally,XassetsXareXreportedXatXtheXactualXpriceXpaidXforXthemXwhenX
purchasedXregardlessXofXsubsequentXchangesXinXmarketXvalue.

8) JessupXCompanyXwasXfoundedXinXYearX1.XItXacquiredX$45,000XcashXbyXissuingXst
ockXtoXinvestorsXandXanXadditionalX$15,000XcashXbyXborrowingXfromXcreditors.XDuringXY
earX1XitXreceived
$25,000XcashXrevenuesXandXpaidX$32,000XinXcashXexpenses.XTheXcompanyXthenXwent
XoutXofXbusiness.
Required:
a) ExplainXtheXterm,X"businessXliquidation."
b) WhatXamountXofXcashXshouldXJessupXCompanyXhaveXhadXonXhandXimmediatelyXbef
oreXgoingXoutXofXbusiness?
c) WhatXamountXofXcashXwillXJessup'sXcreditorsXreceive?
d) WhatXamountXofXcashXwillXJessup'sXstockholdersXreceive?


9) BatesXCompanyXenteredXintoXtheXfollowingXtransactionsXduringXitsXfirstXyearXinX
business.XAssumeXthatXallXtransactionsXinvolveXtheXreceiptXorXpaymentXofXcash.

1) IssuedXcommonXstockXtoXinvestorsXforX$25,000Xcash.
2) BorrowedX$18,000XfromXtheXlocalXbank.
3) ProvidedXservicesXtoXcustomersXforX$28,000.
4) PaidXexpensesXamountingXtoX$21,400.
5) PurchasedXaXplotXofXlandXcostingX$22,000.
6) PaidXaXdividendXofX$15,000XtoXitsXstockholders.
7) RepaidX$12,000XofXtheXloanXlistedXinXitemX2.
Required:
(a) FillXinXtheXthreeXcolumnXheadingsXofXtheXaccountingXequationXinXtheXfirstXrowXo
fXtheXtableXshownXbelow.
(b) ShowXtheXeffectsXofXtheXaboveXtransactionsXonXtheXaccountingXequation.