Which is a true statement regarding the accounting equation? A. The equation consists of three parts: assets, liabilities, and net income. B. The equation is an optional tool for accountants to use. C. The equation can be stated as assets minus liabilities equals equity. D. The equation needs to balance during a specific period.
Added by Jill W.
Step 1
C. The accounting equation can be stated as assets minus liabilities equals equity. Show more…
Show all steps
Your feedback will help us improve your experience
Adi S and 71 other Principles of Accounting educators are ready to help you.
Ask a new question
Labs
Want to see this concept in action?
Explore this concept interactively to see how it behaves as you change inputs.
Recommended Videos
QUESTION 1 The Cash Flow Cycle includes which of the following activities: A. Setup B. Production C. Sales D. All of the above QUESTION 2 The Pumice Stone Company has the following measurements ready for its Statement of Cash Flows: Beginning Cash Balance $125,300 Acquisitions $400,000 Net cash flow from Operating Activities $297,600 Net cash flow from Investing Activities ($328,400) (negative/use) Net cash flow from Financing Activities $250,000 A. $344,500 B. $232,600 C. $55,700 D. ($205,100) QUESTION 3 Free Cash Flow is defined as: A. A measure of ongoing cash flow from normal business activities (including CapEx) B. A list of dividend payments made to shareholders. C. Any cash flow given as bonus compensation to executives. D. Cash flows raised from debt and equity offerings. QUESTION 4 Capital Expenditures is the amount spent for contract labor used in the business, and reported under Cash for Investing. True False QUESTION 5 Which of the following transactions does NOT lower Cash: A. Paying salaries B. Paying for equipment C. Paying off a loan balance D. Receiving money from investors QUESTION 6 Most small businesses, and all large ones, favor accrual basis books over cash basis books for all of the following reasons EXCEPT: A. They're concerned about the profit margin on products they sell. B. They want to know when they're making money and when they're not. C. Accrual basis accounting always shows a higher profit than cash basis of accounting. D. They're required by lenders, investors or government authorities to report their activities using accrual basis accounting QUESTION 7 The BesTest Sprinkler Company engaged in the following Financing Activities during the year 2020: Issuance of new Debt $10,000,000 Repayment of Debt $7,000,000 Payment of Dividends $750,000 Sale of Stock $2,500,000 What are the Net Borrowings? A. $3,000,000 B. $5,500,000 C. $10,000,000 D. $4,750,000 QUESTION 8 A cash flow statement is basically a reconciliation of the company's purchase log. True False QUESTION 9 The Cash Flow Statement measures "how much money, net of everything else, have I made this year, and how much will I have going forward next year", according to Jack Welch. True False QUESTION 10 Earnings per Share is a more important financial measure than cash flow for private equity firms. True False
Akash M.
Which of the following describes how a merchandise income statement is different from a service income statement? The revenue from a merchandise business is reported as sales. The program and production expenses are subtracted from gross profit to arrive at operating income. Depreciation and amortization expenses are added to the cost of goods sold. A merchandise business shows a gross profit line. 2) Which of the following statements is false? The accounting equation is reflected in the balance sheet. The balance sheet is classified to categorize the various items within the statement. Classifying items helps the user see where a company gets its resources. Classifying items on a balance sheet helps show the company's financial position. 3) Which of the following statements is true? The sale of goods and services results in revenue. The costs of operating a company are called expenses. A company must generate net income in order to be sustainable. The income statement reports the financial performance of a company over a specific period of time. 4) Which statement summarizes and explains the changes in retained earnings during the accounting period? Balance Sheet Income Statement Statement of Retained Earnings Trial Balance
At the end of the accounting period, Anderson Company had $4,500 in accounts receivable and $500 in its allowance for doubtful accounts account. Based on this information, the net realizable value of accounts receivable is a. $4,000 b. $4,500 c. $5,000 d. The answer cannot be determined with the information provided. 2. The recovery and collection of an accounts receivable that had previously been written off will a. increase total assets b. decrease total assets c. not affect total assets d. not affect cash flow. 3. On December 31, Year 3, Alpha Company had an ending balance of $200,000 in its accounts receivable account and an unadjusted (current) balance in its allowance for doubtful accounts account of $300 (credit balance). Alpha estimates uncollectible accounts expense to be 1% of receivables. Based on this information, the amount of uncollectible accounts expense shown on the Year 3 income statement is a. $2,300 b. $2,200 c. $1,700 d. $2,000.
Jennifer S.
Recommended Textbooks
Horngren’s Cost Accounting
Cost Accounting A Managerial Emphasis
Principles of Accounting Volume 1: Financial Accounting
Transcript
Watch the video solution with this free unlock.
EMAIL
PASSWORD