Retained earnings, January 1 $20,000 Net income for the year $45,625 Less dividends 38,170 Increase in retained earnings 7,455 Retained earnings, December 31 $27,455 Challenging DIFFICULTY: Bloom's: Applying FNMN.WARD.16.01-05 - LO: 01-05 LEARNING OBJECTIVES: ACCT.ACBSP.APC.09 - Financial Statements ACCREDITING STANDARDS: ACCT.AICPA.FN.03 Measurement – BUSPROG: Analytic Explain the interrelationship between the balance sheet and the statement of cash flows. The cash reported on the balance sheet is also reported as the end-of-period cash ANSWER: on the statement of cash flows. Moderate DIFFICULTY: Bloom's: Remembering FNMN.WARD.16.01-05 - LO: 01-05 LEARNING OBJECTIVES: ACCT.ACBSP.APC.09 - Financial Statements ACCREDITING STANDARDS: ACCT.AICPA.FN.03 Measurement – BUSPROG: Analytic From the following list of items taken from accounting records, identify those that would appear on the Lamar’s income statement. (a) Rent expense (b) Land (c) Common stock (d) Fees earned (e) Dividends (f) Wages expense (g) Investment (a), (d), (f) ANSWER: Easy DIFFICULTY: Bloom's: Remembering FNMN.WARD.16.01-05 - LO: 01-05 LEARNING OBJECTIVES: ACCT.ACBSP.APC.09 - Financial Statements ACCREDITING STANDARDS: ACCT.AICPA.FN.03 Measurement – BUSPROG: Analytic Identify which of the following accounts would appear on a balance sheet. (a) Cash (b) Fees earned (c) Common stock (d) Wages payable (e) Rent expense (f) Prepaid advertising (g) Land (a), (c), (d), (f), (g) ANSWER: Easy DIFFICULTY:
Retained earnings, January 1 $20,000 Net income for the year $45,625 Less dividends 38,170 Increase in retained earnings 7,455 Retained earnings, December 31 $27,455 DIFFICULTY: Challenging Bloom's: Applying LEARNING OBJECTIVES: FNMN.WARD.16.01-05 - LO: 01-05 ACCREDITING STANDARDS: ACCT.ACBSP.APC.09 - Financial Statements ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic Explain the interrelationship between the balance sheet and the statement of cash flows. ANSWER: The cash reported on the balance sheet is also reported as the end-of-period cash on the statement of cash flows. DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.01-05 - LO: 01-05 ACCREDITING STANDARDS: ACCT.ACBSP.APC.09 - Financial Statements ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic From the following list of items taken from Lamar’s accounting records, identify those that would appear on the income statement. (a) Rent expense (b) Land (c) Common stock (d) Fees earned (e) Dividends (f) Wages expense (g) Investment ANSWER: (a), (d), (f) DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.01-05 - LO: 01-05 ACCREDITING STANDARDS: ACCT.ACBSP.APC.09 - Financial Statements ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic Identify which of the following accounts would appear on a balance sheet. (a) Cash (b) Fees earned (c) Common stock (d) Wages payable (e) Rent expense (f) Prepaid advertising (g) Land ANSWER: (a), (c), (d), (f), (g) DIFFICULTY: Easy
FinMan_Chapter_01_Introduction_to_Accounting_and_Business.docx