Financial Accounting Flashcard

Front

What is the primary goal of financial accounting?

Back

To supply financial data to external parties.

Front

Who among the following is not considered an external stakeholder in accounting? Creditors, Investors, Government officials, Chief financial officer (CFO).

Back

Chief financial officer (CFO).

Front

A business is evaluating the purchase of a building that the seller originally bought for $200,000. The building is currently listed for $350,000, but the buyer believes its value is $340,000, and it is ultimately purchased for $330,000. At what amount should the building be recorded in the buyer's financial records?

Back

$330,000.

Front

Smith Corporation reported a net income of $200 million and average total assets of $2,500 million. What is its return on assets (ROA)?

Back

8.0%.

Front

If the total assets are $450,000 and the total liabilities are $275,000, what is the equity?

Back

$175,000.

Front

If a business spends $2,000 of its cash to buy equipment, what is the impact on the accounting equation?

Back

One asset increases $2,000 and another asset decreases $2,000, causing no effect.

Front

Compute net income for the company using the following information: Cash $60,000, Accounts receivable $30,000, Office supplies $8,000, Office equipment $50,000, Land $100,000, Accounts payable $25,000, Consulting revenue $70,000, Salaries expense $15,000, Rent expense $20,000, Utilities expense $2,000, Miscellaneous expenses $1,500.

Back

$33,500.

Front

Unearned revenues are:

Back

Liabilities recorded when customers pay in advance for products or services.

Front

Sunshine Cleaning Services received $45,000 on July 1 for a 9-month cleaning contract. How should Sunshine record this transaction in their general journal?

Back

Credit to Unearned Revenue for $45,000.

Front

Calculate the debt ratio for Anderson Corporation with total assets of $500 million and total liabilities of $125 million. Note: Round your answer to 1 decimal place.

Back

25.0%.