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Exam 1: Business: Whats It All About

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Question 91

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Mia Hero started her own catering business called Hero's Catering.Analyze each of the following transactions for the first month of business.Prepare the balance sheet at March 31. a.Mia contributed $10,000 of her own money to start Mia's catering. b.The business borrowed another $5,000 from the local bank. c.The business rented a kitchen for $1,500 for the month. d.The business spent $1,200 on food,spices and other supplies used during the month. e.The business hired Betty Foit as an assistant chef and paid her $500 for the month. f.The business earned $7,000 in revenues during the month.

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Question 92

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Squid Roe,Inc.paid $1,000 cash for janitorial services.The effect of this transaction on the accounting equation is:

A) Total shareholders' equity
B) Total shareholders' equity
C) Total shareholders' equity
D) Total shareholders' equity

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Question 93

Multiple Choice

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Poe,Inc.made $7,000 of cash sales to customers.The effect of this transaction on the accounting equation is:

Mia Hero started her own catering business called Hero's Catering.Analyze each of the following transactions for the first month of business.Prepare the statement of cash flows for the month of March.

Identify and describe the three types of business activities.

Which financial statement shows Inventory?

Businesses receive contributed capital when customers pay for goods or services.

The main purpose of a not-for-profit business is to add value to a product or service in order to make a profit.

Seminole Company had a net cash inflow of $80,000 from operating activities.It spent $40,000 on investing activities.Seminole received $50,000 in cash from issuing stock.Given no other cash activity,calculate the net increase or decrease in cash.

A financial statement that presents assets,liabilities,and shareholders' equity.

How many of a company's four financial statements report information about the company over a specific period of time?

Up Against the Wall,Inc.,has liabilities of $350,000 and $300,000 worth of shareholders' equity.Calculate the value of its assets.

Match the appropriate definitions with correct term.

Mia Hero,Inc.had a retained earnings balance of $7,000 on December 31,2011.For the year 2012,sales revenues are $15,000 and expenses are $13,000.If no dividend is declared or paid in 2012,retained earnings at December 31,2012 equals ________.

Classify the following accounts according to the appropriate balance sheet category. a.Assets b.Liabilities c.Shareholders' equity _____ 1.Common stock _____ 2.Retained earnings _____ 3.Notes payable _____ 4.Cash _____ 5.Inventory _____ 6.Land

A service company ________.

For the month of June,Team Shirts,Inc.,received $6,000 in contributed capital,$3,000 in sales revenue,paid $2,000 in expenses,and $500 in dividends.Its net income was ________.

Retained earnings and cash on the balance sheet will always be equal.

Shelby's Music reported net income of $35,000 for the year.During the year,it received $125,000 in revenues.Calculate the amount of expenses for the year.

Which of the following statements reports the line item Gross profit?