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L2l5 Winter 2010 Quiz #1 Page 1 of2

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Foster School of Business that is committed to the academic standards of honesty, respect,
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SHORT PROBLEMS: Please show vour work

1 . Below are ending balances of the accounts of a cornpany as of December 31, 2001 .

CASH $ 420
REVENUE 6500
RENT EXPENSE "-350"
DEPRECIATION EXPENSE 100
TTNBA.NNED REVENUE 70
WAGE EXPENSE 2}D_
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a. What is the company's gross profit as of December 3I,2001? (1 point)
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b. What is the company's net income or loss as of December 31, 2007?

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2. In the accrual basis of accounting, what are the two main criteria that a company
to recognizing revenue in a given accounting period? (2 points)

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 LZL1 Winter 2010 Quiz #1 Page? ofZ

3. Husky Company purchased 57250 worth of inventory from a supplier, paylng

$3000 in cash and putting the remainder on credit. Please describe the transaction
(account, amount, direction) that Husky Company will record for the purchase of
the inventory. (3 points)

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4. At the beginning of the period retained earnings was $90,000. At the end of the
period retained earnings was $165,000.

a. If the company does not pay dividends, what did the company report as net

report as net income or loss on the income statement? (2 points)

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TRUE / FALSE: circle'oT" for true and "F" for false (8 points)
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management discussion and analysis report gives readers information
regarding the management's insight about significant future events.

2.trff expe4se is a liability located on the balance sheet.

3.7 The Three activity types on the statement of cash flows are Operating,
Financing, and Subsidrzing.
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4. ff-l n-/p,loan from a financial institution will increase assets and increase
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6. T / F tffie accrual basis of accounting recognizes the impact of transactions on the
{ytancial statements only when a company receives or pays cash.
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f . l'*"iT- IY Divi/dnds payable will appear as a liability on the balance sheet.
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8. T lU/V The balance sheet equation can also be stated as assets plus liabilities equals
owners'equlty.
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