11) The economic resources of a company resulting from past transactions are called ________.
A) assets
B) revenues
C) retained earnings
D) contributed capital
12) Liabilities are ________.
A) amounts that the business owes
B) amounts that the business owns
C) Shareholder claims on the assets of the business
D) matched with revenues to calculate income
13) Financial statements may be prepared ________.
A) weekly
B) monthly
C) quarterly
D) All of these are correct.
14) During its first year of business, Mega, Inc. earned revenues of $400,000, of which it collected only $310,000 in cash. Which of the following statements is
CORRECT?
A) The income statement will show Cash collected from customers of $310,000.
B) The balance sheet will show Accounts receivable of $310,000.
C) The income statement will show Revenues of $310,000.
D) The income statement will show Revenues of $400,000.
15) The four basic financial statements are the ________.
A) income statement, balance sheet, statement of changes in shareholders' equity, and cash budget
B) income statement, balance sheet, cash budget, and statement of cash flows
C) income statement, balance sheet, statement of changes in shareholders' equity, and statement of cash flows
D) balance sheet, shareholders' equity, statement of cash flows, and cash budget
16) In June, Team Shirts collected $2,250 from customers, paid $600 for T-shirts, and paid $500 for rent. Net cash from operations was ________.
A) $1,950
B) $1,650
C) $1,150
D) $2,250
17) Accounts receivable are classified as ________.
A) current assets
B) current liabilities
C) noncurrent assets
D) noncurrent liabilities
18) Accounts payable are classified as ________.
A) current assets
B) current liabilities
C) noncurrent assets
D) noncurrent liabilities
19) Equity ________.
A) represents shareholders' claims to the assets of a business
B) represents capital contributions to the business by lenders
C) represents capital owed by customers
D) is equal to assets plus liabilities
20) A classified balance sheet shows subtotals for ________.
A) revenues and expenses
B) current assets, long-term assets, current liabilities, long-term liabilities and shareholders' equity
C) operating activities, investing activities and financing activities
D) retained earnings, net income, and dividends