11) The Team Shirts' balance sheet has assets of $6,500 and liabilities of $4,000. Its shareholders' equity is ________.
A) $10,500
B) $2,500
C) $6,500
D) $4,000
12) 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 ________.
A) $9,000
B) $7,000
C) $1,000
D) $500
13) On March 1, Team Shirts had a beginning balance in retained earnings of $1,200. During March, Team Shirts paid $200 in dividends and had net income of $2,000. The March 31 balance in retained earnings was ________.
A) $3,000
B) $3,200
C) $3,400
D) $1,200
14) The purpose of the financial statements is to provide financial information needed by ________.
A) investor and creditors
B) regulators
C) vendors and customers
D) all of these
15) How many of a company's four financial statements report information about the company at a specific point in time?
A) one
B) two
C) three
D) four
16) How many of a company's four financial statements report information about the company over a specific period of time?
A) one
B) two
C) three
D) four
17) Dividends are ________.
A) the same as expenses
B) a reduction in retained earnings
C) owners' contributions to the firm
D) another term for each partner's share of partnership income
18) Net income flows from ________.
A) the income statement to the statement of changes in shareholders' equity
B) the income statement to the balance sheet
C) the balance sheet to the statement of cash flows
D) the statement of cash flows to the income statement
19) Which financial statement shows Inventory?
A) balance sheet
B) income statement
C) statement of changes in shareholders' equity
D) statement of cash flows
20) Comparative balance sheets ________.
A) include balances of two consecutive years
B) include gross profit and operating income
C) report financial ratios for the current year which are compared to the prior year's
D) report revenues for both the current and previous years