The financial statement that represents activity over the entire life of the company is the

39. The equation best describing the income statement is:
A. Revenues - Expenses = Net Income.
B. Assets = Revenues - Expenses.
C. Assets = Liabilities + Stockholders' Equity.
D. Revenues + Expenses = Net Income.

40. On January 1, 2012, Gucci Brothers Inc. started the year with a $492,000 balance in Retained Earnings and a $605,000 balance in Common Stock. During 2012, the company earned net income of $92,000, paid a dividend of $15,200, and issued more common stock for $27,500. What is total stockholders' equity on December 31, 2012?
A. $1,231,700.
B. $1,097,000.
C. $1,201,300.
D. $1,588,300.

Stockholders Equity = Common Stock ($605,000 + $27,500) + Retained Earnings ($492,000 + $92,000 - $15,200).

41. The financial statement that represents activity over the entire life of the company is the:
A. Income statement.
B. Statement of financial accounting.
C. Balance sheet.
D. Statement of cash flows.

42. Which of the following is the correct order for preparing the financial statements?
A. Balance sheet, statement of stockholders' equity, and income statement.
B. Balance sheet, income statement, and statement of stockholders' equity.
C. Statement of stockholders' equity, income statement, and balance sheet.
D. Income statement, statement of stockholders' equity, and balance sheet.

43. The financial statement(s) that record activity over an interval of time is (are) the:
A. Income statement.
B. Balance sheet.
C. Balance sheet and income statement.
D. Income statement and statement of cash flows.

44. Which of the following items would not appear in an income statement?
A. Salaries expense.
B. Advertising expense.
C. Service revenue.
D. Cash.

 

45. The two categories of stockholders' equity usually found in the balance sheet of a corporation are:
A. Common stock and liabilities.
B. Assets and liabilities.
C. Common stock and retained earnings.
D. Revenues and expenses.

46. Which of the following statements regarding financial reports is not correct?
A. A balance sheet contains assets, liabilities, and stockholders' equity information.
B. An income statement shows revenues and expenses.
C. A statement of stockholders' equity reports revenues, net income, and dividends information.
D. A statement of cash flows shows cash inflows and outflows from operating, investing, and financing activities.

 

47. Which of the following is not a balance sheet item?
A. Assets.
B. Common stock.
C. Retained earnings.
D. Revenues.

 

48. In what order are the following financial statements prepared: (1) balance sheet, (2) income statement, and (3) statement of stockholders' equity?
A. 1, 2, 3.
B. 3, 2, 1.
C. 1, 3, 2.
D. 2, 3, 1.

 

49. Nina Corp. had the following net income (loss) the first three years of operation: $7,100, ($1,600), and $3,600. If the Retained Earnings balance at the end of year three is $1,100, what was the total amount of dividends paid over these three years?
A. $500.
B. $0.
C. $9,100.
D. $8,000.

Beginning Retained Earnings ($0) + Net Income ($7,100 - $1,600 + $3,600) - Dividends = Ending Retained Earnings ($1,100).

50. Aikman Company has paid dividends of $2,410, $0, $1,570 and $1,060 over the first four years of the company's existence. If Retained Earnings after year four has an ending balance of $9,700, what is the average annual amount of net income (loss) over the past four years for Aikman?
A. $3,685.
B. $14,740.
C. $840.
D. $1,260.

Beginning Retained Earnings ($0) + Net Income - Dividends ($2,410 + $0 + $1,570 + $1,060) = Ending Retained Earnings ($9,700). Divide net income amount by 4 to get average.