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Accounting Notes

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8. Which of the following statements are true regarding the balance sheet? 1. One cannot determine the true fair market value of a company by reviewing its balance sheet. 2. Certain internally generated assets, such as a trademark, are not reported on a company's balance sheet. 3. A balance sheet shows only the ending balances, in a summarized format, of all balance sheet accounts in the accounting system as of a particular date.
a. None are true.
b. Statements 1 and 2 only are true.
c. Statements 2 and 3 only are true.
d. All statements are true.

10. Which of the following is not a financing activity on the statement of cash flows?
a. When the company lends money.
b. When the company borrows money.
c. When the company pays dividends.
d. When the company issues stock to shareholders.

11. Conservatism – care should be taken to not overstate assets and understate liabilities and expenses
12. Materiality – small amounts that are not likely to influence a user’s decision can be accounted for in the most cost beneficial manner
13. Relevance – information that can influence a decision. It is timely and has predictive and/or feedback value

1. Which of the following is not a specific account in a company's chart of accounts?
a. Gains
b. Revenue
c. Net Income
d. Unearned Revenue

5. On January 1, 2011, Anson Company started the year with a $250,000 credit balance in Retained Earnings and a $300,000 balance in Contributed Capital. During 2011, the company earned net income of $50,000, declared a dividend of $15,000, and issued more stock for $12,500. What is total stockholders' equity on December 31, 2011?
a. $692,500.
b. $597,500.
c. $585,000.
d. None of the above.

6. During 2011, CliffCo Inc. incurred operating expenses of $200,000, of which $150,000 was...

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