Question : Learning Objective 1-4 1) Team Shirts, Inc. pays $600 for insurance. : 1253093

Learning Objective 1-4

1) Team Shirts, Inc. pays $600 for insurance. This transaction ________.

A) causes total assets to increase and total liabilities to increase

B) causes total liabilities to increase and retained earnings to decrease

C) is an investing activity

D) is an operating activity

2) A balance sheet ________.

A) describes the financial situation of a company at a specific point in time

B) is a summary of all of the revenues minus all of the expenses for an accounting period

C) shows the changes that took place in the amount of shareholders’ equity during a period

D) is a list of all the cash collected and cash paid during a period

3) An income statement ________.

A) describes the financial situation of a company at a specific point in time

B) is a summary of all of the revenues minus all of the expenses for an accounting period

C) shows the changes that took place in the amount of shareholders’ equity during a period

D) is a list of all the cash collected and cash paid during a period

4) The statement of changes in shareholders’ equity ________.

A) describes the financial situation of a company at a specific point in time

B) is a summary of all of the revenues minus all of the expenses for an accounting period

C) shows the changes that took place in the amount of shareholders’ equity during a period

D) is a list of all the cash collected and cash paid during a period

5) The statement of cash flows ________.

A) describes the financial situation of a company at a specific point in time

B) is a summary of all of the revenues minus all of the expenses for an accounting period

C) shows the changes that took place in the amount of shareholders’ equity during a period

D) is a list of all the cash collected and cash paid during a period

6) Team Shirts’ Statement of Cash Flows for October showed the following;

Cash from operating activities $ 3,000

Cash for investing activities $(2,000)

Cash from financing activities$          ?

Net change in cash $ 5,000

Cash flows from financing activities were ________.

A) $5,000

B) $(1,000)

C) $4,000

D) $6,000

7) Wok N Roll, Inc. shows $300,000 of assets and $60,000 of shareholders’ equity on its balance sheet. Liabilities must equal ________.

A) $360,000

B) $300,000

C) $240,000

D) $60,000

8) A single-step income statement ________.

A) is the preferred method of reporting revenues, expenses, and cash because of the ease of preparation

B) groups all revenues together and shows all expenses deducted from total revenue

C) includes the subtotal Gross profit in the presentation

D) is preferred by business owners because the information presented is timely, and thus useful

9) The four financial statements used to report a company’s financial condition include ________.

A) balance sheet, income statement, statement of changes in shareholders’ equity, and statement of cash flows

B) changes in balance sheet, statement of flows, statement of changes in balances, and statement of cash flows

C) balance sheet, statement of earnings, statement of changes in shareholders’ equity, and statement of budgets

D) income sheet, balance of earnings, statement of changes in shareholders’ equity, and statement of cash flows

10) Team Shirts, Inc. repays a $2,000 loan. This transaction ________.

A) causes total assets to increase

B) causes total liabilities to decrease

C) is an investing activity

D) causes total shareholders’ equity to increase