Quiz 1 Mini Calculation Drill

Chapters 1 & 2

Work each problem before clicking to reveal the answer.

1 A company reports revenues of $48,000 and expenses of $31,500. What is net income? Tap to reveal

$16,500

$48,000 - $31,500 = $16,500

2 Beginning retained earnings is $12,000. Net income is $8,500. Dividends are $2,000. What is ending retained earnings? Tap to reveal

$18,500

$12,000 + $8,500 - $2,000 = $18,500

3 Current assets are $75,000 and current liabilities are $30,000. What is the current ratio? Tap to reveal

2.50

$75,000 ÷ $30,000 = 2.50

4 A company borrows $20,000 from a bank by signing a note. By how much do total assets and total liabilities change? Tap to reveal

Assets increase by $20,000.
Liabilities increase by $20,000.

Cash increases and notes payable increases.

5 A company has current assets of $60,000 and current liabilities of $30,000. It uses $10,000 cash to buy equipment. What is the new current ratio? Tap to reveal

Before the purchase:
$60,000 ÷ $30,000 = 2.00

After the purchase:
Current assets = $50,000
Current liabilities = $30,000

New current ratio = 1.67

6 A company performs $4,200 of services for cash. What amount is debited to cash and what amount is credited to revenue? Tap to reveal

Debit cash $4,200
Credit revenue $4,200