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Study Resources (Accounting)

142) For each of the following events, indicate the amount by which liabilities increased or decreased. a)  Owner invested cash of $25,000 and equipment valued at $10,500 into the business. b)  Purchased $600 of supplies on account. c)  Borrowed $10,000 from the bank, issuing a note payable. d)  Performed a service for $1,500 and.
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For the items listed below, choose the appropriate code letter to indicate whether the item is an asset, liability, owner's equity, revenue, expense or withdrawal item: AssetA LiabilityL Owner's EquityOE RevenueR ExpenseE WithdrawalW A) L B) W C) OE D) R E) A F) E 117) Accounts receivable 118) Service revenue 119) Salary Expense 120) Accounts payable 121) Office supplies 122) Cash 123) Note payable 124) Tim Brown,.
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135) Selected transactions for Sarah's Kitchen are shown below. State the effect on the accounting equation of each transaction. a)  Sarah Cook invests $20,000 cash into a business known as Sarah's Kitchen. b)  Sarah purchases kitchen supplies on account for $500. c)  Sarah purchases a new oven for $6,500 cash. d)  Sarah receives and.
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66) The normal balance of notes payable is a ________ because it is a(n) ________ account. A) debit, expense B) credit, revenue C) debit, asset D) credit, liability 67) The normal balance of wages payable is a ________ because it is a(n) ________ account. A) credit, liability B) credit, revenue C) credit, owner's equity D) credit, asset 68) The normal.
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Table 1-2   Following is a random list showing the account balances of various assets, liabilities, revenues and expenses for Tim's Landscaping at December 31, 2010, the end of its first year of operations. Accounts receivable$30,000 Accounts payable 7,000 Salary expense9,000 Repairs expense  1,600 Truck  17,000 Equipment12,600 Notes payable16,400 Cash13,600 Supplies expense3,200 Service revenue25,600 Gasoline expense1,600 Salary payable4,400 The owner, Tim Brown, invested $45,200 at.
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11) The cost of a property, plant, and equipment asset less its accumulated amortization is referred to as historical cost. 12) The adjusting entry to record accrued salaries includes a debit to salary expense. 13) Failure to adjust for an accrued expense will overstate expenses and understate net income. 14) Failure to adjust.
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43) If owner's equity is $135,000 and total liabilities are $90,000, then total assets would be: A) $45,000 B) $225,000 C) $90,000 D) $135,000 44) Owner's equity and total assets were $32,000 and $79,000 respectively at the beginning of the period. Assets increased 50% and liabilities decreased 60% during the period. What is owner's equity.
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53) Purchasing office equipment on account would: A) decrease owner's equity B) increase owner's equity C) have no effect on owner's equity D) decrease liabilities 54) Purchasing a parcel of land for $100,000 by paying $10,000 in cash and signing a promissory note for the remainder would: A) decrease owner's equity by $90,000 B) increase owner's equity.
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147) On January 1, 2010, Brad Thomas invested $30,000 in Thomas Repairs. During 2010, Brad withdrew$17,000 for personal use. Thomas Repairs reports the following balances on December 31, 2010: Accounts receivable$  9,000 Accounts payable4,200 Service revenue25,550 Land4,000 Rent expense4,500 Note payable3,800 Supplies900 Brad Thomas, Capital, Jan. 1, 201030,000 Salary expense9,650 Cash18,500 Brad Thomas, Withdrawals17,000 Prepare an income statement for the year ended.
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50) Failure to record an accrued revenue: A) overstates liabilities B) overstates revenue C) overstates assets D) understates assets 51) On September 1, 2010, Two Sisters Company pays $36,000 cash for six months' rent. The balance in prepaid rent on December 31, 2010, after adjustment, would be: A) $6,000 B) $24,000 C) $12,000 D) $0 52) On November 1, 2010,.
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Match the following. A) generally accepted accounting principles B) accounting C) proprietorship D) expense 125) The system that measures business activities and processes information into reports 126) An entity with a single owner 127) Guidelines that govern how businesses report their financial statements to the public 128) A decrease in owner's equity that occurs in the course of.
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1) Accrual accounting records the effect of every business transaction as it occurs. 2) Under accrual accounting, revenues are recorded when cash is received and expenses are recorded when incurred. 3) The recognition criteria for revenues tell accountants when to record revenue by making a journal entry and the amount of revenue.
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1) The basic summary device of accounting is the account. 2) Notes receivable is a liability account. 3) A transaction always involves exactly two accounts. 4) The right-hand side of an account is called the increase side. 5) Assets, revenues, and withdrawals are all increased by debits. 6) Total debits must always equal total credits. 7).
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144) For each of the following events, indicate the amount by which owner's equity increased or decreased. a)  Owner invested cash of $25,000 and equipment valued at $10,500 into the business. b)  Purchased $600 of supplies on account. c)  Borrowed $10,000 from the bank, issuing a note payable. d)  Performed a service for $1,500.
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63) A cash investment into the business by the owner would: A) increase liabilities and increase owner's equity B) increase total assets and decrease owner's equity C) increase owner's equity and increase total assets D) increase total assets and decrease liabilities 64) An owner investment of office furniture into the business would: A) decrease owner's equity.
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60) At the end of the fiscal period, Wilf Carter Services omitted the adjusting entry for amortization on equipment. The effect of this error on the financial statements is to: A) understate liabilities B) understate owner's equity C) overstate expenses D) overstate assets 61) If an adjustment for prepaid insurance is not made at year.
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76) Recording service revenue on account as a cash transaction will cause: A) accounts receivable to be overstated B) owner's equity to be understated C) cash to be overstated D) service revenue to be understated 77) Recording salaries paid to employees as a debit to accounts receivable and a credit to cash will cause: A) accounts.
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144) Describe the posting process and how it relates to the accounting process. Give an example in your discussion. 145) Given a random list of accounts with their normal balances, prepare a trial balance for Sanders Mobile as of December 31, 2010. List the accounts in the appropriate order. Capital$75,200 Building55,000 Accounts receivable19,500 Note payable63,000 Service.
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138) Prepare journal entries in good form for the following transactions. a)Owner, Mira Addington invested equipment valued at $4,500 and cash of $7,000 into the business. b)Purchased office supplies for cash, $550. c)Paid $700 for current month's rent of office space. d)Billed a client $2,000 for services rendered. e)Owner, Mira Addington withdrew $1,600 for personal.
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Table 2-1 The following is a  list of the accounts and their balances appearing in the ledger of Henry Garage Repairs as of December 31, 2010, the company's year end.  The accounts are in alphabetical order and have normal balances.              Accounts payable$ 450 Accounts receivable 1,250 Cash 400 Equipment .
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149) Given the following transactions for the The Warren Candle Company,  prepare a trial balance as of August 31, 2010. a)  Owner, Wendy Warren invested $16,000 cash and equipment with a value of $7,500 into the business. b)  Purchased supplies on account, $350. c)  Rented office space paying one month's rent, $950. d)  Performed.
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Match the following.   A) liability B) revenue C) corporation D) asset E) capital F) transaction 109) A business owned by shareholders 110) Another name for the owner's equity of a proprietorship 111) An event that affects the financial position of a particular entity and can be reliably recorded 112) An increase in owner's equity that is earned by delivering goods.
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147) Journalize the following transactions for Redmond Storage and prepare a trial balance dated June 30, 2010. a) Owner, Roger Redmond invested $10,000 cash into the business. b) Rented an office and paid one month's rent, $1,100. c) Purchased $450 of supplies on account. d) Performed a service on account, $1,550. e) Paid $2,500 cash.
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40) The concept that requires that accountants accrue revenue at the end of the accounting period for work performed but not yet billed is the: A) Cost principle B) Time-period assumption C) Recognition criteria for revenue D) Matching objective 41) The matching objective is the basis for recording: A) revenues B) expenses C) assets D) liabilities 42) Accrued expenses are.
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136) State whether the account should be debited or credited and the normal balance of the account for the items listed below: Account Recorded as a debit or credit Normal balance of the account a) Decrease in Accounts payable b) Decrease in Salary expense c)  Decrease in Withdrawals d) Increase in Capital e) Increase  in Supplies f)  Decrease in Accounts receivable g).
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137) Assets and liabilities for Stan's Garage at the beginning and end of the current accounting period are as follows: January 1December 31  Total assets$450,000$690,000 Total liabilities$325,000$440,000 a)  Determine net income or net loss for the current year. The owner did not invest any additional assets during the year and made no withdrawals. b) .
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149) Classify each event below as an operating activity, investing activity, or financing activity. a)______________  Owner invested cash into the entity. b)______________  Purchased equipment for cash. c)______________  Paid salaries of employees. d)______________  Collected cash on account and from cash customers. e)______________  Paid utilities for the current period. f)______________  Borrowed money from the bank. g) ______________  Pay for.
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151) State whether the following errors would cause the trial balance to be out of balance by placing a check mark in the appropriate column. InOut of BalanceBalance   __________  __________a) Services rendered for $200 cash were recorded twice in the journal and posted twice to the ledger. __________  __________b) Services rendered on account for.
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86) An owner investment of a building, valued at $200,000,  along with a $55,000 outstanding mortgage, into an entity would: A) increase owner's equity $145,000 B) increase total assets $55,000 C) decrease liabilities $145,000 D) increase owner's equity $200,000 87) Performing services on account would: A) increase net income, decrease total assets, and decrease owner's equity B).
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140) Following is a list of events for Manning Cleaning for the month of April. Show the effects of these events on the accounting equation by completing the table below. April 1Owner invested $10,000 cash and equipment valued at $25,000 into the business. 3Purchased $5,500 of equipment on account. 5Purchased $400 of supplies for.
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33) The principle that states that assets acquired by the business should be recorded at their exchange price is the: A) objectivity principle B) cost principle of measurement C) revenue-recognition principle D) matching principle 34) The qualitative characteristic that states that accounting records and statements are based on the most reliable data available so they.
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132) List and define three generally accepted accounting concepts/principles discussed in Chapter 1. 133) Determine the expenses for the current period based on the following data: 134) Determine the expenses for the current period based on the following data: .
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30) An important fact related to accrual accounting is that: A) adjusting entries are not required B) revenue is recorded when cash is received C) expenses are recorded when incurred D) revenue is recorded when cash is received and expenses are recorded when incurred 31) The two most widely used methods of accounting are: A) financial.
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83) The financial statement that presents a summary of the assets, liabilities, and owner's equity as of a specific date is the: A) statement of assets B) balance sheet C) statement of owner's equity D) cash flow statement 84) The statement that presents a summary of the revenues and expenses of an entity is called.
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For the items listed below, choose the appropriate code letter to indicate whether the item is an asset, liability, or owner's equity item: AssetA LiabilityL Owner's EquityOE A) A B) OE C) L 115) Accounts receivable 116) Office supplies 117) Truck 118) Don Smith, Capital 119) Salary payable 120) Note payable 121) Cash 122) Land 123) Accounts payable 124) Office furniture   .
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73) Receiving cash for services performed the same day would: A) increase owner's equity and decrease total assets B) decrease total assets and decrease liabilities C) increase liabilities and increase total assets D) increase owner's equity and have no effect on liabilities 74) A business receives its bill for utilities for the current month that.
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26) The basic summary device of accounting is the: A) ledger B) account C) debit D) credit 27) Accounts are grouped in a book called the: A) trial balance B) chart of accounts C) journal D) ledger 28) Credit is a term representing: A) the right side of an account B) an increase C) a decrease D) the left side of an account 29) All.
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96) The investment of cash into the business by the owner would: A) increase net income B) decrease owner's equity C) have no effect on liabilities D) decrease assets 97) The payment of an amount owed to a supplier would: A) have no effect on total assets or liabilities B) increase owner's equity and liabilities C) decrease net.
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21) A prepaid expense recorded initially as an expense is adjusted by crediting the asset account. 22) When a prepaid expense is recorded initially as an expense, the adjusting entry transfers the unused portion of the expense to the asset account. 23) When a prepaid expense is recorded initially as an asset,.
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Match the following.   A) ledger B) chart of accounts C) debit D) credit E) normal balance F) journalizing G) trial balance H) posting I) account J) journal 107) The basic summary device of accounting 108) The left-hand side of an account 109) The right-hand side of an account 110) The book of accounts 111) The chronological record of an entity's transactions 112) Transferring the amount.
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