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Study Resources (Accounting)

2.4-53The following entries were made by the accountant of Patel Pastries during its first month of                                                         operation: 1.James Patel, the owner, deposited $3,000 in the business's new checking account. 2.Patel Pastries paid the first month's rent of $400 in cash. 3.Patel Pastries purchased equipment by signing.
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3.2-5In accounting, the matching principle means to match which of the following? A)Revenues to liabilities B)Expenses to assets C)Expenses to revenues D)Expenses to liabilities 3.2-6The matching principle means which of the following? A)Revenues are subtracted from expenses. B)Expenses are subtracted from revenues. C)Assets are subtracted from liabilities. D)Liabilities are subtracted from expenses.  3.2-7The revenue principle guides accountants in.
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2.4-23A business borrows cash by signing a note payable. Which account is debited?  A) Notes payable B) Accounts payable  C) Accounts receivable D) Cash  2.4-24A business borrows cash by signing a note payable. Which account is credited?  A) Notes payable B) Accounts payable  C) Accounts receivable D) Cash  2.4-25A business repays the.
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1.5-12A relatively low amount of government regulation is a key advantage of a: A)partnership. B)not-for-profit. C)corporation. D)proprietorship. 1.5-13One beneficial characteristic of a proprietorship is: A)that the owner also manages the business. B)the owner appoints a board of directors to manage the business. C)the owner’s interest is separate from the manager’s interest. D)the owner does not need to be involved.
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2.3-28The first step of journalizing an entry is to:  A) post the accounts to the ledger.  B) identify each account affected and its type.  C) determine whether each account is increased or decreased. D) record the transaction in the journal, including a brief explanation.  2.3-29Which of the following is the.
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2.1-11Accountants first record transactions in the:  A) chart of accounts.  B) trial balance.  C) journal.  D) ledger. 2.1-12Which of the following accounts is an asset?  A) Salary expense  B) Accounts payable  C) Service revenue  D) Prepaid expenses  2.1-13Which of the following accounts is a liability?  A) Accounts payable  B) Prepaid.
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1.9-23On Jan. 1, 2012, William Kelly started Kelly’s Computer Service by investing $10,000.  On Jan. 3, the                                           business borrowed $10,000 from a creditor and executed a Note payable with the principal and interest to                                           be due in one year.  On Jan. 5, the business.
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1.5-3A proprietor may have to pay self-employment tax in addition to income tax. 1.5-4In an LLC, the business, not the owners, is responsible for the corporation’s debts. 1.5-5A proprietorship is created by: A)  electing a board of directors. B)  obtaining a state charter. C)  issuing shares of stock. D)  one individual deciding to start a business. 1.5-6In.
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1.4-8Corporate ownership is a very popular type of ownership in the United States. Which of the following is a                             major reason that corporate ownership is popular?  A) Corporate shareholders have limited liability for the debts of the corporation.  B) Most corporations are small or medium-sized.  C) The life.
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Exercises 1) Avery died testate early in 2011. The following transactions occurred relating to Avery's estate. 1.Avery's estate included bonds with a fair (market) value of $120,000. On the date of Avery's death, there was $2,000 of accrued but unpaid interest. Two months after Avery's death, a check arrived in the amount.
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2.4-43Which of the following journal entries would be recorded if a business purchased $200 of supplies by                                           paying cash?  A)Cash200      Supplies 200 B)Accounts payable200      Supplies 200 C)Supplies200      Cash 200 D)Supplies200      Accounts payable 200 2.4-44A business purchased a building by.
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1.9-24Alice Li started Li Design Consultants and invested $5,000 into the business.   On Dec. 12, she rendered                                           services to three clients “on account” with total revenues earned of $4,500.  She then incurred advertising                                           expense on four different websites and promised to pay a total.
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2.5-1In a trial balance, total debits are always equal to total credits.  2.5-2The trial balance is generally used only inside the business and is not published with the other financial                                           statements. 2.5-3A trial balance summarizes a ledger by listing all the accounts with their ending balances.  2.5-4Data.
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3.1-11Which of the following accounts does cash-basis accounting ignore? A) Payables B) Revenue C) Cash D) Expenses 3.1-12Which of the following entries would be recorded ONLY if a company is using the accrual method of                                           accounting?  A)Cash1,000      Accounts receivable 1,000 B)Salary expense1,000      Cash 1,000 C)Cash1,000      Service.
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1.7-16Total liabilities increase by $7,000. How is the accounting equation affected?  A) Either assets have increased by $7,000, or owner’s equity has decreased by $7,000.  B) Assets have decreased by $7,000.  C) Assets and owner’s equity have each decreased by $3,500.  D) Owner’s equity has increased by $7,000.  1.7-17An individual.
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2.4-13A business renders services for $16,000 and collects cash from the customer. Which account is debited?  A) Cash  B) Accounts receivable  C) Service revenue  D) Accounts payable 2.4-14A business renders services for $16,000 and collects cash from the customer. Which account is credited?  A) Cash  B) Accounts receivable  C) Service.
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1.8-13Martin Supply Service received $1,000 cash from a customer which was owed to the business from the                                           previous month.  What is the effect of the cash receipt on the accounts of the business? A)  Accounts receivable decreases; Owner’s capital account decreases. B)  Cash account increases; Accounts receivable decreases. C)  Accounts.
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2.1-21Which of the following is NOT part of owner’s equity? A) Accounts receivable B) Capital C) Notes payable D) Both A and C 2.1-22A book holding all of the accounts is called the: A) ledger. B) journal. C) income statement. D) balance sheet. 2.1-23Which of the following is the detailed record of the changes in a particular asset, liability,.
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1.8-3Joe purchased office equipment for $1,250 cash.  What is the effect on accounts? A)  One asset account increases; one liability account increases. B)  Two asset accounts increase. C)  One asset account increases; another asset account decreases. D)  One asset account increases; one equity account increases. 1.8-4Bill purchased office supplies for $500 cash.  What is the.
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1.2-12Which of the following are likely to be users of financial accounting information? A)  Taxing authorities B)   Creditors C)   Potential investors D)  All of the above 1.3-1The AICPA's Code of Professional Conduct for Accountants provides guidance to CPAs in the                                                         performance of their work.  1.3-2GAAP refer to the set of accounting.
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9) Philiam Benedict dies on October 1, 2011, leaving his entire estate to his sole surviving niece, Muriel Finster. After all devise distributions and payments for estate expenses and liabilities, the fair value of Philiam's estate is $6,350,000. Required: Calculate the federal estate tax on Philiam's estate, assuming that federal estate taxes.
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1.7-26Sharon Samson starts a plumbing service named Reliable Waterworks. Selected transactions are                                                         described as follows: A) Sharon deposits $7,000 into a new checking account for the business, recording the capital                                           contribution. B) Reliable pays $4,000 cash for equipment to be used for plumbing repairs. C).
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2.4-34A business purchased $200 of supplies on account and recorded the following journal entry: Supplies 200      Accounts payable 200 Which of the following sets of ledger accounts reflect the posting of this transaction? Which of the following sets of ledger accounts reflect the posting of this transaction? A) Supplies 200 B) Supplies 200 C) Supplies 200 D) Supplies 200 Accounts payable 200 Accounts payable 200 Accounts payable 200 Accounts.
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2.1-2A chart of accounts is the book holding all of the company's accounts.  2.1-3A trial balance is the list of all a company's accounts along with their account numbers.  2.1-4A journal is a chronological record of transactions.  2.1-5In a typical chart of accounts, liabilities appear before assets. 2.1-6A trial balance is.
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2.4-3When a business records an expense incurred, the expense account is always credited.  2.4-4When a business records revenue earned, the revenue account is always credited.  2.4-5An owner invests $20,000 in her new business by depositing the cash in the business's checking                                                         account. Which account is debited? .
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2.3-18For Cash, the category of account and its normal balance are: A)Assets and a debit balance. B)Liabilities and a credit balance. C)Owner’s equity and a credit balance. D)Assets and a credit balance. 2.3-19For Capital, the category of account and its normal balance are: A)Owner’s equity and a credit balance. B)Assets and a debit balance. C)Liabilities and a credit.
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1.2-2Business owners use accounting information to set goals, evaluate progress toward those goals, and take                                           corrective action when needed.  1.2-3Outside investors would ordinarily use financial accounting information to decide whether or not to invest                             in a business.  1.2.4An investor is someone who loans money to.
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1.1-1Accounting is the information system that measures business activity, processes the data into reports, and                                           communicates the results to decisions makers.  1.1-2Accounting is "the language of business."  1.1-3A debt that a business owes to an outside party is called: A)  an asset. B)  a liability. C)  stockholders’ equity. D)  revenue. 1.1-4There are.
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1.6-9Which of the following concepts (or principles) require an assumption that the entity will remain in                                           operation for the foreseeable future?  A) Entity concept  B) Faithful representation principle  C) Going-concern concept  D) Cost principle  1.6-10Bill Rogers has three different businesses. He has only one bank account for.
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13) Silvia Peacock has been appointed to serve as the executor of the estate of Mr. Mickey Babay, who passed away at the age of 104 on April 5, 2011. On April 5, 2011, Mr. Babay's assets consisted of the following: Asset Book Value Fair Value Cash $40,000 $40,000 Mutual fund investment 170,000 170,000 Selonoid Incorporated common stock 22,000 28,000 Ford Mustang 24,000 16,000 Condo in.
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2.5-23The following transactions have been journalized and posted to the proper accounts. Prepare a trial                                           balance in good form. a.Edward Wilson invested $8,000 cash in his new landscaping business. b.The business paid the first month's rent with $300 cash. c.The business purchased equipment by paying $2,000 cash and.
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2.4-33Which of the following journal entries would be recorded if a business purchased $200 of supplies on                                           account?  A)Accounts payable200      Supplies 200 B)Supplies200      Accounts payable 200 C)Supplies200      Cash 200 D)Cash200      Supplies 200 2.4-34Which of the following journal entries would.
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2.3-8A journal entry includes BOTH debit and credit amounts. 2.3-9In the accounting system, the first place that transactions are recorded is the ledger.  2.3-10Which of the following groups of accounts BOTH normally have a debit balance?  A) Assets and Expenses  B) Revenues and Expenses  C) Liabilities and Owner’s equity  D) Assets.
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1.9-11Which of the following financial statements reports expenses in decreasing order of their amounts, with the largest expense first?   A) Statement of cash flows B) Income statement  C) Statement of owner’s equity D) Balance sheet  1.9-12Which of the following financial statements uses net income or net loss taken directly from the income.
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1.3-10The Sarbanes-Oxley Act (“SOX”) made it a criminal offense to: A)steal shareholders’ money. B)default on loans from creditors. C)declare bankruptcy. D)falsify financial information. 1.3-11Which of the following organizations requires publicly owned companies to be audited by independent                                           accountants (CPAs)? A)SEC B)PCAOB C)FASB D)AICPA 1.3-12Which of the following organizations or groups issue an opinion on whether a company’s.
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1.9-1The balance sheet of a business represents the account balances as of a particular date in time. 1.9-2By looking at a statement of owner’s equity, you can evaluate the effect of drawings on the ending                                           balance in owner’s equity.  1.9-3Beginning owner’s capital was $25,000. Ending owner’s capital is.
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2.2-8Which of the following accounts decreases with a credit?  A) Cash  B) Capital  C) Accounts payable  D) Notes Payable 2.2-9Which of the following accounts increases with a debit?  A) Cash  B) Interest payable  C) Accounts payable  D) Capital 2.2-10Which of the following accounts decreases with a debit?  A) Notes payable  B).
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1.7-6Assets are $270,000 and owner’s equity is $90,000. Liabilities will be:  A) $ 60,000.  B) $360,000.  C) $270,000.  D) $180,000.  1.7-7A business performs services for its customers. Payment is expected to be received next month. How                                           does the performance of services affect the accounting equation? A) Liabilities.
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2.4-61A business is started by receiving $5,000 cash from the owner.  Please provide the journal entry (debits                                           first, credits second.) 2.4-62A business purchases land for $100,000 cash.  Please provide the journal entry (debits first, credits                                           second.) 2.4-63A business purchases supplies for $200 on account.  Please provide.
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1.10-1The income statement shows whether or not a business can generate enough cash to pay its liabilities. 1.10-2The balance sheet shows whether or not a business is earning a profit. 1.10-3You can evaluate business performance in terms of profitability by analyzing which financial statement? A)  Income statement B)  Balance sheet  C)  Statement of cash.
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3.1-1Accrual accounting records transactions ONLY when cash is received or paid.  3.1-2The owner of Recipes.org purchases $2,000 of supplies on account. Under the accrual basis of                                                         accounting, no entry is made until the $2,000 is paid.  3.1-3In cash-basis accounting, revenue is recognized when cash is received.
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2.5-25At the end of a month, a business shows the following balances in its ledger.             Cash Accounts receivable       Supplies                         Land 5,000 1,200 200 20,000   Accounts payable          Capital    Service revenue                 Rent expense 1,300 1,000 35,500 4,500      Salary expense     Utility expense 6,000 900 Please use this data to prepare a trial balance. Account title Debit Credit .
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