Accounting Test one

The Accounts Payable account of​ Waterford, Inc. has the following​ postings: Accounts Receivable ​17,000. 27,000 ​8,000. 12,000 Calculate the ending balance of the account.

$14,000

The balances of select accounts of​ Donovan, Inc. as of December​ 31, 2018 are given below. Debit Credit Building $110,000 Cash 10,000 Office Supplies 800 Furniture 6,000 Prepaid Insurance 600 Accumulated Depreciation—Furniture $1,000 Land 35,000 Accumulated Depreciation—Building 4,500 Accounts Receivable 1,000 What amount of total long−term assets would be shown on the balance sheet at December​ 31, 2018? A. $151,000

$145,500 PIC ON PHONE

he Accounts Receivable account of​ Brownstone, Inc. has the following​ postings: Accounts Receivable 25,000. 3,000 4,000 Calculate the ending balance of the account

$26,000 debit

Regent Plumbing Corporation provides plumbing services. Selected transactions of Regent Plumbing Corporation are described as​ follows: ​a) Received $8,000 cash and issued common stock to Sharon Regent. ​b) Paid $6,000 cash for equipment to be used for plumbing repairs. ​c) Borrowed $10,000 from a local bank and deposited the money in the checking account. ​d) Paid $600 rent for the year. ​e) Paid $200 cash for plumbing supplies to be used next year. ​f) Completed a plumbing repair project for a local lawyer and received $4,000 cash. Calculate the net income. Assume plumbing supplies of $200 are left at the end of the accounting period.

$3,400

The following extract was taken from the worksheet of Special Events Bakers for the year 2019. Special Events Bakers Worksheet December​ 31, 2019 Account Names Cash Equipment Accumulated Depreciation − Equipment Unadjusted Trial Balance Debit Credit $7,000 15,400 $8,300 Adjusted Trial Balance Debit Credit $7,000 15,400 $9,100 For the above​ information, determine the amount of Depreciation Expense for the equipment used in the business.

$800 PIC ON PHONE

For each​ account, identify if the change would be recorded as a debit​ (DR) or credit​ (CR).

11.Increase to Cash DR 12.Decrease to Accounts Payable DR 13.Increase to Common Stock CR 14.Increase to Unearned Revenue CR 15.Decrease to Accounts Receivable CR 16.Increase to Interest Revenue CR 17.Increase to Rent Expense DR 18.Decrease to Office Supplies CR 19.Increase to Prepaid Rent DR 20.Increase to Notes Payable CR

Converse Florists​ & Co. reported assets of $900 and equity of $350. What is its debt​ ratio? (Round your percentage answer to two decimal​ places.)

61.11%

Assume Metro Corporation had a net income of $2,200 for the year ending December 2018. Its beginning and ending total assets were $30,500 and $20,000​, respectively. Calculate​ Metro's return on assets​ (ROA). (Round your percentage answer to two decimal​ places.)

8.71%

For each account​ listed, identify whether the account is a temporary account​ (T) or a permanent account​ (P).

Account P or T a.Rent Expense T b.Prepaid Rent P c.Equipment P d.Common Stock P e.Salaries Payable P f.Dividends T g.Service Revenue T h.Supplies Expense T i.Office Supplies P

A​ customer's promise to pay in the future for services or goods sold is called​ a(n) ________.

Accounts Receivable

Which of the following is an asset​ account?

Accounts Receivable

Using the expanded accounting​ equation, solve for the missing amount. Assets $71,288 Liabilities 2,260 Common Stock ? Dividends 14,420 Revenues 53,085 Expenses 28,675 Begin by selecting the formula for the expanded accounting equation. Then enter the amounts to solve for the missing amount.

Assets= Liabilities +Common Stock -Dividends +Revenues -Expenses 71,288= $2,260 +$59,038 -$14,420 +$53,085 -$28,675

Regarding the​ double-entry system, which of the following statements is​ incorrect?

Because of​ technology, the use of the​ double-entry system of accounting is optional.

Which of the following is the most liquid​ asset?

Cash

1.Rent Expense E 2.Common Stock E 3.Furniture A 4.Service Revenue E 5.Prepaid Insurance A 6.Accounts Payable L 7.Unearned Revenue L 8.Notes Receivable A 9.Dividends E 10.Insurance Expense E

Consider the following accounts and identify each as an asset​ (A), liability​ (L), or equity​ (E).

Janno Enterprises prepaid four months of office rent totaling $8,400 on October​ 1, 2019. The rent period begins on October 1. Assuming Janno records deferred expenses using the alternative​ treatment, what would be the adjusting entry recorded on December​ 31, 2019?

Debit Prepaid Rent and credit Rent Expense for $2,100

Williams Enterprises prepaid six months of office rent totaling $8,000 on October​ 1, 2019. Assuming Williams records deferred expenses using the alternative​ treatment, what would be the entry on October​ 1, 2019?

Debit Rent Expense and credit Cash for $8,000

Which of the following is not a balance sheet​ account?

Dividends

The guidelines for accounting information are called Generally Accepted Accounting Principles​ (GAAP). T or F

True

The​ stockholders' claim to the assets of a business is called equity or​ stockholders' equity.

True

Unearned Revenue is a liability account.

True

Critical thinking and judgment skills are not necessary for accountants because technology has made the activities routine. T or F

f

The field of accounting that focuses on providing information for external decision makers is​ ________. financial accounting a. financial accounting B.cost accounting C. nonmonetary accounting D.managerial accounting

financial accounting

​Patents, copyrights, and trademarks are examples of​ ________.

intangible assets

The field of accounting that focuses on providing information for internal decision makers is​ ________.

managerial accounting

Liabilities are economic resources that are expected to benefit the business in the future.

F

Managerial accounting focuses on providing information for external decision makers.

F

A liability account is increased by a debit.

False

A net loss from the Balance Sheet decreases Retained Earnings.

False

A worksheet is an external document that forms a part of the financial statements.

False

A​ T-account is a summary device with credits posted on the left side of the vertical line.

False

Dividends and expenses increase equity.

False

Liquidity is a measure of how quickly an item can be converted to net income.

False

Marcy's Event Planning​ Services, Inc. records deferred expenses and deferred revenues using the alternative treatments. The business makes adjusting entries as needed to bring its books to the full accrual basis once a year at the end of the year. On October​ 1, Marcy's paid $3,700 for insurance for a one−year period. At the end of the​ year, it will make an adjusting entry that debits Insurance Expense for $2,467.

False

Revenue may be called Profit and Net Income may be called Turnover in an income statement prepared under IFRS.

False

The Common Stock account is increased by a debit.

False

The account names in the chart of accounts are standardized and thus are the same for all businesses.

False

Which of the following is the record holding all the​ accounts, the changes in those​ accounts, and their​ balances?

Ledger

The account title used for recording a written promise that a customer will pay the business a fixed amount of money and interest by a certain date in the future is​ ________.

Notes Receivable

Super Fast Handyman Services has total assets for the year of $20,700 and total liabilities of $10,500. Requirements 1.Use the accounting equation to solve for equity. 2.If next year assets increased by $5,000 and equity decreased by $3,300​, what would be the amount of total liabilities for Super Fast Handyman​ Services?

Requirement 1 Equity​ = ​($20,700 ​- $10,500​) ​= $10,200 Requirement 2 Liabilities​ = Assets​ - Equity Liabilities​ = ​($20,700 ​+ $5,000​) ​- ​($10,200 ​- $3,300​) ​= $18,800 Begin by solving for the accounting equation. Then use the formula to solve for equity. Assets =Equity +Liabilities The company has equity of $ 10,200 .Requirement 2. If next year assets increased by $5,000 and equity decreased by $3,300​, what would be the amount of total liabilities for Super Fast Handyman​ Services? The company has liabilities of $ 18,800 .

McGregor Insurance Agency started the year with a beginning Retained Earnings balance of $27,500. During the​ year, McGregor Insurance Agency earned $34,000 of Service Revenue and incurred $23,500 of various expenses. Dividends of $12,000 from the business were paid to stockholders. After the closing entries are recorded and​ posted, what will be the balance of Retained​ Earnings? Review Only LOADING... Click the icon to see the Worked Solution. Post the beginning balance and closing entry amounts to the Retained Earnings account. Use a​ "Bal." posting reference to show the beginning and ending balance of the Retained Earnings account. Use a​ "Clos." posting reference to show the amounts that are posted while closing the books. The revenue and expense amounts should be combined into one closing entry for net income​ (like you are closing the Income Summary​ account).

Retained Earnings 27,500 Bal. Clos.12,000 10,500Clos. 26,000Bal. PIC ON PHONE

Accounting is the information system that measures business​ activities, processes the information into​ reports, and communicates the results to decision makers. T or F

T

Business owners use accounting information to set​ goals, evaluate progress toward those​ goals, and make adjustments when needed. T or F

T

Income tax is calculated using accounting information.

T

Outside investors ordinarily use financial accounting information to decide whether or not to invest in a business. T or F

T

A chart of accounts is a list of all of a​ company's accounts with their account numbers.

True

An asset account is increased by a debit.

True

Aspen Event Planning​ Services, Inc. records deferred expenses and deferred revenues using alternative treatments. It makes adjusting entries as needed to bring its books to the full accrual basis once a year at the end of the year. On December​ 15, it collected $3,000 from a customer in advance for a series of events that will start late December and end in March. At the end of the​ year, it had performed approximately​ 10% of the services for its customer. The adjusting entry on December 31 will include a debit to Service Revenue for $2,700.

True

Companies use a ledger to show all of the increases and decreases in each account along with their balances.

True

In a classified balance​ sheet, assets are reported in the order of liquidity and liabilities are listed in the order in which they must be paid.

True

In reviewing the T−account for Accounts​ Payable, you find that the beginning balance is​ zero, the total increases are $7,800and the total decreases are $4,900.This means that the ending balance of the account is a credit balance of $2,900.

True

Intangible assets are long−term assets that have no physical form and convey special rights.

True

Revenues and​ stockholders' contributions in the business increase equity.

True

For each account​ listed, identify the category that it would appear on a classified balance sheet. Use the following​ categories: Current​ Assets; Long-term​ Investments; Property,​ Plant, and​ Equipment; Intangible​ Assets; Current​ Liabilities; Long-term​ Liabilities; and​ Stockholders' Equity. If the item does not belong on the classified balance​ sheet, put an X.

a.Land (used in operations) Property, Plant, and Equipment b.Accumulated Depreciation-Equipment Property, Plant, and Equipment c.Common Stock Stockholders' Equity d.Service Revenue X e.Investment in Starbucks Corporation (to be held long-term) Long-term Investments f.Accounts Receivable Current Assets g.Equipment Property, Plant, and Equipment h.Buildings Property, Plant, and Equipment i.Notes Payable (due in 10 years) Long-term Liabilities j.Unearned Revenue Current Liabilities k.Cash Current Assets l.Accounts Payable Current Liabilities m.Prepaid Rent Current Assets n.Dividends X o.Land (held for investment purposes) Long-term Investments p.Depreciation Expense X PIC ON THE PHONE

The financial statements are prepared from the​ ________.

adjusted trial balance

​Property, plant, and equipment are ​ ________.

also called fixed or plant assets

The financial statement that reports​ assets, liabilities, and​ stockholders' equity as of the last day of the period is called the​ ________.

balance sheet