Acct 220 Final

Prior to adjusting entries, Prepaid Rent has a balance of $8,300. The following year-end adjusting entry was made by the company: Dr. Rent Expense $6,800 Cr. Prepaid Rent 6,800 What balance would be shown for Prepaid Rent in the adjusted trial balance?

$1,500

Stimpleton Company engages in the following cash payments: Purchase equipment $ 2,000 Pay rent 500 Repay loan to the bank 5,000 Pay workers' salaries 1,000 What is the total amount of cash paid for operating activities?

$1,500

Assume that Sallisaw Sideboards, Inc. had a retained earnings balance of $10,000 on April 1, and that the company had the following transactions during April Issued common stock for cash, $5,000 Provided services to customers on account, $2,000 Provided services to customers in exchange for cash, $900 Purchased equipment and paid cash, $4,300 Paid April rent, $800 Paid employees' salaries for April, $700 What was Sallisaw retained earnings balance at the end of April?

$11,400

A company's accountant is trying to prepare an adjusted trial balance from the list of accounts below Cash $12,000 Retained Earnings 31,000 Prepaid Rent 2,000 Salaries Expense 15,000 Equipment 68,000 Service Revenue 40,000 Miscellaneous Expense 10,000 Supplies 4,000 Dividends 3,000 Accounts Payable 5,000 Common Stock 38,000 What is the total amount of debits?

$114,000

Assets = $25,000; Liabilities = $13,000; Stockholders equity = ?

$12,000

Increase in stockholders equity = $20,000; Issuance of common stock = $12,000; Dividends = $5,000; Net income = ?

$13,000

A company had the following amounts at the end of the year: Cash $11,200 Supplies Expense 1,500 Dividends 2,600 Service Revenue 23,500 Prepaid Rent 4,300 Salaries Expense 8,200 Accounts Payable 12,700 Land 36,900 What amount would the company report for the net income?

$13,800

Finish Motors has the following accounts on its trial balance: Land $150,000 Equipment 90,000 Salaries Payable 12,000 Notes Payable 99,000 Supplies 10,000 Cash 25,000 Common Stock 40,000 Retained Earnings 100,000 Accounts Payable ? Prepaid Rent ? If the trial balance has a total amount in the credit column of $290,000, what is the balance of the company's Prepaid Rent account?

$15,000

Rachel's Recordings reported net income of $200,000. Beginning balances in Acounts Recivable and Accounts Paybale were $15,000 and $20,000, respectively. Ending balances in these accounts were $12,000 and $22,000 respectively. Assuming that all relevant information has been presented, Rachel's net cash flows from operating activities would be:

$205,000

Given the information below about Thomas Corporation, what was the amount of dividends the company paid in the current period? Beginning retained earnings $54,000 Ending retained earnings 110,000 Decrease in cash 10,000 Net income 84,000 Change in stockholders equity 15,000

$28,000

The following financial information is from Bronco Company Retained Earnings 52,000 Supplies 37,000 Equipment 72,000 Accounts Receivable 8,600 Deferred Revenue 6,000 Accounts Payable 15,000 Common Stock 25,000 Notes Payable (due in 18 months) 35,000 Interest Payable 7,000 Cash 22,400 What is the amount of current liabilities?

$28,000

Lenses Laboratories' net income was $250,000. Given the account information below, what is the net cash flows from operating activities for Lenses Laboratories? Increase in accounts receivable $60,000 Increase in salaries payable 50,000 Decrease in inventory 30,000 Depreciation expense 45,000 Increase in prepaid insurance 3,000

$312,000

The following amounts are reported in the ledger of Mariah Company: Assets $80,000 Liabilities 36,000 Retained Earnings 12,000 What is the balance in the Common Stock account reported on the balance sheet?

$32,000

DW Inc. has an ending Retained Earnings balance of $51,000. If during the year DW paid dividends of $4,300 and had net income of $22,500, then what was the beginning retained earnings balance?

$32,900

If total change in cash = $44,000, net operating cash flows = $22,000, and net investing cash flows = ($13,000); then net financing cash flows = ?

$35,000

The ending Retained Earnings balance of Juan's Mexican Restaurant chain increased by $3.2 million from the beginning of the year. The company declared a dividend of $1.3 million during the year. What was the amount of net income during the year.

$4.5 million

The accounts receivable account has a beginning balance of $10,000 and the company provides services of $50,000 on account during the month. The ending balance was $12,000. How much did the company collect from customers during the month?

$48,000

A company has the following three events in December: December 1 - Pay last month's rent (November), $500 December 15 - Pay rent for the current month (December), $500 December 31 - Pay rent for the following year, $6,000 How much would be recorded as rent expense for the month of December?

$500

Elston Company compiled the following financial information as of December 31, 2022: Service Revenue 840,000 Common Stock 180,000 Equipment 240,000 Total Expenses 750,000 Cash 210,000 Dividends 60,000 Supplies 30,000 Accounts Payable 120,000 Accounts Receivable 90,000 Retained Earnings, January 1,2022 450,000 Elston's total stockholders equity on December 31, 2022 is:

$660,000

Use the following appropriate amounts to calculate net income: Revenues, $12,000 Liabilities, $5,000 Expenses, $4,000 Assets, $19,000 Dividends, $4,000

$8,000

At the beginning of the year, a company had a balance in its prepaid insurance account of $48,400. During the year, $86,000 was paid for insurance. At the end of the year, after adjusting entries were recorded, the balance in the prepaid insurance account was $42,000. Insurance expense for the year would be:

$92,400

A company provided $1,500 of services to customers during the month of May. The customers paid in June. What would the impact of these transactions be during May on (1) the balance of cash, (2) cash basis net income, and (3) accrual basis net income?

(1) no effect, (2) no effect, (3) increase

Record the following transactions: Hired Rebecca as an administrative assistant, promising to pay her $2,000 every two weeks Rented a building for three years at $500 per month and paid six months' rent in advance Purchased $1,800 of supplies on account Paid for supplies purchased in item before

- nothing to record - Dr. Prepaid Rent 3000 Cr. Cash 3000 -Dr. Supplies 1800 Cr. Accounts Payable 1800 -Dr. Accounts Payable 1800 Cr. Cash 18000

Record the journal entry for each transaction On December 1, 2024, the company provides services to customers for $6,500 cash

12/1/24 Dr. Cash $6,500 Cr. Service Revenue 6,500

Record the journal entry for each transaction On December 15, 2024, A company paid $4,000 from office supplies previously purchased on account.

12/15/24 Dr. Accounts Payable $4,000 Cr. Cash 4,000

A company has the following transactions: Pay employees' salaries for the current period Pay rent in advance Pay dividends to stockholders in the current period Receive (but do not pay) a utility bill Use supplies previously purchased How many of these transactions result in an expense being reported in the current period using cash basis accounting

2

Considering the following items: Decrease in accounts receivable Issuance of common stock Increase in interest receivable Purchase of land Decrease in accounts payable Gain on the sale of equipment Depreciation expense Payment of dividends Decrease in utilities payable Increase in inventory How many of these items be added to net income when using the indirect method to prepare the operating activities section of the statement of cash flows

2

A company has the following transactions: Pay employees' salaries for the current period Pay rent in advance Pay dividends to stockholders in current period Receive (but do not pay) a utility bill Use supplies previously purchased How many of these transactions result in an expense being reported in the current period using accrual basis accounting?

3

Consider the adjustment process at the end of the accounting period. 1. Record the adjusting entries in the journal 2. Prepare an adjusted trial balance to check the equality of the debits and credits 3. Determine the accounts requiring adjustment using the unadjusted trial balance 4. Post the adjusting entries to the general ledger

3,1,4,2

Consider the following items: Decrease in accounts receivable Issuance of common stock Decrease in interest receivable Purchase of land Decrease in accounts payable Gain on the sale of equipment Depreciation expense Payment of dividends Decrease in utilities payable Increase in inventory How many of these items would be subtracted from net income when using the indirect method to prepare the operating activities section of the statement of cash flows?

4

Which of the following accounts would normally have a credit balance?

Accounts Payable, Service Revenue, Common Stock

For each of the following accounts highlight your answer to indicate weather we use a debit or a credit to decrease the balance of the account:

Accounts Receivable - Credit Accounts Payable - Debit Salaries Expense - Credit Service Revenue - Debit Supplies - Credit Common Stock - Debit Advertising Expense - Credit Dividends - Credit

Receiving a utility bill for costs in the current period but delaying payment until the following period is an example of an:

Accrued expense

Which statement is correct

Accumulated Depreciation - Equipment is a contra asset account

In preparing a statement of cash flows under the indirect method, an increase in accounts payable would be reported as a(n):

Addition to net income in the operating activities section

A list of all accounts and their balances after updating account balances for adjusting entries is referred to as:

An adjusted trial balance

The accounts that represent the resources of the company are called:

Assets

When a payment is made on an account payable

Assets and liabilities decrease

Current assets include:

Assets that will be used up or converted to cash within 12 months

Regions Inc. pays its rent of $60,000 annually on January 1 and makes monthly adjusting entries. If the February 28 monthly adjusting entry for prepaid rent is omitted, which of the following are true?

Assets will be overstated by $5,000 and net income and stockholders equity will be overstated by $5,000

The primary purpose of financial accounting is to:

Both measure and communicate financial information to external parties

Cash flows from financing activities include:

Cash dividends paid

Below is the companies Cash T account: Cash Dr. Beg. Bal. 1,200 5,200 Cr. 3,100 End Bal. 3,300 The $5,200 amount could represent which of the following

Collection from customers for services previously provided on account

Which of the following accounts appears in the statement of stockholders equity? - Common Stock - Assets - Cash - Deferred Revenue

Common Stock

Which business form has the advantage of limited liability?

Corporation

Clement Company paid an account payable related to a previous utility bill of $1,000. This transaction should be recorded as follows on the payment date:

Debit Accounts Payable $1,000, credit Cash $1,000

A company provides maintenance services to customers. The company's policy is to provide services and then bill customers on the 10th of the following month. In December 2021, the company provided services of $14,000 and plans to bill customers on January 10, 2022. What adjusting entry, if any, will the company record on December 31,2021?

Debit Accounts Receivable and credit Service Revenue for $14,000

A company received a bill for newspaper advertising services, $400. The bill will be paid in 10 days. How would the transaction be recorded today?

Debit Advertising expense $400, credit Accounts Payable $400

Yummy Foods purchased a one-year hazard insurance policy on August 1 and recorded the $4,200 premium to prepaid insurance. As its December 31 year end, Yummy Foods would record which of the following adjusting entries? Note: assume that Yummy Foods did not make adjusting entries in the months prior to December 31

Debit Insurance Expense and credit Prepaid Insurance for $1,750

Which of the following would not typically be used as an adjusting entry?

Debit cash and credit deferred revenue

Summer Leasing received $12,000 from a customer to cover 24 months of rent in advance. How should Summer record this transaction?

Debit cash; credit deferred revenue

When the company pays stockholders a dividend, what is the effect on the accounting equation for the company?

Decrease assets and decrease stockholders equity

Receiving cash from customers before services are performed results in:

Deferred Revenue

Which of the following statements is true?

Depreciation expense is an adjustment reported in the operating activities section of the statement of cash flows under the indirect method.

Muldoon Advertising has an opening balance in its supplies account of $2,400 and purchases $3,000 of supplies during the year. A year-end physical count shows $2,800 in supplies inventory. Which is the appropriate journal entry at year end?

Dr. Supplies Expense $2,600 Cr. Supplies $2,600

The cost of providing goods and services to customers are referred to as:

Expenses

T/F: Selling common stock for cash is recorded with a debit to common stock.

False

T/F: The primary functions of financial accounting are to measure business activities of a company and to communicate those measurements to internal parties for decision-making purposes.

False

Consider the following account balances of the Shattuck Law Firm at the end of the year: Accounts Payable $4,400 Salaries Expense 12,800 Cash 1,700 Common Stock 2,400 Service Revenue 8,300 Supplies 4,300 Retained Earnings 1,100 Utilities Expense 5,000 How many of these accounts would appear in Shattuck's year-end balance sheet?

Five

Which of the following is subtracted from net income as an adjustment under the indirect method of preparing the statement of cash flows?

Gain on the sale of land

The liquidity of an asset in a classified balance sheet refers to:

How quickly the asset will be converted to cash

Which of the following is true about a "credit"? I It represents an increase to dividends II It represents a decrease to assets III It represents an increase to liabilities IV It is on the right side of a T-account

II, III, IV

The statement of cash flows would include the payment of a dividend:

In the Financing activities section

Providing services and receiving cash will:

Increase assets and increase stockholders' equity

Frosty Inc. has the following balances on December 31 prior to closing entries: Revenues $35,000 Retained Earnings, Jan. 1 10,000 Cash 7,000 Expenses 23,000 Accounts Payable 4,000 Dividends 1,000 Supplies 18,000 Based upon the balances above, what net adjustment would be made to Retained Earnings due to closing entries?

Increase of $11,000

Cash flows from financing activities do not include:

Interest paid

McGill purchases additional office equipment to better serve its customers. This purchase is classified as what type of activity?

Investing activity

The primary focus for financial accounting information is to provide information useful for:

Investing and credit decisions

Shively Mfg. Co. sold land costing $10,000 for $12,000. Shively would report:

Investing cash flows of $12,000

A general ledger:

Is a collection of the entire group of accounts maintained by a company

An adjusted trial balance:

Is a list of all accounts and their balances after adjusting entries

If a company fails to adjust a Deferred Revenue account for revenue that should be recognized, what effect will this have on that month's financial statements?

Liabilities would be overstated (too high) and revenues will be understood (too low).

The following events pertain to Jasper Corporation: May 1 Jasper purchased office supplies of $3,000 on account May 5 The office supplies were shipped to Jasper May 8 Jasper used these office supplies for a one time event May 9 Jasper paid $3,000 cash for the office supplies purchased on May 1 Using cash basis accounting, on which date should Jasper record supplies expense?

May 9

Pumpkin Inc. sold $500 in pumpkins to a customer on account on January 1. On JAnuary 11, Pumpkin collected the cash from that customer. What is the impact of Pumpkin's accounting equation from the collection of cash on January 11?

No effect to the accounting equation

Pumpkin Inc. sold $500 in pumpkins to a customer on account on January 1. On January 11, Pumpkin collected the cash from that customer. What is the impact on Pumpkin's accounting equation from the collection of cash?

No net effect to the accounting equation

A customer purchased a drill press on November 14 on account from Sears. The drill press was delivered two weeks later. The customer paid for the drill press on December 5. When should Sears record the revenue for this transaction according to the revenue recognition principle?

November

Following are transactions of Gotebo Tanners, Inc., a new company, during the month of January: Issued common stock for cash Purchased land by signing a note payable for the full amount Purchased office equipment for cash Received cash for services provided to customers during the month Purchased office supplies on account Paid employees for their first month's salaries How many of these transactions decreased Gotebo's total assets?

One

Dividends received from an investment is classified as a(n) ________ cash flow, and paying dividends on stock issued is classified as a(n) ________ cash flow on the statement of cash flows

Operating, Financing

Pawn Shops Unlimited recorded the following four transactions during April. Which of these transactions would have the same income statement impact in April regardless of whether the company used accrual-basis or cash basis accounting?

Paid $700 for an advertisement that appeared in the April 27 edition of the Las Vegas Sun newspaper.

Which of the following is true concerning temporary and permanent accounts?

Permanent accounts represent activity over the entire life of the company

________ is an investing cash flow and ________ is a financing cash flow, as reported in the statement of cash flows

Purchasing equipment; repaying bonds payable

When a company pays employees' salaries for the current period, how will the basic accounting equation be affected?

Stockholders equity decreases

If a company provides services on account, which of the following is true?

Stockholders equity increases

Limited liability means:

Stockholders of a corporation are not obligated to pay the corporation's debts out of their own pocket

Which of the following is not a correct practice when adjusting net income to net operating cash flows?

Subtract losses on sales of fixed assets

When a company makes an end-of-period adjusting entry, which included a debit to Supplies Expense, the usual credit entry is made to:

Supplies

A company receives a $50,000 deposit from a customer on October 15, but will not provide services until November 20. Which of the following statements is true?

The company records deferred revenue on October 15

The primary difference between accrual-basis and cash-basis accounting is:

The timing of when revenues and expenses are recorded

How many of the following transactions are operating activities? Borrow $50,000 from the bank Purchase $12,000 in supplies Provide services to customers for $27,000 Pay the utility bill of $750 Purchase a delivery truck for $12,000 Receive $25,000 from issuing common stock

Three

How many of the following transactions would increase total assets in the current period? Collect cash from customer prior to providing service Provide services to customer and receive cash at time of service Provide services on account to customer Collect cash from customer for services previously provided on account

Three

How many of the following events would require an expense to be recorded? Ordering office supplies Hiring a receptionist Paying employee's salaries for the current month Receiving but not pay a current utility bill Paying for insurance in advance

Two

How many of the following transactions would increase total liabilities in the current period? Pay for advertising that will not occur until the following period Collect cash from customer prior to providing service Incur, but not pay, utilities cost in the current period Order and paid supplies for the current period

Two

The primary purpose of closing entries is to:

Update the balance of Retained Earnings and prepare revenue, expense, and dividend accounts for the next period's transactions