Balance Sheet
The amount reported on the balance sheet for Property, Plant and Equipment is the company's estimate of the fair market value as of the balance sheet date.
False
The third line of the balance sheet at the end of the year should begin with "For the Year Ended".
False
The total amount reported for stockholders' equity is the approximate fair value or net worth of the corporation as of the balance sheet date.
False
On December 1, ABC Co. hired Juanita Perez to begin working on January 2 at a monthly salary of $4,000. ABC's balance sheet of December 31 will show a liability of
No liability
When an owner draws $5,000 from a sole proprietorship or when a corporation declares and pays a $5,000 dividend, the asset Cash decreases by $5,000. What is the other effect on the balance sheet?
Owner's Equity decreases
The balance sheet heading will specify a
Point in Time
Which of the following is an asset account?
Prepaid Insurance
Another name for the balance sheet is:
Statement of Financial Position
ABC Co. has current assets of $50,000 and total assets of $150,000. ABC has current liabilities of $30,000 and total liabilities of $80,000. What is the amount of ABC's owner's equity?
$70,000
ABC Co. performed services for Client Kay in December and billed Kay $4,000 with terms of net 30 days. ABC follows the accrual basis of accounting. In January ABC received the $4,000 from Kay. In January ABC will debit Cash, since cash was received. What account should ABC credit in the January entry?
Accounts Receivable
Which of the following is a contra account?
Accumulated Depreciation
What is the normal balance for contra asset accounts?
Credit
What is the normal balance for liability accounts?
Credit
What is the normal balance for stockholders' equity and owner's equity accounts?
Credit
Notes Payable could not appear as a line on the balance sheet in which classification?
Current Assets
What is the normal balance for an asset account?
Debit
ABC Co. follows the accrual basis of accounting and performs a service on account (on credit) in December. The service was billed at the agreed upon amount of $3,500. ABC Co. debited Accounts Receivable for $3,500 and credited Service Revenue for $3,500. The effect of this entry on the balance sheet of ABC is to increase assets by $3,500 and to
Increase owner's equity by $3,500
Which of the following would not be a current asset?
Land
Deferred credits will appear on the balance sheet with the
Liabilities
Which of the following is a category or element of the balance sheet?
Liabilities
ABC Co. incurs cleanup expense of $500 on December 30. The supplier's invoice states that the $500 is due by January 10 and ABC will pay the invoice on January 9. ABC follows the accrual basis of accounting and its accounting year ends on December 31. What is the effect of the cleanup service on the December balance sheet of ABC?
Liabilities increased
The book value of a corporation is the total amount of stockholders' equity reported on the balance sheet.
True
Which of the following would normally be a current liability?
Unearned Revenue
Client Jay pays ABC Co. $1,000 in December for ABC to perform services for Jay in 45 days. ABC uses the accrual basis of accounting. In December ABC will debit Cash for $1,000. What will be the other account involved in the December accounting entry prepared by ABC (and what type of account is it)?
Unearned Revenues (Liability)