Chapter 1 Accounting
As of December 31, 2016, Cancon Company has assets of $42,000 and owner's equity of $22,000. What are the liabilities for Cancon Company as of December 31, 2016
$20,000
The Dulce Company has five plants nationwide that cost a total of $200 million. The current fair value of the plants is $600 million. The plants will be recorded and reported as assets at
$200 million
As of June 30, 2016, Little Giantz Company has assets of $100,000 and owner's equity of $60,000. What are the liabilities for Little Giantz Company as of June 30, 2016.
$40,000
George and Ringo met at law school and decide to start a small law practice after graduation. They agree to split revenues and expenses evenly. The most common form of business organization for a business such as this would be a
Partnership
A small neighborhood barber shop that is operated by its owner would likely be organized as a
Proprietorship
A basic assumption of accounting assumes that the dollar is
The common unit of measure for all business transactions
When an owner withdraws cash from the business for personal use, these withdrawals are termed
Drawings
Customers
External users
Internal Revenue Service
External users
Investors
External users
Labor Unions
External users
Securities and Exchange Commission
External users
Suppliers
External users
GAAP stands for
Generally Accepted Accounting Principles
Factory manager
Internal users
Human resource worker
Internal users
Vice-president of finance
Internal users
Owner's equity is best depicted by
Assets-Liabilities
Capital is
an owner's permanent investment in the business
Liabilities
are existing debts and obligations
Buildings
asset
Supplies
asset
If expenses are paid in cash, then
assets will decrease
The historical cost principle requires that when assets are acquired, they be recorded at
cost
Owner's equity is decreases by
expenses
A net loss will result during a time period when
expenses exceed revenues
The accounting process is correctly sequences as
identification, recording, and communication
Notes Payable
liability
Salaries and Wages Payable
liability
Owner's Drawings
owner's equity
Generally accepted accounting principles are
standards that indicate how to report economic events
Accountants refer to an economic event as a
transaction
