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