Exam 1 Review: Accounting

A balance sheet lists :

The types and amounts of assets, liabilities, and equity of a business as of a specific date.

Identify the account below that is classified as a liability account:

Accounts Payable

If a company is considering the purchase of a parcel of land that was acquired by the seller for $85,000, is offered for sale at $150,000, is assessed for tax purposes at $95,000, is recognized by the purchaser as easily being worth $140,000, and is purchased for $137,000, the land should be recorded in the purchaser's books at

$137,000.

A corporation is:

A business legally separate from its owners.

A debit is used to record an increase in all of the following accounts except

Accounts Payable

An account used to record the owner's investments in a business is called a(n)

Capital account.

A company's list of accounts and the identification numbers assigned to eacłh account is called a:

Chart of accounts.

The right side of a T-account is a(n):

Credit.

Ralph Pine Consulting received its telephone bill in the amount of $300, and immediately paid it. Pine's general journal entry to record this transaction will include a

Debit to Telephone Expense for $300.

The basic financial statements include all of the following except

Statement of Changes in Assets.

Revenue is properly recognized

Upon completion of the sale or when services have been performed and the business obtains the right to collect the sales price

On May 31 of the current year, the assets and liabilities of Riser, Inc. are as follows: Cash $20,500; Accounts Receivable, $7,250; Supplies, $650; Equipment, $12,000; Accounts Payable, $9,300. What is the amount of owner's equity as of May 31 of the current year?

$31,100.

If equity is $300,000 and liabilities are $192,000, then assets equal:

$492,000.

On May 31, the Cash account of Bottle's R US had a normal balance of $5,000. During May, the account was debited for a total of $12,200 and credited for a total of $11,500. What was the balance in the Cash account at the beginning of May?

A $5,700 debit balance.

.A business uses a credit to record:

A decrease in an asset account.

.A business's record of the increases and decreases in a specific asset, liability equity, revenue, or expense is known as a(n):

Account.

Prepaid accounts (also called prepaid expenses) are generally:

Assets that represent prepayments of future expenses

The accounting concept that requires every business to be accounted for separately from other business entities, including its owner or owners is known as the:

Business entity assumption.

Golddigger Services Inc. provides services to clients. On May 1, a client prepaid Golddigger Services $60,000 for 6-months services in advance. Golddigger Services' general journal entry to record this transaction will include a

Credit to Unearned Management Fees for $60,000.

Paul's Landscaping paid $500 on account for supplies purchased in the prior month. Which of the following general journal entries will Paul's Landscaping make to record this transaction?

Debit Accounts payable, $500; credit Cash, $500

Richard Redden contributed $70,000 in cash and land worth $130,000 to open a new business, RR Consulting. Which of the following general journal entries will RR Consulting make to record this transaction?

Debit Cash $70,000; debit Land $130,000, credit Redden, Capital, $200,000

All of the following are true regarding ethics except :

Ethics do not affect the operations or outcome of a company

Net Income:

Is the excess of revenues over expenses.

A debit:

Is the left-hand side of a T-account.

The record of all accounts and their balances used by a business is called a:

Ledger (or General Ledger)

Creditors' claims on the assets of a company are called:

Liabilities

The area of accounting aimed at serving the decision making needs of intermal users is:

Managerial accounting

J. Brown Consulting paid S2.500 cash for a 5-month insurance poliey which begins on December 1. Given the choices below, determine the general journal entry that J. Brown Consulting will make to record the cash payment. Assume the company's policy is to initially record prepaid and uncarned items in balance sheet accounts

Prepaid Insurance 2.500 Cash 2.500

The primary objective of financial accounting is to:

Provide accounting information that serves external users.

External users of accounting information include all of the following except

Purchasing managers.

Wiley Consulting purchased $7.000 worth of the company's policy is to initially record following general journal entries will Wiley Consulting supplies and paid cash immediately. Which of the make to record this transaction? Assume prepaid and unearned items in balance sheet account

Supplies 7,000 Cash 7,000

An account balance is:

The difference between the total debits and total credits for an account including the beginning balance

Identify the account below that is classified as a liability in a company's chart of accounts

Unearned Revenue

credit is used to record an increase in all of the following accounts except

Wages Expense

Distributions of cash or other resources by a business to its owners are called:

Withdrawals