accounting quiz 1-3
A company pays its employees $2,100 each Friday, which amounts to $420 per day for the 5-day workweek that begins on Monday. If the monthly accounting period ends on Thursday and the employees worked through Thursday, the amount of salaries earned but unpaid at end of the accounting period is:
(4 days * $420/ day =$ 1,680)
If equity is $399,000 and liabilities are $184,000, then assets equal
583,000 (399,000+184,000)
the accounting process begins with
Analysis of business transactions and source documents
If a company receives $11,100 from the owner to establish a proprietorship, the effect on the accounting equation would be
Assets increase 11,100 and equity increases 11,100
On May 31 of the current year, the assets and liabilities of Riser, Inc, are as follows: Cash 12,300; Accounts Receivable, 6,750; Supplies, 750; Equipment, 11,300; Accounts Payable, 8,650. What is the amount of owner's equity as of May 31 of the current year?
Cash+Accounts Receivable+Supplies+Equipment-Accounts Payable = 22,450
If a company uses $1,340 of its cash to purchase supplies, the effect on the accounting equation would be
One asset increases 1,340 and another asset decreases 1,340, causing no effect
Financial accounting is the area of accounting aimed at serving external users by providing them with general-purpose financial statements
True
GAAP aims to make information relevant, reliable, and comparable
True
Revenue is properly recognized
When goods or services are provided to customers and at the amount expected to be received from the customer
If a company purchases equipment costing $4,300 on credit, the effect on the accounting equation would be
assets increase 4,300 and liabilities increase 4,300
Saddleback Company paid off $37,000 of its accounts payable in cash. What would be the effects of this transaction on the accounting equation?
assets, 37,000 decrease; liabilities, 37,000 decrease
To include the personal assets and transactions of a business's owner in the records and reports of the business would be in conflict with the
business entity assumption: a business is accounted for separately from other business entities, including its owner
GreenLawn Co. provides landscaping services to clients. On May 1, a customer paid GreenLawn $84,000 for 6-months services in advance. GreenLawn's general journal entry to record this transaction will include a
credit to unearned revenue for 84,000
A law firm billed a client $2,900 for work performed in the current month. Which of the following general journal entries will the firm make to record this transaction?
debit accounts receivable, 2,900; credit Legal fees revenue, 2,900
Adriana Graphic Design receives $2,600 from a client billed in a previous month for services provided. Which of the following general journal entries will Adriana Graphic Design make to record this transaction?
debit cash 2,600; credit accounts receivable 2,600
Victor Cruz contributed $80,000 in cash and land worth $150,000 to open a new business, VC Consulting. Which of the following general journal entries will VC Consulting make to record this transaction?
debit cash 80,000; debit land 150,000; credit Cruz, Capital 230,000
Ted Catering received $940 cash in advance from a customer for catering services to be provided in three months. Determine the general journal entry that Ted Catering will make to record the cash receipt. Assume the company's policy is to initially record prepaid and unearned items in balance sheet accounts.
debit cash 940; credit unearned catering revenue 940
A law firm collected $3,200 in advance for work to be performed in three months. Which of the following general journal entries will the firm make to record this transaction?
debit cash, 3,200; credit Unearned Legal fees revenue, 3,200
A law firm collected $3,500 on account for work performed in the previous month. Which of the following general journal entries will the firm make to record this collection of cash?
debit cash, 3,500; credit accounts receivable, 3,500
Green Cleaning purchased $540 of office supplies on credit. The company's policy is to initially record prepaid and unearned items in balance sheet accounts. Which of the following general journal entries will Green Cleaning make to record this transaction?
debit office supplies 540; credit accounts payable 540
Edison Consulting received a $430 utilities bill and immediately paid it. Edison's general journal entry to record this transaction will include a
debit utilities expense 430
Jose Consulting paid $700 cash for utilities for the current month. Determine the general journal entry that Jose Consulting will make to record this transaction.
debit utilities expense 700; credit cash 700
Unearned Revenues refer to a
liability that is settled in the future when a company delivers its products or services
