Ch. 1 Inro To Accounting Connect Assignment

The organization that is responsible for issuing International Financial Reporting Standards is the:

IASB Correct

Identify each of the following items as assets, liabilities, or equity from the drop down provided.

lalaea

The Sarbanes-Oxley Act requires the following?

multiple choice Documentation and verification of internal controls. Correct

The majority of accounting opportunities are in _____ accounting.

private

During its first year of operations, Mario Lupo formed Lupo Company as a corporation and personally invested $15,000 in the business in exchange for common stock. Lupo Company also paid dividends of $2,000. The company earned $35,000 of revenues and incurred $23,000 of expenses. At the end of the year, the company's equity totaled:

$25,000 Correct

If equity is $30,000 and liabilities are $19,000, then assets must equal:

$49,000 Correct

The fraud triangle asserts that the following three factors must exist for a person to commit fraud. Identify the fraud risk factor in each of the following situations.

1.Company computers are not password protected.Opportunityselected answer correct2.Managers are expected to grow business or be fired.Pressureselected answer correct3.There is no supervision of employees handling inventory.Opportunityselected answer correct4.A worker sees other employees regularly take inventory for personal use.Rationalizationselected answer correct5.Officers are told to show rising income or risk layoffs.Pressureselected answer correct6.Payroll manager feels she is greatly underpaid.Rationalizationselected answer correct

Identify each of the following terms or phrases as an accounting (a) principle, (b) assumption, or (c) constraint.

1.Conservatismconstraintselected answer correct2.Expense recognitionprincipleselected answer correct3.Monetary unitassumptionselected answer correct4.Going concernassumptionselected answer correct

The company completed consulting work for a client and immediately collected $6,600 cash earned. The company completed commission work for a client and sent a bill for $5,100 to be received within 30 days. The company paid an assistant $1,950 cash as wages for the period. The company collected $2,550 cash as a partial payment for the amount owed by the client in transaction b. The company paid $920 cash for this period's cleaning services. Required:Enter the impact of each transaction on individual items of the accounting equation. (Enter decreases to account balances with a minus sign.)

Assets=Liabilities+EquityCash+Accounts Receivable=Accounts Payable+Common Stock−Dividends+Revenue−Expensesa.$6,600selected answer correct+not attempted=not attempted+not attempted−not attempted+not attempted−not attemptedb.not attempted+$5,100selected answer correct=not attempted+not attempted−not attempted+not attempted−not attemptedBal.6,600+5,100not attempted=0+0−0+0−0c.not attempted+not attempted=not attempted+not attempted−not attempted+not attempted−not attemptedBal.6,600+5,100=0+0−0+0−0d.not attempted+not attempted=not attempted+not attempted−not attempted+not attempted−not attemptedBal.6,600+5,100=0+0−0+0−0e.not attempted+not attempted=not attempted+not attempted−not attempted+not attempted−920selected answer correctBal.6,600+5,100=0+0−0+0−920

The following transactions were completed by the company. The owner invested $18,200 cash in the company in exchange for its common stock. The company purchased supplies for $1,300 cash. The owner invested $11,600 of equipment in the company in exchange for more common stock. The company purchased $360 of additional supplies on credit. The company purchased land for $10,600 cash.

Assets=Liabilities+EquityCash+Supplies+Equipment+Land=Accounts Payable+Common Stock−Dividends+Revenue−Expensesa.$18,200selected answer correct+not attempted+not attempted+not attempted=not attempted+not attempted−not attempted+not attempted−not attemptedb.not attempted+$1,300selected answer correct+not attempted+not attempted=not attempted+not attempted−not attempted+not attempted−not attemptedBal.18,200+1,300not attempted+0+0not attempted=0not attempted+0−0+0−0c.not attempted+not attempted+$11,600selected answer correct+not attempted=+11,600selected answer correct−not attempted+not attempted−not attemptedBal.18,200+1,300+11,600+0not attempted=0not attempted+11,600−0+0−0d.not attempted+not attempted+not attempted+not attempted=$360selected answer correct+not attempted−not attempted+not attempted−not attemptedBal.18,200+1,300+11,600+0not attempted=360+11,600−0+0−0e.not attempted+not attempted+not attempted+$10,600selected answer correct=not attempted+not attempted−not attempted+not attempted−not attemptedBal.18,200+1,300+11,600+10,600=360+11,600−0+0−0

a. Total assets of Charter Company equal $770,000 and its equity is $455,000. What is the amount of its liabilities?b. Total assets of Martin Marine equal $570,000 and its liabilities and equity amounts are equal to each other. What is the amount of its liabilities? What is the amount of its equity?

Assets=Liabilities+Equitya.$770,000=$315,000selected answer correct+$455,000b.$570,000=$285,000selected answer correct+$285,000selected answer correct

Complete the following table with either a yes or no regarding the attributes of a proprietorship, partnership, corporation, and limited liability company (LLC).

Attribute PresentProprietorshipPartnershipCorporationLLC1.Limited liabilityNoselected answer correctNoselected answer correctYesselected answer correctYesselected answer correct2.Legal entityNoselected answer correctNoselected answer correctYesselected answer correctYesselected answer correct3.Unlimited lifeNoselected answer correctNoselected answer correctYesselected answer correctYesselected answer correct

Why is accounting important?

Businesses, regulatory agencies, and the general public use accounting information

Accounting certifications includes:

CPA

Identify which items belong on the statement of cash flows.

Cash flows from investing, operating and financing activities Correct

Identify which items belong on the balance sheet.

Cash, accounts receivable, and common stock Correct

1. Use the accounting equation to compute the missing financial statement amounts. 2. Use the expanded accounting equation to compute the missing financial statement amounts.

CompanyAssets=Liabilities+Equity1$80,000=$37,500selected answer correct+$42,5002$102,500selected answer correct=$27,500+$75,0003$95,000=$25,000+$70,000selected answer correct CompanyAssets=Liabilities+Common Stock−Dividends+Revenues−Expenses1$50,000=$18,500+$25,000−$0+$17,000selected answer correct−$10,5002$89,500=$34,500+$49,000−$2,500selected answer correct+$29,000−$20,500

Identify which items belong on the statement of retained earnings.

Dividends, beginning retained earnings, ending retained earnings Correct

The organization that is primarily responsible for developing GAAP for use by all U.S. companies is the:

FASB Correct

Which of the following is a proper reflection of the sequence of steps when deciding on the preferred course of action in making an ethical decision?

Identify ethical concerns; Analyze options; Make ethical decision. Correct

The four basic financial statements are:

Income Statement, Statement of retained earnings, Balance sheet, and Statement of cash flows. Correct

Identify the correct principle for each of the following activities using the drop-down list.

Item #1A company records the expenses incurred to generate the revenue reported.Expense recognition principleselected answer correctItem #2Revenue is recognized when goods are provided to the customer at the amount expected to be received.Revenue recognition principleselected answer correctItem #3A company reports the details behind financial statements that would impact user's decisions.Full-disclosure principleselected answer correctItem #4Accounting information is based on actual cost.Measurement principleselected answer correct

Select the correct term for the following types of users:

Item #1CustomersExternal Information Userselected answer correctItem #2Board of DirectorsExternal Information Userselected answer correctItem #3Payroll ClerkInternal Information Userselected answer correctItem #4Marketing ManagerInternal Information Userselected answer correctItem #5SuppliersExternal Information Userselected answer correctItem #6Labor UnionExternal Information User

_____ includes opportunities in general accounting, cost accounting and internal auditing.

Managerial accounting Correct

Identify which accounting principle or assumption best describes each of the following practices: 1. Mike Derr owns both Sailing Passions and Dockside Digs. In preparing financial statements for Dockside Digs, Mike makes sure that the expense transactions of Sailing Passions are kept separate from Dockside Digs's transactions and financial statements. 2. Cruz Consulting performs services for a client. Cruz records revenue this period even though the client is not billed until next period. 3. Stark Company's accounting system maintains the equipment account as if the business will continue operating and not close.

Mike Derr owns both Sailing Passions and Dockside Digs. In preparing financial statements for Dockside Digs, Mike makes sure that the expense transactions of Sailing Passions are kept separate from Dockside Digs's transactions and financial statements. Identify which accounting principle or assumption best describes the above practiceBusiness entity assumption Cruz Consulting performs services for a client. Cruz records revenue this period even though the client is not billed until next period. Identify which accounting principle or assumption best describes the above practiceRevenue recognition principle Stark Company's accounting system maintains the equipment account as if the business will continue operating and not close. Identify which accounting principle or assumption best describes the above practiceGoing-concern assumption

Identify the type of activity by choosing the best answer for each question.Select each item listed below as being an identifying, recording, or a communicating activity.

Preparing and entering a list of checks issued.Recordingselected answer correctItem #2Using a cash register to enter sales.Recordingselected answer correctItem #3Entering a list of the sales invoices, including the prices and quantities, for the company's recordkeeper.Identifyingselected answer correctItem #4Interpreting information from financial reports.Communicatingselected answer correctItem #5Preparing financial statements for creditors.Communicating

Identify which items belong on the income statement.

Revenue, expenses and net income Correct

Match the term and the definition.

The recording of transactions and events only, either manually or electronically.Recordkeepingselected answer correct2.An information and measurement system that identifies, records, and communicates relevant, reliable, and comparable information about an organization's business activities.Accounting

Identify the following users as either external users (E) or internal users (I).

a.ShareholdersEselected answer correctb.DirectorsEselected answer correctc.External (independent) auditorsEselected answer correctd.Nonexecutive employeesEselected answer correcte.Production managersIselected answer correctf.Labor unionsEselected answer correctg.RegulatorsEselected answer correcth.Distribution managersIselected answer correcti.Internal revenue service (IRS)Eselected answer correctj.Utility boardsEselected answer correctk.VotersEselected answer correctl.LegislatorsEselected answer correct

Indicate in which financial statement each item would most likely appear, by selecting income statement (I), balance sheet (B), or statement of cash flows (CF) from the drop down provided.

b b i b b cf i b

Upon her promotion to manager at the regional public accounting firm that has employed her for the past five years, Gail Mahaffey moves to the firm's Chicago office. After welcoming her to the office on her first day, the partner managing the Chicago office shares some great news. The firm just learned of its successful bid to audit Morrison's reports. Morrison's business has been expanding and the company is expected to become an important client of the firm. The partner then congratulates Gail; he has decided to assign her to head up the team that will audit Morrison. Thrilled by the exciting news, Gail leaves the office, eager to meet the rest of the team. As she walks to the meeting room, she considers the fact that she inherited a share of Morrison's stock last year under the terms of her grandfather's will. She recalls that the stock is currently trading at $15 per share. Assuming that Gail wants to make an ethical decision in this situation, she will:

decline the assignment; even though she only owns a single share of stock, that direct investment in the stock of Morrison would cast doubt on decisions that she makes during the audit. Correct

Identify each of the following items as revenues, expenses, or dividends from the drop down provided.Identify each of the following items as revenues, expenses, or dividends from the drop down provided.

e e e r e e d e

Identify the correct assumption for each of the following activities using the drop-down list.

em #1Presumes that the business will continue operating in the future.Going-concern assumptionselected answer correctItem #2A business is accounted for separately from other business entities and its owner.Business entity assumptionselected answer correctItem #3Transactions and events are expressed in units of money.Monetary unit assumptionselected answer correctItem #4The life of the company can be divided into specific time periods.Time period assumption