College Accounting Exam #1 Flash Cards to Practice

0/10 points awarded Item Scored Show correct answersItem 16Item 16 0 of 10 points awarded Item Scored During October, a firm had the following transactions involving revenue and expenses. Paid $1,050 for rent for October Provided services for $2,450 in cash Paid $190 for the October telephone service Provided services for $1,600 on credit Paid salaries of $1,525 to employees Paid $290 for the monthly office cleaning service Calculate the net income or net loss for the period?

$2,450 + $1,600 - $1,050 - $190 - $1,525 - $290 = $995 Net Income

On a statement of owner's equity, beginning capital is $50,000, Net Income for the year is $21,000 and Drawing for the year is $8,000, the ending capital amount would be:

$63,000

Required information At the end of the first month of operations for SloMo Delivery Service, the business had the following accounts: Accounts Receivable, $1,150; Prepaid Insurance, $450; Equipment, $35,700 and Cash, $40,400. On the same date, SloMo owed the following creditors: Simpson Supply Company, $11,500; Allen Office Equipment, $9,250. The total assets for the SloMo Delivery Service are:

$77,700

If during the year total assets increase by $72,000 and total liabilities decrease by $14,500, by how much did owner's equity increase/decrease?

$86,500 increase

Which of the following accounts have normal credit balances?

Fees Income and John Smith, Capital

If a business issues a check for $100 to purchase office supplies, What is the effect on the accounting equation?

Total Assets will remain the same

The rent paid for future months is a(n):

asset.

When the owner withdraws cash for personal use,

assets decrease and owner's equity decreases.

The owner's investment or equity in a business is called:

capital.

Owners are not personally responsible for the debts of the business if the form of business organization is a

corporation

The form of a business organization that is not affected by the withdrawal or death of an owner and can continue indefinitely is the

corporation.

A firm paid cash to apply against a debt. To record this transaction, the accountant would:

debit Accounts Payable and credit Cash.

Which of the following transactions increase owner's equity?

earning revenue

The normal balance of an account is the:

increase side of the account.

Debits are used to record:

increases in assets.

The Income Statement shows:

the amount of net income or net loss.