Midterm 1 Accounting

On December 1 of the current year prepaid rent was debited $5,400 for three months of rent, to cover the period, December 1 to February 28.The amount of the adjusting entry n December 31 is:

$1,800 (How to do: $5400/3=1800)

What is net income?

$42,000

At the end of the month, the total liabilities would be...

$68,000

See the chart!!!

$91,300

View the document Attached!!!

*** $11,600! ***

View Test

*** View Test *** Answer: $37,500

Which of the following is not a BUS transaction?

A company borrows money from the bank. NOT a company fired 10 percent of the employees due to lackluster sales.

Which accounts are increased by debits?

Accounts receivable and utilities expense!

When services are performed on account:

Accounts receivable is increase!...

Which financial statement answers the following question: What is the company's financial position?

Balance Sheet

A company reports the purchase of equipment for 1,000,000 in cash. ON a statement of cash flows, this is an example of:

Cash Outflow from investing activities

Jaye company purchased a new building by signing a note for $20,000. The entry to record the transaction is:

Debit Building 20,000 and credit notes payable 20,000

A business $1,900 on account. The journal entry would:

Debit accounts payable;e $1,900 and credit cash for $1,900.

A doctor performed surgery in March and did not receive cash from the patient until July. Under accrual basis accounting, the doctor recognizes revenue.

In March

If adjusting entries are not prepared, which financial statements are misstated?

Income Statement, Balance Sheet, and Statement of Retained Earnings!!!!!!!!

The correct data flow from one financial statement to the next is:

Income statement, statement of retained earnings, balance sheet, statement of cash flows

Advantages of a corporation include:

Limited liability of the SH's for the corporation's debts.

A chart of accounts:

Lists all of an organization's accounts and account numbers.

An account will have a debit balance if:

The amount of the debits exceeds the amount of the credits

The expense recognition principle (aka matching principle) requires:

The recognition of expenses in the same period as the related revenues are earned.

After the closing entries are prepared and posted: other options: 1. all liability accounts will have a 0 balance 2. the RE act. will have the correct balance 3. the temporary accts. will have debit balances 4. all asset accounts will have a zero balance

The retained earnings account will have the correct ending balance!

IN 1960, Johnson Company purchased a building for $100,000. In 2013, a real estate professional says the building has a fair value of $1,000,000. IN 2013, a similar building down the street recently sold for 900,000. What value is reported for the building on the balance sheet at December 31, 2013?

answer on paper

Which of the following entities pays federal income taxes?

corporation

The book value of a plant asset is the...

cost of the asset less the accumulated depreciation

Which of the following must be added to the beginning retained earnings to compute ending retained earnings?

net income

The proper order for the accounting process is:

transaction occurs, transaction analyzed, journalizing, and posting!

All of the following are true statements about the entity assumption EXCEPT for:

the entity assumption

View #11 on the

*** view the test ***69,000

If a trial balance worksheet is used to prepare the financial statements, which columns are used to prepare the financial statements?

Adjusted trial balance columns

View worksheet difficult to see!!!!!!

Answer: $245, 000

The ending balance of cash is reported on the:

Balance Sheet and Statement of Cash Flows ONLY

Which financial statement is dated at the moment in time when the accounting period ends?

Balance Sheet!!!

The closing entry for the salaries expense account would include a debit to:

Debit-retained earnings and credit-salaries expense

A normal balance on an account:

Falls on the side where increases are recorded

What is an accounts payable?

It is a liability for goods or services purchased on credit and supported by the credit standing of the purchaser.

Accounting

It's often called the language of business, processes data into reports and communicates the data to decision makers, measures business activities.

Accounting transactions are initially recorded in the:

Journal

Every journal entry:

Must debit at least one account and credit at least one account.

Revenues were $150,000, expenses were $140,000 and cash dividends declared and paid were $5000. What was the net income and the change in retained earnings for the period?

Net income was $10,000, the change in retained earnings was $5,000.

A company's main source of cash should be:

Operating Activities

Which accounts are used in the adjusting entry to record salaries owed to employees, but not paid until the next accounting period?

Salaries expense and salaries payable

An important rule to remember when working with T accounts is:

To credit an account means to enter an amount Lon the right-hand side of the T-account.

Which transaction decreases SH's equity?

Tota; expenses for the period exceed total revenues for the period.

prepaid expenses will:

become expenses when their future benefits expire

On May 1, a business rendered legal services to a client and billed the client $2,200. The client promised to pay the business in one week. What journal entry does the business record on May 1?

debit accounts receivable 2,200 and credit service revenue 2,200

_________ is the allocation of the cost of an asset over the asset's useful life

depreciation

Notes payable, accounts payable, taxes payable and salaries payable are all examples of...

liabilities

When total expenses exceed total revenues, the result is:

net loss