midterm (ch. 1-5)

maya co.'s assets increased $122,000 during the year and liabilities decreased by $27,000. As a result equity changed by what?

$149000, increase

at January 31, 2019, the balance in Goebel Inc.'s supplies account was $700. During February. Goebelpurchased supplies of $600 and used supplies of $800. At the end of February, the balance in theSupplies account should be

$500 denit. beginning + purchases - usage = ending

the closing entry process consists of closing

all temporary accounts

Which accounts normally have debit balances?

assets, expenses, dividends

the primary difference between prepaid and accrued expenses is that prepaid expenses have

been paid & accrued expenses have not

what accounts have a normal debit balance?

cash, inventory, equipment, and utilities expense

which of the following accounts have a normal credit balance?

common stock

what is not a liability?

accounts receivable

regions Inc. pays its rent of $48,000 annually on January 1 and makes monthly adjusting entries. If the February 28 monthly adjusting entry for prepaid rent is omitted, which of the following are true?

assets will be overstated by $4000 and net income and stockholders' equity will be overstated by $4000

if a company buys a $700 machine on credit, this transaction will affect the

balance sheet only

accumulated deprecation is a

contra asset account

which statement is true about credit sales made to customers:

credit sales increase accounts receivable

nacron Company borrowed $10,000 from the bank signing a 6%, 3-month note on September1. Principal and interest are payable to the bank on December 1. If the company prepares monthly financial statements, the adjusting entry that the company should make for interest onSeptember 30, would be

debit interest expense, $50 credit interest payable, $50

the balance in the prepaid rent account before adjustment at the end of the year is $15000 and represents three months rent paid on December 1. The adjusting entry required on December 31 is

debit rent expense, $5000 credit prepaid rent, $5000

greese Company purchased office supplies costing $4,000 and debited Supplies for the full amount. At the end of the accounting period, a physical count of office supplies revealed$1,500 still on hand. The appropriate adjusting journal entry to be made at the: end of the period would be

debit supplies expense $2500 credit supplies: $2500

an adjusting journal entry at the end of the period related to unearned revenue would be

decreases liabilities & increases revenues

salt Falls Corporation purchased a one-year insurance policy in January 2022 for $30,000. The insurance policy is in effect from March 2022 through February 2023. If the company has a December fiscal year end, what is the proper year-end adjustment for insurance?

debit insurance expense $25000 credit prepaid insurance $25000

ye Olde Christmas shop signs a three-month note payable to help finance increases in inventory for the Christmas shopping season. The note is signed on October 1 in the amount of $20,000 with annual interest of 6%. What is the adjusting entry to be made on December 31 for the interest expense accrued to that date, if no entries have been made previously for the interest?

debit interest expense $300 credit interest payable $300

an expense

decreases stockholders' equity

which of the following is false regarding depreciation?

depreciation is an expense to ensure an asset is recorded at market value

when an account is written off using the allowance method, the

net accounts receivable will stay the same

if the retained earnings account decreases from the beginning of the year to the end of the year, then

net income is less than dividends

an architecture firm earned $2000 for architecture services provided with the fee to be paid in the future. No entry was made at the time the service was provided. If the fee has not been paid by the end of the accounting period and no adjusting entry is made, this would cause:

revenues to be understated

the normal balance of any account is the

side which increases that account

under the allowance method, when a year-end adjustment is made for uncollectible accounts

total assets decrease

selected account balances on December 31, 2019 are shown below. What is the total amount of property, plant, and equipment that will appear on the balance sheet? Land $ 100,000 Stock Investments $ 150,000 Buildings $ 800,000 Inventory $ 200,000 Equipment $ 450,000 Furniture $ 100,000 Accumulated Depreciation $ 300,000

$1150000. land + buildings + equipment + furniture - accumulated depreciation

based on the account balances below, what is the total of the debit and credit columns of the adjusted trial balance? Service Revenue $ 4,300 Equipment $ 7,400 Cash $ 1,525 Prepaid Insurance $ 1,225 Unearned Revenue $ 5,320 Depreciation Expense $ 640 Wage Expense $ 1,050 Accumulated Depreciation $ 1,280 Common Stock $ 390 Retained Earnings $ 550

$11840. DEAD CERLS, cash + wage expense + equipment + prepaid insurance + depreciation expenses

he information below relates to the end of the current period for a company: Cash $10,000 Rent Expense $6,000 Common Stock $30,000 Revenue $40,000 Supplies $3,000 Equipment $8,000 Cost of Goods Sold $15,000 Salary Expense $7,000

$12000. revenue, COGS, Salary Expense and RentExpense. Result is $40,000 - $15,000 - $7,000 - $6,000 = $12,000 of Net Income

coco, Inc. had $80,000 in sales, $30,000 in cost of good sold, $37,000 in other operating expenses, andpaid dividends of $4,000. What was Coco's net income?

$13000. sales - cogs - operating expenses = net income

at March 1, 2019, Candy Inc. had supplies on hand of $1,500. During the month, Candy purchased supplies of $2,900 and used supplies of $2,800. The March 31 balance sheet should report what balance in the supplies account?

$1600

the Accounts Receivable account has a beginning balance of $52,000 and an ending balance of$69,000. If $42,000 was sold on account during the year, what were the total collections on account?

$25000. beginning + sales on credit - receipts from customers = ending

based on the following data, what is the amount of current assets? Accounts Payable $ 64,000 Accounts Receivable $ 114,000 Cash $ 60,000 Intangible Assets $ 100,000 Inventory $ 138,000 Long Term Investments $ 160,000 Long-term Liabilities $ 200,000 Short-term Investments $ 80,000 Notes Payable (Short-term) $ 56,000 Property, Plant and Equipment $ 1,340,000 Prepaid Insurance $ 2,000

$394000 (accounts receivable, cash, inventory, short-term investments, & prepaid insurance)

if total liabilities decreased by $50,000 and stockholders' equity increased by $10,000 during a period oftime, then total assets must change by what amount during that same period?

$40,000 decrease

in the first month of operations, the total of the debit entries to the Cash account amounted to $1,000 and the total of the credit entries to the Cash account amounted to $600. The Cash account has aa. $600 credit balance

$400 debit balance. beginning + receipts - disbursements = ending

fighting Ducks Sporting Goods, Inc., a December 31 year-end company, pays its employees on Fridays for the 5-day work week that ends that day. Weekly payroll is $10,000. This year December 31 is on a Tuesday. What amount of wage expense will Fighting Ducks record when they make their adjusting entry on December 31?

$4000

in 2019 Grider Corporation had cash receipts of $35,000 and cash disbursements of $20,000. Grider's ending cash balance at December 31, 2019 was $55,000. What was Grider's beginning cash balance?

$40000 (beginning cash + receipts - disbursements = ending) --> x + 35000 - 20000 = 55000, solve for x = 40000

using the aging allowance method, the uncollectible accounts for the year is estimated to be$40,000. If the balance for the Allowance for Doubtful Accounts is a $9,000 debit before adjustment, what is the amount of bad debt expense for the period?

$49000

elston Company compiled the following financial information as of December 31, 2019 (presented below). Elston's stockholders' equity on December 31, 2019 is Service Revenue $ 700,000 Common Stock $ 150,000 Equipment $ 200,000 Operating Expenses $ 625,000 Cash $ 175,000 Dividends $ 50,000 Supplies $ 25,000 Accounts Payable $ 100,000 Accounts Receivable $ 75,000 Retained Earnings 1/1/2019 $ 375,000

$550000. retained earnings at the beginning of the year + common stock + service revenue - operating expenses - dividends

willy co.'s total equity increased $80,000 during fiscal year 2021. If Willy sold $20,000 in common stock and paid $14,000 of dividends, what was Willy's net income for 2021

$74,000

jamal Company began the year with $84,000 in its Common Stock account and a debit balance inRetained Earnings of $36,000. During the year, the company earned net income of $18,000 and declared and paid $6,000 of dividends. In addition, the company sold additional common stock amounting to$22,000. Based on this information, what should the transaction analysis show for the ending total of all stockholders' equity accounts?

$82000

a measure of profitability is the

earnings per share

if a company fails to record estimated bad debt expense

expenses are understated

whats the gross profit equation?

gross profit = net sales - cost of goods sold

stockholders' equity

includes retained earnings and common stock

a debit to an asset account indicates a(n)

increase in the asset

collection of a $600 accounts receivable

increases an asset $600, decreases an asset $600

which of the following describes the classification and normal balance of the Unearned Rent Revenue account?

liability, credit

when the allowance method is used to account for uncollectible accounts, Bad Debts Expense is debited (increased) when

management estimates the amount of uncollectible

a flower shop makes a large sale for $1,000 on November 30. The customer is sent a statement on December 5 and a check is received on December 10. The flower shop follows GAAP and applies the revenue recognition principle. When is the $1,000 recognized as revenue?

november 30

which of the following expressions is incorrect?

operating expenses - cost of good sold = gross profit

goods or services purchased for future use in the business, such as rent, are called

prepaid expenses

which transaction would be reflected in the Investing section of a Statement of Cash Flows?

purchase of equipment for a manufacturing facility

the balance sheet

reports the assets, liabilities, and stockholders' equity at a specific date

expenses are recognized when

resources are used up in the business

the best definition of assets is the

resources belonging to a company that have future benefit to the company

a company spends $20 million dollars for an office building. Over what period should the cost be written off?

the period over which management expects to use the building in their business

which of the following is not a standard sub-total or total in a multi-step income statement

total assets

adjusting entries are

usually required before financial statements are prepared & needed to ensure that the accrual accounting is followed

the revenue recognition principle dictates that revenue should be recognized in the accounting records

when the performance obligation is satisfied