Accounting 160
The governmental agency that supervises the work of the financial accounting standards board (FASB) is known as the:
Securities and exchange commission (SEC)
T/F Cash is the first asset listed on the balance sheet.
True
T/F Credit means the right-hand side of the T-account.
True
T/F Current liabilities include those obligations that a business will pay within one year.
True
T/F Liabilities accounts generally have a credit balance.
True
T/F The balance sheet reports a company's financial position at a particular point in time.
True
T/F The cost principle does not allow increases in asset values.
True
A company reported revenue of $100,000 and a net loss of $12,000. What amount was reported as expenses? $12,000 $100,000 $88,000 $112,000
$112,000
The following account balances are available for the Bentley company as of December 31: cash $30,000; accounts payable $5,600; fees earned $67,000; notes payable $18,000; owners capital $50,000; land $100,000; supplies expense $2,000; rent expense $12,000; supplies $1,000; accounts receivable $3,000. What are total assets? $215,000 $30,000 $186,000 $134,000
$134,000
Which of the following is not one of the four basic financial statements? Income statement Accounting equation Statement of cash flows Balance sheet
Accounting equation
Which of the following is an example of a liability account?
Accounts payable
Sues bookstore Paid $2,200 for supplies. Which of the following will occur?
No effect on the accounting equation
Inventory is an example of a(n):
Asset
Land is an example of a(n):
Asset
Resources a business owns are called:
Assets
The company pays $3400 for the current month utilities. What is the effect on the accounting equation?
Assets decreased $3,400; no effect on liabilities; equity decreases $3,400.
How would the accounting equation be affected if a company obtains a loan for $100,000 from a bank?
Assets increase $100,000; liabilities increase $100,000; no effect on equity.
If owners contribute $50,000 to start a new business what is the effect on the accounting equation?
Assets increase $50,000; no effect on liabilities; equity increases $50,000.
If a company receives an initial investment from an owner to start a business, which of the following currently describes the effect on the accounting equation?
Cash increases; owners equity increases
Assets should originally be recorded at:
Cost
A company pays $2,000 cash on an account to a creditor. Which of the following journal entry is correct to record this transaction?
Debit accounts payable $2,000; credit cash $2,000.
Mendel Co. paid $8,000 cash for land. Which of the following is the correct journal entry to record this transaction?
Debit land $8,000; credit cash $8,000
A company purchases land for $45,000 cash. What is the effect on the accounting equation?
No effect on the accounting equation because assets increase and decrease by the same amount.
T/ F Wages payable is an example of an expense.
False
T/F Asset accounts are increased with a credit.
False
T/F Debiting a liability account increase it.
False
T/F Financial statements are only prepared at the end of the year.
False
T/F On a balance sheet assets are listed in alphabetical order.
False
T/F The correct order to prepare the financial statement is: 1) balance sheet 2) income statement 3) statement of cash flows 4) statement of owners equity
False
T/F When a company buy supplies, expenses increase.
False
T/F The difference between assets and liabilities is called profit.
False
Which one of the following accounts normally has a credit balance?
Fees earned
The primary responsibility for setting the rules of accounting rests with the:
Financial accounting standards board (FASB)
The rules of accounting are known as:
Generally accepted accounting principles (GAAP)
A credit is used to record a(n):
Increase in a liability account
A company purchased $800 worth of supplies on an account. What is one effect on the accounting equation?
Increase of $800 to assets.
Notes payable is an example of a(n):
Liability
The income statement reports:
Net income or loss for the period
Which financial statement links together the income statement and the balance sheet?
Statement of owners equity
An example of an asset is:
Supplies
Which of the following statements is false?
The normal balance in owners equity is a debit
Which of the following is not a required Element of the title on a financial statement?
The preparer's name
T/F Accounts with "payable" in the title always represent liabilities.
True
T/F All balance sheet accounts start the period with the ending balances from the prior period.
True
T/F An increase in assets is shown on the left side of the T-account which is referred to as debit?
True
The following information is reported for Manco company For the month of March: salaries expense $45,000; utilities expense $6,500; rent expense $10,000; revenue $83,000. Determine net income. $(21,500) $144,500 $73,000 $21,500
$21,500
On December 31 of the current year, a company reported the following items on its balance sheet: cash $10,500; accounts receivable $5200; supplies $2300; land $102,400; accounts payable $12,000; notes payable $56,000. What amount should be rich reported as owners equity? $108,400 $188,400 $120,400 $52,400
$52,400
If cash is debited for $200 on 01/02 of the current year, credited for $75 on 01/15 of the current year, and debited for $400 on 01/30 of the current year, what is the ending balance in cash as it would appear on the balance sheet as of 01/31 for the current year? Assume there is no beginning balance in the cash account as of 01/01 of the current year. $1,025 $525 $875 $150
$525
A company reported assets of $12,000 and liabilities of $2,500, what amount would be reported for owners equity? $12,000 $9,500 $14,500 $2,000
$9,500
What could be the description for a debt to cash for $9,500?
Selling old equipment for $9,500
