Accouting 201
Government agency that can mandate accounting rules.
sec
In the first month of operations for Pendleton Industries, the total of the debit entries to the cash account amounted to $33,000 ($13,000 investment by the owner and revenues of $20,000). The total of the credit entries to the cash account amounted to $21,000 (purchase of equipment $8,000 and payment of expenses $13,000). At the end of the month, the cash account has a(n)
$12,000 debit balance. $33,000 - $21,000 = $12,000 debit
Bertoli Company showed the following balances at the end of its first year:What did Bertoli Company show as total credits on its trial balance?
$46,000 $4,000 + $7,000 + $3,000 + $32,000 = $46,000(Accts. pay. + Notes pay. + Owner's cap. + Rev. = Tot. credits)
On June 1, 2020, Barcelona Inc. reported a cash balance of $11,000. During June, Barcelona made deposits of $3,000 and made disbursements totalling $9,000. What is the cash balance at the end of June
$5,000 debit balance $11,000 + $3,000 - $9,000 = $5,000(Beg. dr. bal. + Deposits - Disb. = End. dr. bal.)
On June 1, 2020, Barcelona Inc. reported a cash balance of $11,000. During June, Barcelona made deposits of $3,000 and made disbursements totalling $9,000. What is the cash balance at the end of June?
$5,000 debt balance $11,000 + $3,000 - $9,000 = $5,000(Beg. dr. bal. + Deposits - Disb. = End. dr. bal.)
Qwik Company showed the following balances at the end of its first year:What did Qwik Company show as total credits on its trial balance? $52,400 $61,500 $62,900 $70,900
$61,500 $5,800 + $9,400 + $2,300 + $44,000 = $61,500(Accts. pay. + Notes pay. + Owner's cap. + Rev. = Tot. credits)
If total liabilities decreased by $40,000 and owner's equity increased by $30,000 during a period of time, then total assets must change by what amount and direction during that same period?
10,000 DECREASE $30,000 - $40,000 = $10,000 decrease(Incr. in owner's equity + decr. in liabl. = decr. in assets)
If total liabilities decreased by $40,000 and owner's equity increased by $30,000 during a period of time, then total assets must change by what amount and direction during that same period? $30,000 - $40,000 = $10,000 decrease(Incr. in owner's equity + decr. in liabl. = decr. in assets)
10,000 decrease
Luis Consulting started the year with total assets of $60,000 and total liabilities of $17,000. During the year, the business recorded $48,000 in consulting revenues and $36,000 in expenses. Luis made an additional investment of $8,000 and withdrew cash of $9,000 during the year. The net income reported by Luis Consulting for the year was: $48,000 - $36,000 = $12,000(Rev. - Exp. = Net inc.)
12,000
If total liabilities increased by $9,000 during a period of time and owner's equity decreased by $25,000 during the same period, then the amount and direction (increase or decrease) of the period's change in total assets is a(n)
16,000 decrease
As of December 31, 2020, Cancon Company has assets of $42,000 and owner's equity of $22,000. What are the liabilities for Cancon Company as of December 31, 2020?
20,000
As of December 31, 2020, Cancon Company has assets of $42,000 and owner's equity of $22,000. What are the liabilities for Cancon Company as of December 31, 2020? $42,000 - $22,000 = $20,000(Asset tot. - Owner's equity tot. = Liabl. tot.)
20,000
As of December 31, 2020, Cancon Company has assets of $42,000 and owner's equity of $22,000. What are the liabilities for Cancon Company as of December 31, 2020?
20,000 $42,000 - $22,000 = $20,000(Asset tot. - Owner's equity tot. = Liabl. tot.)
The Dulce Company has five plants nationwide that cost a total of $200 million. The current fair value of the plants is $600 million. The plants will be recorded and reported as assets at
200 million
Foxes Service Shop started the year with total assets of $320,000 and total liabilities of $240,000. During the year, the business recorded $630,000 in revenues, $450,000 in expenses, and owner drawings of $60,000.Owner's equity at the end of the year was ($320,000 - $240,000) + ($630,000 - $450,000) - $60,000 = $200,000[(Beg. assets - Beg. liabl. = Beg. owner's equity); (Beg. owner's equity + (Rev. - Exp.) - Draws. = End. owner's equity)]
200,000
Mirah Company compiled the following financial information as of December 31, 2020:Mirah's owner's equity on December 31, 2020 is $140,000 + ($340,000 - $240,000) - $20,000 = $220,000[Beg. owner's equity + (Rev. - Exp.) - Draws. = End. owner's equity]
220,000
Luis Consulting started the year with total assets of $60,000 and total liabilities of $17,000. During the year, the business recorded $48,000 in consulting revenues and $36,000 in expenses. Luis made an additional investment of $8,000 and withdrew cash of $9,000 during the year. The owner's equity at the end of the year was
54,000
In the first month of operations, the total of the debit entries to the cash account amounted to $1,400 and the total of the credit entries to the cash account amounted to $800. The cash account has a(n)
600 debit balance
At January 1, 2020, Croc Industries reported owner's capital of $140,000. During 2020, Croc had a net loss of $30,000 and owner drawings of $15,000. At December 31, 2020, the amount of owner's capital is
95,000
Which of the following is not true of the terms debit and credit?
A journal is not useful for
A trial balance would only help in detecting which one of the following errors?
A transposition error when transferring the debit side of journal entry to the ledger
The basic accounting equation may be expressed as Assets = Equities. Assets - Liabilities = Owner's Equity. Assets = Liabilities + Owner's Equity. All of these answer choices are correct..
All of these answer choices are correct..
If expenses are paid in cash, then
Assets decrease
All of the financial statements are for a period of time except the
Balance sheet
A business whose owners enjoy limited liability is a
Corporation
Which of the following rules is incorrect? Credits decrease the owner's drawings account. Debits increase the owner's capital account. Credits increase revenue accounts. Debits decrease liability accounts.
Debits increase the owner's capital account.
When an owner withdraws cash or other assets from a business for personal use, these withdrawals are termed
Drawings
Sam Ryo is the proprietor (owner) of Sam's, a retailer of golf apparel. When recording the financial transactions of Sam's, Sam does not record an entry for a car he purchased for personal use. Sam took out a personal loan to pay for the car. What accounting concept guides Sam's behavior in this situation?
Economic entity assumption
Which of the following is not part of the accounting process?
Financial decision making
The common characteristic possessed by all assets is
Future economic benefit
International accounting standards are developed by the
IASB
Internal users of accounting information include all of the following except
Investors
Interpretation of reported information involves each of the following except
Limitations of reported data. Meaning of reported data. Uses of reported data. Correct! All of these choices are correct.
The ledger should be arranged in Alphabetical order. Chronological order. Dollar amount order. None of these choices are correct.
None of these choices are correct.
The ledger should be arranged in Alphabetical order. Chronological order. Dollar amount order. None of these choices are correct.
None of these choices are correct.
A debit is not the normal balance for which of the following? Asset account Owner's Drawings account Expense account Owner's Capital account
Owner's Capital account
Owner's equity is decreased by all of the following except
Owners investments
Which of the following would not be considered an internal user of accounting data for the LMN Company?
President of the employees' labor union.
Ownership is limited to one person.
Proprietorship
Net income results when
Revenues > Expenses
A debit is not the normal balance for which account listed below? Owner's Drawings Cash Accounts Receivable Service Revenue
Service Revenue
Which of the following is true regarding the corporate form of business organization?
The revenues of corporations are greater than the combined revenues of partnerships and proprietorships
On July 7, 2020, Rancho Realty Co. performed cash services of $1,900. The entry to record this transaction would include
a debit to Cash of $1,900.
Financial accounting ethics violations are
a major problem both in the U.S. and internationally.
Management could determine the amounts due from customers by examining which ledger account?
accounts receivable
For the basic accounting equation to stay in balance, each transaction recorded must
affect two or more accounts
If an individual asset is increased, then a possibility for the other effect of the transaction is
an equal decrease in another asset
Big Bite Diner received a bill of $800 from the Blackstone Wine Advertising Agency. The owner, K. T. Lang, is postponing payment of the bill until a later date. The effect on specific items in the basic accounting equation is
an increase in Accounts Payable and a decrease in Owner's Capital.
Capital is
an owner's permanent investment in the business.
If total liabilities increased by $6,000, then
assets must have increased by $6,000, or owner's equity must have decreased by $6,000.
An account is an individual accounting record of increases and decreases in specific
assets, liabilities, and owner's equity items
An account is an individual accounting record of increases and decreases in specific
assets, liabilities, and owner's equity items.
A balance sheet shows
assets, liabilities, and owner's equity.
Customarily, a trial balance is prepared
at the end of an accounting period
The ending owner's equity amount is shown on
both the balance sheet and the owner's equity statement.
When three or more accounts are required in one journal entry, the entry is referred to as a
compound entry
An accountant has debited an asset account for $1,400 and credited a liability account for $500. What can be done to complete the recording of the transaction?
credit a different asset account for $900
On October 3, Ken Steele, a carpenter, received a cash payment for services previously billed to a client. Ken paid his telephone bill, and he also bought equipment on credit. For the three transactions, at least one of the entries will include a
credit to accounts payable
Activities of an entity must be kept separate from its owner's activities.
economic entity assumption
A basic assumption of accounting that requires that the activities of an entity be kept separate from the activities of its owner is referred to as the
economic entity assumption.
A net loss will result during a time period when
expenses exceed revenues
Under IFRS, the trial balance
follows the same format as under GAAP
The record of activity in the entire group of accounts maintained by a company is called the
general ledger
The double-entry system requires that each transaction must be recorded
in at least two different accounts
Revenues are
increases/decreases in assets/liabilities from selling goods or providing services.
A credit to a liability account
indicates an increase in the amount owed to creditors
A credit to a liability account
indicates an increase in the amount owed to creditors.
Revenues would not result from
initial investment of cash by owner.
The fair value principle is applied for
investment securities
When an owner makes a withdrawal
it doesn't have to be cash, it could be another asset.
After transaction information has been recorded in the journal, it is transferred to the
ledger
The final step in the recording process is to transfer the journal information to the trial balance. financial statements. ledger. file cabinets.
ledger
After a business transaction has been analyzed and entered in the book of original entry, the next step in the recording process is to transfer the information to
ledger accounts
When journalizing, the reference column is left blank. used to reference the source document. used to reference the journal page. used to reference the financial statements.
left blank.
European companies rely
less on historical cost and more on fair values than U.S. companies.
Which account below is not a subdivision of owner's equity?
liabilities
The chart of accounts is a list of accounts and their balances at a given time. device used to prove the mathematical accuracy of the ledger . listing of the accounts and the account numbers which identify their location in the ledger. required step in the recording process.
listing of the accounts and the account numbers which identify their location in the ledger.
The assumption that the unit of measure remains sufficiently constant over time is part of the
monetary unity assumption
If owner's equity increases from the beginning of the year to the end of the year, then
net income plus investments is greater than owner drawings.
The ledger should be arranged in
none of these choices are correct
A debit is not the normal balance for which of the following?
owner's capital account
A credit is not the normal balance for which account listed below?
owner's drawing account
If services are rendered for credit, then
owner's equity will increase.
Owner's equity can be described as
ownership claim on total assets
George and Ringo met at law school and decide to start a small law practice after graduation. They agree to split revenues and expenses evenly. The most common form of business organization for a business such as this would be a
partnership.
The procedure of transferring journal entries to the ledger accounts is called
posting
an income statement
presents the revenues and expenses for a specific period of time.
Bookkeeping differs from accounting in that bookkeeping primarily involves which part of the accounting process?
recording
Owner's equity is often referred to as
residual equity
When two accounts are required in one journal entry, the entry is referred to as a balanced entry. simple entry. posting. nominal entry.
simple entry.
The left side of an account is: blank. a description of the account. the debit side. the balance of the account.
the debit side.
A problem with the monetary unit assumption is that
the dollar has not been stable over time
If the sum of the debit column equals the sum of the credit column in a trial balance, it indicates
the mathematical equality of the accounting equation
A complete journal entry does not show
the new balance in the accounts affected by the transaction.
The final step in the recording process is to
transfer journal information to ledger accounts
A list of accounts and their balances at a given time is called a(n)
trial balance
The double-entry accounting system is the basis of accounting systems
worldwide
