BUSINESS TRANSACTIONS AND ACCOUNTING

Given that Jacob's Chocolates Company had beginning retained earnings of $4,000; net income during the period of $10,000; and dividends of $300 calculate the ending balance in the retained earnings account.

$13,700 4000 + 1000 = 14000 - 300 = $13,700

When supplies are purchased on credit it means that:

-a liability has been incurred. -the business will pay for the supplies at a later time. -the Accounts Payable account will be increased.

Boaz Company had beginning of year assets of $100 million and end of year assets of $120 million. Boaz's net income is $5 million. Calculate Boaz Company's return on assets. Round your answer to 1 decimal place.

4.5% Reason: $5 million/[($100 million + $120 million/)2] = 4.5%

Given the list of accounts below, identify which of them would appear on a balance sheet.

Accounts Payable Retained earnings, 12/31 Cash Supplies Equipment

Identify the correct definition of an asset:

An asset is a resource that a business owns or controls

Record the purchase of equipment for cash in the accounting equation would include an increase to the EQUIPMENT account and a decrease to the CASH account.

Answer in question

Return on assets is computed as Net Income divided by Total Assets.

FALSE REASON - Return on assets is computed as Net Income divided by Average Total Assets

Statement of Cash Flows

Identifies the cash inflows and outflows over a period of time

The accounts payable account is a(n) Blank______ account.

LIABILITY

Balance Sheet

Reports the balance of assets, liabilities and equity at a point in time

Statement of Retained Earnings

Reports the changes in equity during a period of time

Identify which of the following lists of accounts would belong on the statement of retained earnings.

Retained earnings and Dividends

Which of the following statements below lists the rules of entering transactions into the accounting equation?

The accounting equation must always remain in balance so that assets always equal the sum of liabilities and equity.

The correct definition of an income statement includes which of the following?

The statement reports a business's revenues and expenses over a period of time.

Record the purchase of equipment for cash in the accounting equation would include an increase to the ___________ (Cash/Equipment/Supplies) account and a decrease to the __________ (Cash/Equipment/Supplies) account.

equity; cash

Jackson's Catering Company provided cookies worth $3,000 to the local college. The college paid immediately. Record this transaction in Jackson's accounting equation by:

increasing Cash; increasing Revenues

Jackson Company purchased office equipment costing $3,000 for his business and paid immediately. Record this transaction in the accounting equation by:

increasing Equipment; decreasing Cash

On 8/1, supplies costing $500 were purchased on credit. Record this transaction in the accounting equation by:

increasing Supplies, and increasing Accounts Payable

On February 1, Russell's Consulting Services Company provided $1,000 of services to the local college. On February 1, Russell's collected $700, and the college will pay the balance next month. Record this transaction in the accounting equation on February 1 for Russell's Consulting Service by:

increasing both Cash and Accounts Receivable; and increasing Revenues

Accounting shows two basic aspects of a company:

what it owns and what it owes.

Define what the income statement reports by completing the following sentence: The income statement describes a company's REVENUES and EXPENSES along with the resulting net income or loss over a period of time due to earnings related activities.

Answer in question

To record the purchase of supplies for cash in the accounting equation, the company would increase SUPPLIES and decrease CASH.

Answer in question

On 6/25, supplies costing $1000 were purchased on credit, but only $400 of this amount was paid on 6/25. The remainder of the bill is owed on account. To record this transaction on 6/25: Supplies should be increased by $1000 Cash would be decreased by $400 Accounts Payable would be increased by $600

Answer in question.

Assets

Are resources a company owns or controls. These resources are expected to yield future benefits. The claims on a company's assets - what it owes - are separated into owner (equity) and nonowner (liability) claims. Together, liabilities and equity are the source of funds to acquire assets. Examples are web servers for an online services company, musical instruments for a rock band, and land for a vegetable grower. Assets include: cash, supplies, equipment, land, and accounts receivable. A RECEIVABLE is an asset that promises future inflow of resources. A company that provides a service or product on credit has an account receivable from that customer. Point: "On credit" and "On account" mean cash is received or paid at a future date.

Identify the main sections on a statement of cash flows. (Check all that apply.)

Cash flows from financing activities Cash flows from operating activities Cash flows from investing activities

Which list of accounts below, identifies only accounts that would appear on a balance sheet.

Common Stock, Equipment, Accounts Payable

ESG category with a sample metric

Environmental - Toxic Waste Social - Supply Chain Labor Governance - Accounting Controls

A framework that depicts how companies behave as responsible stewards of the environment is called:

Environmental, Social and Governance. ESG

Jack Pickle decided to start a small business as a corporation. His initial investment was $4,000 cash in exchange for common stock. Demonstrate how to record this transaction in the accounting equation.

Increase Cash by $4,000; Increase Common Stock by $4,000.

Income Statement

Reports the revenues and expenses incurred by a business for a period of time