Ch 1: Accounting in Business Video Assignment

If equity is $30,000 and liabilities are $19,000, then assets must equal:]

$49,000

The organization that is responsible for issuing International Financial Reporting Standards is the:

IASB

The four basic financial statements are:

Income Statement, Statement of retained earnings, Balance sheet, and Statement of cash flows.

________________________ includes opportunities in general accounting, cost accounting and internal auditing.

Managerial accounting

Identify which items belong on the income statement.

Revenue, expenses and net income

The majority of accounting opportunities are in _________ accounting.

private

Why is accounting important?

Accounting information impacts all of us.

Accounting certifications include:

CPA

Select the correct term for the following types of users:

Customers External Information Purchasing manager Internal Information Marketing Manager Internal Information Suppliers External Information Labor Union External Information

The organization that is primarily responsible for developing GAAP for use by all U.S. companies is the:

FASB

During its first year of operations, Mario Lupo formed Lupo Company as a corporation and personally invested $15,000 in the business in exchange for common stock. Lupo Company also paid dividends of $2,000. The company earned $35,000 of revenues and incurred $23,000 of expenses. At the end of the year, the company's equity totaled:

$25,000

Classify each of the following items as assets, liabilities, or equity from the drop down provided.

1. Accounts receivable <--------> Assets 2. Wages payable <--------> Liabilities 3. Supplies <--------> Assets 4. Equipment <--------> Assets 5. Notes payable <--------> Liabilities 6. Land <--------> Assets

Complete the following table with either a yes or no regarding the attributes of a proprietorship, partnership, corporation, and limited liability company (LLC).

1. Business taxed <-----> No <-----> No <-----> Yes <-----> No 2. Unlimited life <-----> No <-----> No <-----> Yes <-----> Yes 3. One owner allowed <-----> yes <-----> Yes <-----> No

Identify the correct principle for each of the following activities using the drop-down list.

A company records the expenses incurred to generate the revenue reported. Expense recognition principle Revenue is recognized when goods are provided to the customer at the amount expected to be received. Revenue recognition principle A company reports the details behind financial statements that would impact user's decisions.Full-disclosure principle Accounting information is based on actual cost.Measurement principle

a. Total assets of Charter Company equal $860,000 and its equity is $500,000. What is the amount of its liabilities? b. Total assets of Martin Marine equal $660,000 and its liabilities and equity amounts are equal to each other. What is the amount of its liabilities? What is the amount of its equity?

Assets Liabilities Equity A. $860,000- $360,000+$500,000 B. $660,000- $330,000+$330,000

Part C. On August 1, Lola Company's assets are $48,000 and its liabilities are $28,000. On August 4, Lola issues a sustainability report. On August 5, ownership invests $12,000 cash and $16,000 of equipment in Lola. After the investment, what is the amount of equity for Lola?

August 1: Equity = 48,000 - 28,000 Equity = $20,000 Change: Cash Invested + Equipment Invested 12,000 + 16,000 = $28,000 (A&E) August 5: Total Assets = 48,000 + 28,000 = $76,000 Total Liabilities = 28,000 + 0 = $28,000 Total Equity = 20,000 + 28,000 = $48,000 ANSWER: Assets = Liabilities + Equity August 1 $48,000 = $28,000 + $20,000 Change $28,000 = $0 + $28,000 August 5 $76,000 = $28,000 + $48,000

Identify which items belong on the balance sheet.

Dividends, beginning retained earnings, ending retained earnings

Identify which items belong on the statement of retained earnings.

Dividends, beginning retained earnings, ending retained earnings

Which of the following is a proper reflection of the sequence of steps when deciding on the preferred course of action in making an ethical decision?

Identify ethical concerns; Analyze options; Make ethical decision.

Analyze the following transaction and select the best answer. Tyler invests $2,000 cash in exchange for common stock, to begin a new company, Tyler's Tayloring. This transaction will:

Increase equity by $2,000.

Classify the following business activities using the drop-down list. (See picture)

Item Number 1 Happenings that affect the accounting equation Events Item Number 2 Exchanges of value between two entities External transactions Item Number 3 Exchanges within an entity Internal transactions

Part A. On January 1, Lumia Company's liabilities are $78,000 and its equity is $58,000. On January 3, Lumia purchases and installs solar panel assets costing $28,000. For the panels, Lumia pays $13,000 cash and promises to pay the remaining $15,000 in six months. What is the total of Lumia's assets after the solar panel purchase?

Jan 1: Assets = 78,000 + 58,000 Assets = $136,000 A Change: Asset Purchase - Cash Paid 28,000 - 13,000 = $15,000 L Change: Accounts Payable = $15,000 Jan 3: Total Assets = 136,000 + 15,000 = $151,000 Total Liabilities = 78,000 + 15,000 = $93,000 Total Equity = 58,000 + 0 = $58,000 ANSWER: Assets = Liabilities + Equity Jan 1 $136,000 = $78,000 + $58,000 Change $15,000 = $15,000 + $0 Jan 3 $151,000 = $93,000 + $58,000

Part B. On March 1, ABX Company's assets are $118,000 and its liabilities are $48,000. On March 5, ABX is fined $24,000 for failing emission standards. ABX immediately pays the fine in cash. After the fine is paid, what is the amount of equity for ABX?

March 1: Equity = 118,000 - 48,000 Equity = $70,000 Change: Cash Invested + Equipment Invested 12,000 + 16,000 = $28,000 (A&E) August 5: Total Assets = 48,000 + 28,000 = $76,000 Total Liabilities = 28,000 + 0 = $28,000 Total Equity = 20,000 + 28,000 = $48,000 ANSWER: Assets = Liabilities + Equity March 1 $118,000 = $48,000 + $70,000 Change ($24,000) = $0 + ($24,000) March 5 $94,000 = $48,000 + $46,000

Identify the type of activity by choosing the best answer for each question. Select each item listed below as being an identifying, recording, or a communicating activity.

Preparing and entering a list of checks issued. Recording Using a cash register to enter sales. Recording Entering a list of the sales invoices, including the prices and quantities, for the company's recordkeeper. Identifying Interpreting information from financial reports. Communicating Preparing financial statements for creditors. Communicating

In the fraud triangle, when a person feels an incentive to commit fraud, this is referred to as _________.

Pressure

Identify the correct assumption for each of the following activities using the drop-down list.

Presumes that the business will continue operating in the future. not attempted. Going-concern assumption A business is accounted for separately from other business entities and its owner. Business entity assumption Transactions and events are expressed in units of money. Monetary unit assumption The life of the company can be divided into specific time periods. Time period assumption

On January 31, Jean Consulting Company receives a bill for that month's utilities in the amount of $500. Jean sets it aside because she does not plan to pay the bill until its due date of February 15. What effect, if any, does this event have on the company's accounting equation as of January 31?

The business must record this event, which would increase liabilities and decrease equity on January 31.

Match the term and the definition.

The recording of transactions and events only, either manually or electronically. Recordkeeping selected answer correct An information and measurement system that identifies, records, and communicates relevant, reliable, and comparable information about an organization's business activities. Accounting

Identify the following users as either External users or Internal users.

a. Customers <----------> External user b. Lenders <----------> External user c. Suppliers <----------> External user d. External auditors <----------> External user e. FBI and IRS <----------> External user f. Distribution managers <----------> Internal user g. Business press <----------> External user h. District attorney <----------> External user i. Shareholders <----------> External user j. Human resource managers <----------> Internal user k. Consumer group <----------> External user l. Chief Executive Officer (CEO) <----------> Internal user