Financial Accounting Ch. 2
What is the amount of current assets on the classified balance sheet? Accounts Payable $4,500 Accounts Receivable $9,350 Cash $23,490 Common Stock $90,000 Equipment $49,500 Inventory $31,200 Notes Payable due December 31, Year 3 $2,500 Retained Earnings, December 31, Year 1 $14,090 Salaries and Wages Payable $2,450
$64,040
Ledger
A collection of records that summarizes the effects of transactions entered in the journal.
Obtaining a loan would be an example of a(n): Financing activity Financing activity and investing activity Investing activity Investing activity and operating activity Operating activity
Financing Activity
Which of the following is an example of an investing activity of a business? Issuing common stock Obtaining a loan Receiving an owner's investment of cash Purchasing office equipment
Purchasing office equipment
Buffy Inc., borrowed $50,000 from a bank, depositing those funds in its bank account and signing a formal agreement to repay the loan in two years. Which of the following statements is true with regards to this transaction? The duality of effects does not apply to borrowing transactions. Assets and liabilities increased. Liabilities and stockholders' equity increased. Assets, liabilities, and stockholders' equity increased.
Assets and liabilities increased.
Buffy Inc., issued shares of common stock to investors in exchange for cash contributions. Which of the following statements is true with regards to this transaction? The duality of effects does not apply to incorporation transactions. Assets and liabilities increased. Assets and stockholders' equity increased. Assets, liabilities, and stockholders' equity increased.
Assets and stockholders' equity increased.
Buffy Inc purchases and receives equipment totaling $8,000 in exchange for $8,000 cash. Which of the following statements is true with regards to this transaction? Assets increase. Assets and liabilities increased. Assets and stockholders' equity increased. Assets, liabilities, and stockholders' equity were not affected.
Assets, liabilities, and stockholders' equity were not affected.
The Notes Payable T-account had a beginning balance of $7,000, debits during the period totaling $5,000, and credits during the period totaling $15,000. What is the ending balance of the Notes Payable account?
$17,000
During the year, assets increased by $20,000 and stockholders' equity increased by $15,000. What was the increase in liabilities?
$5,000
The Cash T-account had a beginning balance of $1,000, debits during the period totaling $10,000, and credits during the period totaling $6,000. What is the ending balance of the Cash account?
$5,000
Accounts Payable $25,200 Cash $40,200 Common Stock $21,200 Equipment $10,200 Land $42,000 Notes Payable $46,000 What is the balance of the credit column on Chaco's trial balance?
$92,400
Assume that a journal entry with a debit to Equipment for $8,000 and a credit to Cash for $8,000 is recorded in the journal. What should be done next? - A debit of $8,000 should be posted to the Equipment account in the ledger - A credit of $8,000 should be posted to the Equipment account in the ledger - A debit of $8,000 should be posted to the Cash account in the ledger - A credit of $8,000 should be posted to the Cash account in the ledger - Since total assets are unchanged by this transaction, nothing will need to be posted to the ledger
- A debit of $8,000 should be posted to the Equipment account in the ledger - A credit of $8,000 should be posted to the Cash account in the ledger
Which of the following statements are true with regards to asset accounts? Assets are on the left-side of the accounting equation Assets are on the right-side of the accounting equation Assets are increased with debits Assets are increased with credits Assets are decreased with debits Assets are decreased with credits
- Assets are on the left-side of the accounting equation - Assets are increased with debits - Assets are decreased with credits
Which of the following statements are true with regards to journal entries? A journal entry includes one debit and one credit Accounts being debited are slightly indented below the accounts being credited The accounts that are debited in the transaction are followed by the accounts that are credited in the transaction The left column for dollar amounts is used for debits The right column for dollar amounts is used is for debits
- The accounts that are debited in the transaction are followed by the accounts that are credited in the transaction - The left column for dollar amounts is used for debits
The balance sheet of Ambiance Corporation reported current assets of $186,708, total assets of $300,000, current liabilities of $36,139, and total liabilities of $125,000. What is the company's current ratio?
5.17
Which financial statement would a potential creditor ask to review if it wants to determine whether a company might have the ability to pay? Statement of retained earnings Classified balance sheet Income statement Trial balance
Classified balance sheet
On April 10, Cary's Carpet Cleaning, Inc. borrows $15,000 from a bank, depositing those funds in its bank account and signing a formal agreement to repay the loan in one year. Prepare the appropriate journal entry for this transaction
Debit cash 15,000 credit notes payable 15,000
Which of the following are reported on the balance sheet? Assets Dividends Expenses Liabilities Revenues Stockholders' equity
asset, liability, and stockholders' equity
Which of the following are the types of business activities that affect the balances in asset, liability, and stockholders' equity accounts? Financing activities Investing activities Operating activities Balance sheet activities Common activities
operating, investing, and financing
liabilities are increased by
credits
stockholder's equity is increased by
credits
assets are increased by
debits
what do you record in the journal first?
debits
transactions are analyzed and their financial effects are entered in a
journal each day as they occur
transactions are recorded in
journal entries
Journal entry for Agreed to hire a new employee at a monthly salary of $3,000. The employee starts work next month.
no entry required
