UH Accounting 2331 - Exam 1

Prepaid Insurance

Which of the following accounts would appear in the Balance Sheet debit column?

Purchasing a building for $110,000 by paying cash of $15000 and signing a note payable for $95000 will

^ Total Assets & Liabilities (buying building; owing more)

GAAP

a potential Stockholder of a corporation

Increase in an expense account; balanced by...

decrease in a asset account

On August 1, 2015, Xcel Auto Repair, Inc. paid $6,000 for six months rent. After adjusting entries are made, what will be the balance of Prepaid Rent on December 31, 2015?

$1,000

journal entry

Debits = Credits

Oct 1, company receives $1,000 from customer as advance payment for services to be rendered, and credited Unearned Revenues $750 services provided

Dec 31 they would need to debit Unearned Revenues for $750

Income Statement

Net Income = Revenues - Expenses

A two year insurance policy in the amount of $2,400 was purchased on Feb 1, 2015 and was recorded by debiting the prepaid insurance account. At the end of its fiscal year at June 30, 2015, the firm will have to recognize insurance expense of :

$1100

If net income is $80,000, dividend is $ 24,000, and ending RE balance is $105,000. How much is beginning RE?

$49

During September, Amy's shop had revenue of $4,500 and expenses of $1,600, and $1,350 paid as dividends. If the Retained Earnings on September 30 was $9,000, the Retained Earnings on September 1 must have been:

$7,450

Beginning RE $58,000 Ending RE $60,000 Liabilities $42,000 Net Income $75,000 What is the amount of Dividend paid?

$73

During the year, EcoWash has $120,000 in revenues, $50,000 in expenses, and $4000 in dividends. Retained Earnings is changed by

+$66,000

An increase in an expense account could be balances in a journal entry by:

A decrease in an asset account

Which of the individuals listed below is most interested in financial statements produced in accord with generally accepted accounting principles (GAAP)?

A loan Officer reviewing a loan application

Accc Equation (Balance Sheet)

A=L+SE

The Balance Sheet

Accounting Equation

Paying on accounts payable

Accounts Payable $$$ Cash $$$$$

Contra Asset Account

Accumulated Depreciation

Increases with a Debit:

Assets and Expense Accounts

Financial Statement

Balance Sheet (Cash, Receivables, payable) Income Statement (Revenues, Expenses)

Revenues total $10,200. Expenses total $7,300. Dividends declared and paid total $2,600. What is the balance in the revenues account after closing the temporary accounts to retained earnings account?

Balance of $0

Which of the following journal entries would be recorded if a business received cash of $600 on account for services performed at an earlier date?

Cash 600 Accounts Receivable 600

Those obligations of a firm that must be either paid in cash or settled by providing goods or services within one year are referred to as:

Current Liabilities

1 year of prepaid rent in advance. Debited prepaid rent

Debit Rent Expense; Credit Prepaid Rent

A business acquires equipment for $140,000 on January 1. The equipment has a life of seven years and 0 salvage value. Which of the following is the adjusting entry required on December 31?

Depreciation Expense $20,000 Accumulated Depreciation $20,000

Debiting

Increases Assets&Expense Accounts. Decreases Liability&SE Account

Crediting

Increases Liability& SE. Decreases Assets,&Expense Accoun

After initially recording a transaction, the data are then copied or posted to which of the following?

Ledger Account (GL)

At the end of an accounting period, the office supplies account shows a balance of $500, but the actual supplies on hand amount to only $300. If this situation calls for an adjusting entry, what account should be debited?

Office Supplies Expense

increased with a debit?

Prepaid Expense

income statement

Revenues - Expense = Net Income

Net Income =

Revenues - Expenses

What must result if the revenues minus the expenses is less than the amount of the dividends paid?

The retained earnings account decreases

A journal entry for a $75 payment for rent expense was posted as a debit to salary expense and a credit to cash. No other mistake was made. This error will cause which of the following conditions on the trial balance?

The sum of the credits will still equal the sum of the debits.

The accountant for Hobson Electrical Repair Corporation failed to make an adjusting entry to record $5,000 of unpaid salaries for the last two weeks of the year. Which of the following is true?

Total liabilities are under stated

Received Utility Bill the bill will be paid at a later date

Utility Expense $$$$$ Utility Payable $$$$

Accumulated Depreciation

Violates cost principle; "Contra Asset Account"

Corporation

authorized as a single entity; Limited liability for investors; Ability to make contracts in its own name Ownership rights proportional to shares Articles of incorporation

The Statement of Cash Flows

changes in CASH