ACC 231 Exam 1 Pt. 2
False
A balance sheet reports the company's financial position over a period of time.
total debits would exceed total credits on the trial balance.
A bookkeeper forgot to post a credit to Accounts Receivable, but did post the debit part of the journal entry correctly. Then:
False
A bookkeeper posted the same journal entry twice. This will cause the trial balance to be out of balance.
debit Accounts Payable for $3,200 and credit Cash for $3,200.
A business paid $3,200 on account. The journal entry would:
debit Equipment for $44,000 and credit Cash for $44,000.
A business paid $44,000 cash to purchase equipment. The business would:
debit Accounts Payable for $2,500 and credit Cash for $2,500.
A business paid $2,500 on account. The journal entry would:
debit Equipment for $50,000 and credit Cash for $50,000.
A business paid $50,000 cash to purchase equipment. The business would:
debit Supplies for $10,000 and credit Accounts Payable for $10,000.
A business purchased office supplies of $10,000 on account. The business would:
debit Supplies for $14,000 and credit Notes Payable for $14,000.
A business purchased office supplies of $14,000 by signing a note. The business would:
debit Supplies for $23,000 and credit Notes Payable for $23,000.
A business purchased office supplies of $23,000 by signing a note. The business would:
debit Supplies for $28,000 and credit Accounts Payable for $28,000.
A business purchased office supplies of $28,000 on account. The business would:
Debit Utilities Expense for $1,425 and credit Cash for $1,425.
A business received the current month's utility bill for $1,425, and immediately paid it. Which journal entry is prepared?
Debit Utilities Expense for $2,125 and credit Cash for $2,125.
A business received the current month's utility bill for $2,125, and immediately paid it. Which journal entry is prepared?
Debit Cash for $44,300 and credit Equipment for $44,300.
A business sold equipment for $44,300 cash. The equipment was purchased one month earlier for $44,300 but the plans for the equipment changed.
Debit Cash for $44,900 and credit Equipment for $44,900.
A business sold equipment for $44,900 cash. The equipment was purchased one month earlier for $44,900 but the plans for the equipment changed.
lists all of an organization's accounts and account numbers.
A chart of accounts:
No.
A company did not record the receipt and payment of an utility bill for $2,100. Is the trial balance out of balance?
No.
A company did not record the receipt and payment of an utility bill for $2,500. Is the trial balance out of balance?
No.
A company incorrectly recorded a receipt of cash on account. Accounts Receivable was debited for $1,000 and Cash was credited for $1,000. Is the trial balance out of balance?
No.
A company incorrectly recorded a receipt of cash on account. Accounts Receivable was debited for $1,400 and Cash was credited for $1,400. Is the trial balance out of balance?
financing cash flow.
A company issues common stock for $100,000. On a statement of cash flows, this will be reported as a(n):
No.
A company omitted a journal entry to record service revenue of $7,000 on account. Is the trial balance out of balance?
No.
A company omitted a journal entry to record service revenue of $12,000 on account. Is the trial balance out of balance?
Yes, by $5,400.
A company posted a $6,000 debit to Cash as $600. The credit of $6,000 to Service Revenue in the entry was posted correctly. Is the trial balance out of balance?
Yes, by $7,200.
A company posted a $8,000 debit to Cash as $800. The credit of $8,000 to Service Revenue in the entry was posted correctly. Is the trial balance out of balance?
No.
A company recorded a cash payment incorrectly. Accounts Receivable was debited for $2,400 and Cash was credited for $2,400. The correct entry would debit Accounts Payable for $2,400 and credit Cash for $2,400. Is the trial balance out of balance?
No.
A company recorded a cash payment incorrectly. Accounts Receivable was debited for $1,900 and Cash was credited for $1,900. The correct entry would debit Accounts Payable for $1,900 and credit Cash for $1,900. Is the trial balance out of balance?
cash outflow from investing activity.
A company reports the purchase of equipment for $1,000,000 in cash. On a statement of cash flows, this is a(n) example of:
$7.00.
A company sells travel mugs online for $12.00. They purchase the mugs for $7.00 and charge the customers $2.00 for shipping and handling. The cost of product sold per mug is:
$6
A company sells travel mugs online for $10. They purchase the mugs for $6 and charge the customers $2 for shipping and handling. The cost of product sold per mug is:
credit to Land.
A company sold land for the same price that they paid for it last year. When entering this transaction in the journal, there will be a:
$80,000
A construction company paid $80,000 cash for land used in the business. At the time of purchase, the land had a list price of $89,000. When the balance sheet was prepared, the fair value of the land was $84,000. At what amount should the land be reported on the balance sheet of the company?
$82,000
A construction company paid $82,000 cash for land used in the business. At the time of purchase, the land had a list price of $90,000. When the balance sheet was prepared, the fair value of the land was $85,000. At what amount should the land be reported on the balance sheet of the company?
each partner may conduct business in the name of the entity and make agreements that legally bind all partners.
A disadvantage of general partnerships is:
payment was received on account.
A journal entry that debits Cash and credits Accounts Receivable indicates that:
total expenses and losses exceed total revenues and gains.
A net loss occurs when:
not record the transaction in its books.
A partner in Sturm Company purchased a new yacht, for personal use, with his own funds. Sturm Company would:
False.
A partnership is a taxpaying entity.
Income Statement only.
A potential investor, interested in predicting the earnings of a company in the future, should examine the:
liabilities increased.
A transaction that includes a debit to an expense and a credit to a liability indicates that:
Totals for all accounts listed in the ledger.
A trial balance has which of the following features?
False
A trial balance is a required financial statement.
$112,200
AccoThe accounts of Yardy Company are as follows on November 30, 2019: Account Balance Accounts Payable $23,500 Accounts Receivable $17,600 Cash $69,000 Common Stock $36,000 Dividends $8,000 Insurance Expense $2,100 Retained Earnings $29,800 Salary Expense $14,000 Sales Revenue $12,000 Supplies $1,500 What is the total of the debit column in the trial balance at November 30, 2019?
False.
Accounting information is used by investors and creditors, but not by regulatory bodies.
True.
Accounting is an information system that measures business activities.
True.
Accounting is moving in the direction of reporting more and more assets and liabilities at their fair values.
True.
Accounting is often called the language of business.
True.
Accounting produces financial statements, which report information about a business.
journal.
Accounting transactions are initially recorded in the:
False
Accounts are listed in random order in a trial balance.
Cash, Accounts Receivable, and Supplies.
Accounts with normal debit balances include:
Fixed assets
Accumulated depreciation is normally associated with which asset on the Balance Sheet?
limited liability of the stockholders for the corporation's debts.
Advantages of a corporation include:
Dividends
All of the following are expenses EXCEPT for:
business operations cannot be divided into segments.
All of the following are true statements about the entity assumption EXCEPT for:
dividends declared.
All of the following line items are found on the balance sheet EXCEPT for:
dividends declared.
All of the following line items are found on the income statement EXCEPT for:
total stockholders' equity.
All of the following line items are found on the statement of cash flows EXCEPT for:
assets
All of the following will appear on the income statement EXCEPT for:
the payment of cash dividends.
All of the following would be considered investing activities on the statement of cash flows EXCEPT for:
True
Although a trial balance can be prepared at any time, the most common time is at the end of the accounting period.
the amount of the debits exceeds the amount of the credits.
An account will have a debit balance if:
False
An account with a normal debit balance is most often an asset or revenue account.
$600 as $60.
An example of a slide−type error is writing:
$500 as $50.
An example of a slide−type error is writing:
$1,500 as $5,100.
An example of a transposition error is writing:
$1,400 as $4,100.
An example of a transposition error is writing:
sales commissions paid to employees.
An example of an operating expense is:
for accounting purposes, a proprietorship is a distinct entity, separate from the proprietor
An important factor to consider when determining how to organize a business is that:
debit to Cash and a credit to Common Stock.
An owner makes an investment of cash into the business and receives shares of stock. This transaction is recorded as a:
$51,000.
Andy Company had a cash balance on May 1 of $32,000. At the end of May, the cash balance has increased to $31,000. During the month of May, Andy received cash of $50,000 from various sources. Based on this information, cash payments for the month of May were:
$44,000.
Andy Company had a cash balance on May 1 of $27,000. At the end of May, the cash balance has increased to $31,000. During the month of May, Andy received cash of $48,000 from various sources. Based on this information, cash payments for the month of May were:
True.
Another name for the continuity assumption is the going−concern assumption.
statement of retained earnings
An investor, wishing to assess the reasons for a change in retained earnings over a period of a year, would probably examine the:
$43,000.
At the end of the current accounting period, account balances were as follows: Cash, $29,000; Accounts Receivable, $44,000; Common Stock, $18,000; Retained Earnings, $12,000. Liabilities for the period were:
$41,000
At the end of the current accounting period, account balances were as follows: Cash, $29,000; Accounts Receivable, $44,000; Common Stock, $18,000; Retained Earnings, $14,000. Liabilities for the period were:
has two main categories of liabilities.
A company's balance sheet:
income statement.
A company's interest expense for the period is reported on the:
operating activities.
A company's main source of cash should be:
net income of $81,000
Beck Company had the following accounts and balances at the end of the year. What is net income or net loss for the year? Cash $72,000 Accounts Payable $12,000 Common Stock $21,000 Dividends $12,000 Operating Expenses $14,000 Accounts Receivable $56,000 Inventory $44,000 Long−term Notes Payable $33,000 Revenues $95,000 Salaries Payable $32,000
net income of $79,000
Beck Company had the following accounts and balances at the end of the year. What is net income or net loss for the year? Cash $79,000 Accounts Payable $12,000 Common Stock $21,000 Dividends $12,000 Operating Expenses $15,000 Accounts Receivable $50,000 Inventory $45,000 Long−term Notes Payable $33,000 Revenues $94,000 Salaries Payable $28,000
True.
Bookkeeping is a mechanical part of accounting.
$167,000
Cash Golden Company had the following accounts and balances at the end of the year. What are total assets at the end of the year? Cash $75,000 Accounts Payable $19,000 Common Stock $21,000 Dividends $12,000 Operating Expenses $12,000 Accounts Receivable $52,000 Inventory $40,000 Long−term Notes Payable $33,000 Revenues $135,000 Salaries Payable $34,000
decrease retained earnings on the statement of retained earnings.
Cash dividends declared:
$75,000
Census Company had the following accounts and balances at the end of the year. What are total liabilities at the end of the year? Cash $69,000 Accounts Payable $13,000 Common Stock $21,000 Dividends $12,000 Operating Expenses $12,000 Accounts Receivable $54,000 Inventory $43,000 Long−term Notes Payable $34,000 Revenues $105,000 Salaries Payable $28,000
$75,000
Census Company had the following accounts and balances at the end of the year. What are total liabilities at the end of the year? Cash $78,000 Accounts Payable $13,000 Common Stock $21,000 Dividends $12,000 Operating Expenses $12,000 Accounts Receivable $54,000 Inventory $46,000 Long−term Notes Payable $35,000 Revenues $115,000 Salaries Payable $27,000
All of the above: what is ethical in one country may not be ethical in another country. B. what is legal in one country may not be legal in another country. C. a foreign government threatening to take over the company's plant.
Complicating factors for a global business include:
$126000
Connar Company reports the following accounts and balances at year end: Long−Term Notes Payable $150,000 Accounts Receivable $29,000 Accounts Payable $37,000 Building $55,000 Cash and Cash Equivalents $83,000 Salaries Expense $20,500 Common Stock $22,000 Interest Payable $1,500 Land $40,000 Short−term Investments $7,000 Income Taxes Payable $13,000 Equipment $59,500 Supplies $7,000 Service Revenue $99,000 Supplies Expense $18,000 Utilities Expense $8,500 Income Tax Expense $10,000 What is the total amount of current assets at the end of the year? A.
$129000
Connar Company reports the following accounts and balances at year end: Long−Term Notes Payable $150,000 Accounts Receivable $28,000 Accounts Payable $37,000 Building $55,000 Cash and Cash Equivalents $83,000 Salaries Expense $20,500 Common Stock $22,000 Interest Payable $1,500 Land $40,000 Short−term Investments $9,000 Income Taxes Payable $12,000 Equipment $59,500 Supplies $9,000 Service Revenue $99,000 Supplies Expense $18,000 Utilities Expense $8,500 Income Tax Expense $10,000 What is the total amount of current assets at the end of the year?
12 months or within the business's operating cycle if longer than a year.
Current assets are assets expected to be converted to cash, sold, or consumed during the next:
long−term investments.
Current assets as reported on the balance sheet do NOT include:
treasury stock.
Current liabilities as reported on the balance sheet do NOT include:
False.
David Company has total assets of $500,000 and total liabilities of $180,000. David Company's stockholders' equity must therefore be $680,000.
all of the above. (creditors., the Securities and Exchange Commission., the Internal Revenue Service.)
Decision makers who use accounting information include:
Statement of Retained Earnings.
Dividends declared are reported on the:
True
Each category of activities on the statement of cash flows results in net cash provided or net cash used.
True
Each journal entry should contain a brief description of the transaction.
materiality
Enhancing qualitative characteristics of accounting information do NOT include:
True
Entering a transaction in the journal is also known as booking the journal entry.
chronologically.
Entries are listed in the journal:
balance sheet with long−term assets.
Equipment would appear on the:
False
Every corporation must pay dividends every year.
must debit at least one account and credit at least one account.
Every journal entry:
sale of a piece of equipment for cash.
Examples of financing activities on the statement of cash flows do NOT include:
accounts payable and long−term debt.
Examples of liabilities include:
True.
Expenses are decreases in retained earnings that result from operations.
cost of products and services sold and salaries expense.
Expenses of a business include:
members
Federal income taxes are paid by ________ in a limited liability company.
False.
Generally accepted accounting principles (GAAP) are the accounting guidelines formulated by the Securities and Exchange Commission.
$91,000
Gerald Company has the following account balances at the end of the first year of operations: Revenues $105,000 Salaries Expense $13,000 Dividends $8,000 Utilities Expense $11,000 Advertising Expense $9,000 Cash $38,000 Land $53,000 Common Stock $55,000 What are total assets at the end of the first year?
$91,000
Gerald Company has the following account balances at the end of the first year of operations: Revenues $100,000 Salaries Expense $13,000 Dividends $9,000 Utilities Expense $11,000 Advertising Expense $9,000 Cash $38,000 Land $53,000 Common Stock $56,000 What are total assets at the end of the first year?
$177,000
Golden Company had the following accounts and balances at the end of the year. What are total assets at the end of the year? Cash $79,000 Accounts Payable $20,000 Common Stock $21,000 Dividends $12,000 Operating Expenses $12,000 Accounts Receivable $54,000 Inventory $44,000 Long−term Notes Payable $33,000 Revenues $110,000 Salaries Payable $30,000
is a verifiable measure that is relatively free from bias.
Historical cost:
timeliness.
If a company prepares its financial statements three years after the end of its accounting period, it has violated the qualitative characteristic of:
Accounts Payable is decreased.
If a journal entry includes a debit to Accounts Payable and a credit to Cash:
2.
If a posting error has occurred whereby a debit is treated as a credit, then the out−of−balance amount on the trial balance will be evenly divisible by:
A and B.
If an investor wants to know a company's cash balance at the end of the year, this balance is reported on the:
Divide the out−of−balance amount by 5.
If the trial balance does not balance, several steps can be taken to find the error. Which step will probably NOT help you find the error?
True
In a journal entry, the sum of the debits must always equal the sum of the credits.
International Financial Reporting Standards for both companies.
In order to compare the financial statements of Toyota Corporation to the financial statements of General Motors, it would be preferable to use:
ledger.
In order to determine the balance in an account, you must look at the:
journal.
In order to see a complete transaction in one place, you would need to look at the:
False
In the journalizing process, the credit side is entered on the left margin, and the debit side is indented to the right.
ledger.
Information for the trial balance is obtained from the:
understandability.
Information must be sufficiently transparent so that it makes sense to reasonably informed users of the financial statements, such as creditors. This qualitative characteristic of information is called:
$190,000
In 1990, Johnson Company purchased a building for $190,000. In 2020, a real estate professional says the building has a fair value of $1,600,000. In 2020, a similar building down the street recently sold for $900,000. What value, before consideration of accumulated depreciation, is reported for the building on the balance sheet at December 31, 2020?
$170,000
In 1990, Johnson Company purchased a building for $170,000. In 2020, a real estate professional says the building has a fair value of $1,000,000. In 2020, a similar building down the street recently sold for $900,000. What value, before consideration of accumulated depreciation, is reported for the building on the balance sheet at December 31, 2020?
Building 33,000 Notes Payable 33,000
Jaye Company purchased a new building by signing a note for $33,000.00. The entry to record the transaction is:
Building 25,000 Notes Payable 25,000
Jaye Company purchased a new building by signing a note for $25,000. The entry to record the transaction is:
True
Journal entries can have more than two accounts as long as the total debits equal the total credits.
$54000
Kolander Company has the following accounts and balances at the end of the year: Long−Term Notes Payable $56,000 Accounts Receivable $28,000 Accounts Payable $41,000 Building $57,000 Cash and Cash Equivalents $84,000 Common Stock $127,000 Interest Payable $2,500 Land $44,000 Short−term Investments $5,000 Income Taxes Payable $11,000 Equipment $63,500 Supplies $10,000 What is the amount of Retained Earnings at the end of the year? A. $164,500
$45000
Kolander Company has the following accounts and balances at the end of the year: Long−Term Notes Payable $59,000 Accounts Receivable $28,000 Accounts Payable $42,000 Building $59,000 Cash and Cash Equivalents $85,000 Common Stock $126,000 Interest Payable $5,500 Land $41,000 Short−term Investments $8,000 Income Taxes Payable $11,000 Equipment $61,500 Supplies $6,000 What is the amount of Retained Earnings at the end of the year?
debts payable to outsiders called creditors.
Liabilities are:
True.
Long−term debt is a liability that is payable beyond one year from the date of the financial statements.
$55,000
Lorna Company is a new company with a beginning retained earnings balance of zero. It has the following account balances at the end of the first year of operations: Accounts Payable $37,000 Revenues $99,000 Salaries Expense $14,000 Dividends $10,000 Utilities Expense $14,000 Advertising Expense $6,000 Short−term Investments $20,000 Cash $72,000 Land $50,000 Common Stock $50,000 What is the ending balance in Retained Earnings?
$62,000
Lorna Company is a new company with a beginning retained earnings balance of zero. It has the following account balances at the end of the first year of operations: Accounts Payable $37,000 Revenues $106,000 Salaries Expense $14,000 Dividends $8,000 Utilities Expense $12,000 Advertising Expense $10,000 Short−term Investments $69,000 Cash $33,000 Land $50,000 Common Stock $53,000 What is the ending balance in Retained Earnings?
$137,000
Michael Company reports Total Assets of $292,000, Common Stock of $53,000, and Retained Earnings of $102,000. What are total liabilities at the end of the first year?
$110,000
Michael Company reports Total Assets of $254,000, Common Stock of $50,000, and Retained Earnings of $94,000. What are total liabilities at the end of the first year?
revenues − expenses.
Net income is computed as:
F
Net income is the profit left over after subtracting expenses and dividends from revenues and gains.
is often referred to as the "bottom line" on an income statement.
Net income:
current liability.
Notes payable (due in 60 days) would appear on the balance sheet as a:
increase of $19,000
On January 1, 2019, total assets for Wininger Technologies were $136,000; on December 31, 2019, total assets were $157,000. On January 1, 2019, total liabilities were $114,000; on December 31, 2019, total liabilities were $116,000. What is the amount of the change and the direction of the change in Wininger Technologies' stockholders' equity for 2019?
increase of $13,000
On January 1, 2019, total assets for Wininger Technologies were $136,000; on December 31, 2019, total assets were $157,000. On January 1, 2019, total liabilities were $110,000; on December 31, 2019, total liabilities were $118,000. What is the amount of the change and the direction of the change in Wininger Technologies' stockholders' equity for 2019?
debit to Advertising Expense.
On March 31, Baker Company received a bill and paid for advertising costs for the current month. This payment results in a:
Debit Accounts Receivable for $3,800 and credit Service Revenue for $3,800.
On May 1, a business provided legal services to a client and billed the client $3,800. The client promised to pay the business in one month. Which journal entry should the business record on May 1?
Debit Accounts Receivable for $4,000 and credit Service Revenue for $4,000.
On May 1, a business provided legal services to a client and billed the client $4,000. The client promised to pay the business in one month. Which journal entry should the business record on May 1?
Debit Cash for $3,600 and credit Accounts Receivable for $3,600.
On May 10, a business collected $3,600 on account. What journal entry is needed on that date?
Debit Cash for $4,200 and credit Accounts Receivable for $4,200
On May 10, a business collected $4,200 on account. What journal entry is needed on that date?
positive amounts.
On a statement of cash flows, cash receipts are reported as:
a net loss decreases retained earnings.
On the statement of retained earnings:
members
Owners of an LLC are called:
False
Posting accounting transactions avoids the necessity of journalizing transactions.
False
Posting is the process of copying data from the ledger to the journal.
copying the information from the journal to the ledger.
Posting is:
$41000
Potter Company reports the following line items: Long−Term Notes Payable $50,000 Accounts Receivable $28,000 Accounts Payable $37,000 Building $55,000 Cash and Cash Equivalents $80,000 Salaries Expense $23,500 Common Stock $22,000 Interest Payable $1,500 Land $40,000 Short−term Investments $5,000 Income Taxes Payable $10,000 Equipment $59,500 Supplies $5,000 Service Revenue $106,000 Supplies Expense $21,000 Utilities Expense $10,500 Income Tax Expense $10,000 What is net income? A.
$46,000
Potter Company reports the following line items: Long−Term Notes Payable $50,000 Accounts Receivable $28,000 Accounts Payable $37,000 Building $55,000 Cash and Cash Equivalents $80,000 Salaries Expense $21,500 Common Stock $27,000 Interest Payable $1,500 Land $40,000 Short−term Investments $5,000 Income Taxes Payable $10,000 Equipment $59,500 Supplies $5,000 Service Revenue $106,000 Supplies Expense $18,000 Utilities Expense $8,500 Income Tax Expense $12,000 What is net income? A. $106,000
operating activities, investing activities, and financing activities
Purchases and sales of long−term assets are financing cash flows.
relevance and faithful representation.
Question Help To be useful, accounting information must have the fundamental qualitative characteristics of:
assets
Receivables are classified as:
False.
Relevance is one of the four enhancing qualitative characteristics.
False
Revenues and expenses are reported on both the income statement and the statement of retained earnings.
False.
Revenues are cash distributions to the stockholders.
Net income was $7,000; the change in retained earnings was $5,000.
Revenues were $150,000, expenses were $143,000, and cash dividends declared and paid were $2,000. What were the net income and the change in retained earnings for the period? (Net income = revenues - expenses) (Change in retained earnings = net income -cash dividends declared and paid)
Net income was $6,000; the change in retained earnings was $3,000.
Revenues were $150,000, expenses were $144,000, and cash dividends declared and paid were $3,000. What were the net income and the change in retained earnings for the period? (Net income = revenues - expenses) (Change in retained earnings = net income -cash dividends declared and paid)
increases in retained earnings resulting from delivering goods or services to customers.
Revenues are:
$62,000
Seidner Company had the following account balances at the end of the first year of operations: Revenues $105,000 Salaries Expense $18,000 Dividends $14,000 Utilities Expense $15,000 Advertising Expense $10,000 Short−term Investments $20,000 Cash $36,000 Land $50,000 Common Stock $50,000 What is the amount of net income or net loss for the year?
$63,000
Seidner Company had the following account balances at the end of the first year of operations: Revenues $103,000 Salaries Expense $16,000 Dividends $11,000 Utilities Expense $15,000 Advertising Expense $9,000 Short−term Investments $20,000 Cash $37,000 Land $50,000 Common Stock $50,000 What is the amount of net income or net loss for the year?
have limited liability for the corporation's debts.
Shareholders of a corporation:
$107,000.
Simmons Company began the month with a balance of $83,000 in Accounts Receivable. An analysis of the account determined that sales on account for the month totaled $112,000. At the end of the month, the balance in Accounts Receivable was $88,000. From this information, it can be determined that Simmons Company had collections from customers on account of:
$111,000.
Simmons Company began the month with a balance of $84,000 in Accounts Receivable. An analysis of the account determined that sales on account for the month totaled $113,000. At the end of the month, the balance in Accounts Receivable was $86,000. From this information, it can be determined that Simmons Company had collections from customers on account of:
False.
Since Habitat for Humanity is not concerned about making a profit, the entity does not need to use accounting information.
True.
Stockholders have no personal obligation for the corporation's debts.
short−term investments.
Stockholders' equity as reported on the balance sheet does NOT include:
enables accountants to ignore the effect of inflation on the accounting records.
The stable−monetary−unit assumption:
$44,000
The Accounts Receivable account for Johnny's Mechanic Shop had a beginning balance of $34,000. During the month, Johnny made sales on account of $45,000. The ending balance in the Accounts Receivable account is $35,000. What are cash collections for the month?
$500,000
The Accounts Receivable account for Johnny's Mechanic Shop had a beginning balance of $36,000. During the month, Johnny made sales on account of $46,000. The ending balance in the Accounts Receivable account is $32,000. What are cash collections for the month?
False
The American Institute of Certified Public Accountants (AICPA) Code of Professional Conduct contains basic principles that can only be applied to CPAs.
True
The American Institute of Certified Public Accountants (AICPA) Code of Professional Conduct contains basic principles that provide guidance to all of its members in the performance of their professional duties.
Statement of Cash Flows.
The Balance Sheet is used to prepare the:
Only the factory in Detroit.
The CEO of Clarkson Company owns a vacation home in Hawaii. Clarkson Company owns a factory in Detroit where it is headquartered. Which of these properties is considered to be asset(s) of the business?
income statement, statement of retained earnings, balance sheet, statement of cash flows.
The CORRECT data flow from one financial statement to the next is:
False.
The Clarke Company had beginning retained earnings of $20,000 and net income of $5,000. Clarke declared and paid dividends of $1,000. Therefore, the ending retained earnings is $25,000.
$29,000.
The Diamond Store began business on June 1. During the month of June, Diamond had cash payments of $11,000. At the end of June, it had a $18,000 cash balance. Based on this information, the cash receipts for the month of June were:
$28,000.
The Diamond Store began business on June 1. During the month of June, Diamond had cash payments of $8,000. At the end of June, it had a $20,000 cash balance. Based on this information, the cash receipts for the month of June were:
Statement of Retained Earnings and Statement of Cash Flows.
The Income Statement is used to prepare the:
International Financial Reporting Standards.
The International Accounting Standards Board is responsible for establishing:
False.
The SEC establishes International Financial Reporting Standards.
Balance Sheet.
The Statement of Retained Earnings is used to prepare the:
entity assumption.
The accounting assumption that states that the business, rather than its owners, is the reporting unit is the:
Assets −Liabilities = Stockholders' Equity.
The accounting equation can be stated as:
Assets = Liabilities + Paid−in Capital + Retained Earnings.
The accounting equation can be stated as:
True.
The accounting equation must always be in balance.
False.
The accounting equation shows the relationship among assets, liabilities and net income.
True.
The accounting process begins and ends with people making decisions.
Cash, Accounts Receivable, Supplies, Accounts Payable
The accounts of Local Company at May 31, 2019 are as follows: Account Balance Accounts Payable $23,500 Accounts Receivable $15,600 Cash $68,000 Common Stock $32,000 Dividends $3,000 Insurance Expense $2,100 Retained Earnings $25,800 Salary Expense $1,100 Sales Revenue $10,000 Supplies $1,500 What are the first four lines, in proper order, on the trial balance at May 31, 2019?
$117,200
The accounts of Yardy Company are as follows on November 30, 2019: Account Balance Accounts Payable $26,500 Accounts Receivable $16,600 Cash $73,000 Common Stock $37,000 Dividends $8,000 Insurance Expense $4,100 Retained Earnings $28,800 Salary Expense $14,000 Sales Revenue $11,000 Supplies $1,500 What is the total of the debit column in the trial balance at November 30, 2019?
False
The amount of cash received on the sale of the company's stock in excess of par value is called retained earnings.
represent economic resources that are expected to produce a future benefit.
The assets of a company:
True
The balance of an account is the difference between the account's total debits and total credits.
ending balance in retained earnings.
The balance sheet includes the:
T
The balance sheet is also called the statement of financial position.
statement of financial position.
The balance sheet is also known as the:
False
The balance sheet is organized in terms of the organization's operating, investing, and financing activities.
assets, liabilities, and equity.
The balance sheet reports information about:
True.
The basic component of paid−in capital is common stock.
False.
The business records of a sole proprietorship should include the proprietor's personal finances.
False.
The calculation of ending retained earnings considers the beginning retained earnings, current period net income or net loss, and stockholders' equity.
decision making.
The conceptual foundation of accounting does not include:
is the direct cost of the products sold.
The cost of products sold:
current liability.
The current portion of a long−term note payable is classified on the balance sheet as a:
True
The decision framework for making ethical judgments provides general guidance for everyone, regardless of profession or industry.
ending balances in the ledger accounts.
The dollar amounts listed on the trial balance are obtained from the:
maximize the economic benefit to the decision maker.
The economic factor in decision making requires the decision maker to:
A and C. Balance Sheet. Statement of Cash Flows.
The ending balance of Cash and Cash Equivalents is reported on the:
A and B. Balance Sheet. Statement of Retained Earnings.
The ending balance of Retained Earnings is reported on the:
Balance Sheet.
The ending balance of cash and cash equivalents is found on the Statement of Cash Flows and the:
Accounts Payable.
The entry to record the purchase of supplies on account includes a credit to:
the amount the business could sell the asset for.
The fair value of a plant asset is equal to:
True
The financial statements can be prepared from the trial balance.
specifying each account affected by the transaction and classifying the account by type.
The first step in recording a transaction in the journal is:
False.
The fundamental qualitative characteristics of accounting information are relevance and reliability.
False.
The historical cost principle is not used widely in the United States to value assets.
covers a defined period of time.
The income statement:
False
The journal is a grouping of all the T−accounts, with their balances.
True
The journal is the book of original entry.
revenues, expenses, and dividends.
The major types of transactions that affect retained earnings are:
B and C. B. statement of retained earnings. Your answer is not correct. C. statement of cash flows, if the indirect method is used.
The net income shown on the income statement also appears on the:
all of the above: Statement of Retained Earnings. Statement of Cash Flows. Income Statement.
The net loss for a company is reported on the:
credit; retained earnings
The normal balance of a revenue account is a ________ because revenues increase ________.
debit; retained earnings
The normal balance of an expense account is a ________ because expenses decrease ________.
falls on the side where increases are recorded.
The normal balance of an account:
debit; asset
The normal balance of the Accounts Receivable account is a ________ because it is a(n) ________ account.
cash and cash equivalents, accounts receivable, inventory, prepaid expenses.
The order in which current assets are typically listed is:
proprietorship
The owner of a ________ is personally liable for all the business's debts.
retained earnings.
The portion of net income that the company has kept over a period of years and not used for dividends is called:
historical cost.
The principle stating that assets acquired by the business should be recorded at their actual cost on the date of purchase is:
not part of the accounting process.
The process of copying the information from the journal to the trial balance is:
transaction occurs, transaction analyzed, journalizing, and posting.
The proper order for the accounting process is:
Office Equipment and a credit to Cash.
The purchase of office computers for cash includes a debit to:
a credit to Cash and a credit to Accounts Payable.
The purchase of equipment, involving a cash down payment and a promise to pay the balance in the future, includes:
liquidating value.
The relevant measure of the value of the assets of a company that is going out of business is the:
False
The statement of cash flows measures operating performance.
False
The three factors that influence business and accounting decisions are economic, legal, and fin
economic, legal, and ethical.
The three factors that influence business and accounting decisions are:
False
The total debits to an account must equal the total credits to the account.
False
The trial balance for James Corporation shows that the total debits equal the total credits. This indicates that all of the accounts are free from errors.
total debits of all the accounts equal total credits of all the accounts.
The trial balance is used to determine if:
all of the above. (balance sheet only., statement of retained earnings only., income statement only.)
The trial balance is used to prepare the:
True
The trial balance summarizes all the account balances for the financial statements and shows whether total debits equal total credits.
False.
The two main components of stockholders' equity are paid−in capital and dividends.
financial and managerial.
The two types of accounting are:
True.
The word "payable" always signifies a liability.
ethical
The ________ factor recognizes that while certain actions might be both economically profitable and legal, they still may not be right.
contains all the accounts used by a business.
The ledger:
assets minus liabilities.
The owners' equity of a business is equal to:
debit Salary Expense for $1,900 and credit Cash for $1,900.
Two employees worked one week and were paid salaries of $1,900. The journal entry would:
debit Salary Expense for $2,500 and credit Cash for $2,500.
Two employees worked one week and were paid salaries of $2,500. The journal entry would:
must be capable of being checked for accuracy, completeness and reliability.
Verifiability means that the accounting information:
$209500
Wetzel Company has the following accounts and balances at the end of the fiscal year: Long−Term Notes Payable $154,000 Accounts Receivable $32,000 Accounts Payable $42,000 Building $55,000 Cash and Cash Equivalents $79,000 Salaries Expense $20,500 Common Stock $24,000 Interest Payable $3,500 Land $45,000 Short−term Investments $29,000 Income Taxes Payable $10,000 Equipment $59,500 Supplies $27,000 Service Revenue $99,000 Supplies Expense $38,000 Utilities Expense $28,500 Income Tax Expense $22,000 What is the total amount of liabilities at the end of the year?
$205500
Wetzel Company has the following accounts and balances at the end of the fiscal year: Long−Term Notes Payable $150,000 Accounts Receivable $30,000 Accounts Payable $41,000 Building $55,000 Cash and Cash Equivalents $38,000 Salaries Expense $20,500 Common Stock $22,000 Interest Payable $4,500 Land $43,000 Short−term Investments $30,000 Income Taxes Payable $10,000 Equipment $59,500 Supplies $25,000 Service Revenue $99,000 Supplies Expense $38,000 Utilities Expense $28,500 Income Tax Expense $25,000 What is the total amount of liabilities at the end of the year? A. $110,500
It is a liability for goods or services purchased on credit and supported by the credit standing of the purchaser.
What is an account payable?
Record the transaction in the journal.
What is the last step in the journalizing process?
True
When a trial balance is out of balance due to a slide−type error, the difference between total debits and total credits will be evenly divisible by 9.
False
When a trial balance is out of balance due to a transposition error, the difference between total debits and total credits will be evenly divisible by 2.
an amount is entered on the debit side of the expense account.
When an expense account is increased:
operating expenses are the costs of everyday operations such as selling expenses.
When analyzing a company's income statement, a fact to remember is that:
accounts payable should have a credit balance.
When computing the normal balance of an account:
asset; liability
When listing the accounts on the trial balance, list the ________ accounts first and then the ________ accounts.
After Retained Earnings.
When listing the accounts on the trial balance, where is the dividends account listed?
Yes, by $900.
When listing the assets in the trial balance, the balance for Accounts Receivable was transposed. The correct balance is $2,100 and the amount was written as $1,200. Is the trial balance out of balance?
Yes, by $2,700.
When listing the assets in the trial balance, the balance for Accounts Receivable was transposed. The correct balance is $4,100 and the amount was written as $1,400. Is the trial balance out of balance?
A. the dollar amount of debits in the journal entry to the appropriate accounts. B. the dollar amounts of credits in the journal entry to the appropriate accounts. A & B
When posting a journal entry to the ledger, transfer:
a net loss.
When total expenses exceed total revenues, the result is:
Advertising Expense
Which account has a normal debit balance?
The bookkeeper recorded a journal entry with a debit of $400 and a credit of $400, as a debit of $400 and a credit of $40.
Which error will be uncovered by a trial balance?
income statement
Which financial statement answers the following question: How well did the company perform during the year?
balance sheet
Which financial statement answers the following question: What is the company's financial position at fiscal year end?
Balance sheet
Which financial statement is dated at the moment in time when the accounting period ends?
Income statement
Which financial statement must be prepared before the others?
statement of cash flows
Which financial statement reports cash payments and cash receipts over a period of time?
revenues, operating expenses, net income
Which is the CORRECT order for items to appear on the income statement?
faithful representation
Which of the following characteristics does not apply to verifiability?
corporation
Which of the following entities pay federal income taxes?
general partner in a limited liability partnership
Which of the following have unlimited liability for a company's debts?
net income
Which of the following increases retained earnings?
Intangible assets are long−term assets with no physical substance.
Which of the following is a CORRECT statement about long−term assets?
It lists the balance sheet accounts first.
Which of the following is a CORRECT statement about a chart of accounts?
Income and losses of the partnership "flow through" to the partners.
Which of the following is a TRUE statement about the characteristics of partnerships?
the names of the employees involved in recording the transaction
Which of the following items would NOT be included in the journal entry for a transaction?
net income
Which of the following must be added to beginning Retained Earnings to compute ending Retained Earnings?
Members have limited liability for debts only up to the extent of their investment in the LLC.
Which of the following statements is TRUE for a limited liability company?
The general partner has unlimited liability for the debts of the partnership.
Which of the following statements is TRUE for a limited liability partnership?
The partnership pays no federal income taxes.
Which of the following statements is TRUE for a limited liability partnership?
For accounting purposes, a proprietorship is separate from the proprietor.
Which of the following statements is TRUE for a proprietorship?
IFRS has been adapted in the United States.
Which of the following statements is FALSE?
Dividends reduce retained earnings.
Which of the following statements is TRUE?
All of the above are true.
Which of the following statements regarding a trial balance is TRUE?
the payment of an accounts payable
Which of the following transactions includes a credit to cash?
The company pays a long−term loan.
Which of the following would be considered a financing activity that decreases cash on the statement of cash flows?
Purchases and sales of long−term assets are financing cash flows.
Which statement about the statement of cash flows is FALSE?
Prepaid expenses include accrued interest payable.
Which statement below is FALSE?
Individuals, corporations, partnerships, or other types of entities can be partners.
Which statement is TRUE about partnerships?
U.S. Generally Accepted Accounting Principles are used by many countries around the world.
Which statement is FALSE?
corporation
Which type of business organization transacts much more business and is larger in terms of assets, income, and number of employees?
Income statement
Which statement(s) reports the revenues, gains, expenses, and losses of an entity?
the Board of Directors of the corporation determines if a dividend will be paid.
With regard to cash dividends:
$106,000
Yellow Company had a balance of $30,000 in Accounts Payable at the beginning of June, and purchased $105,000 of merchandise on account during the month. At the end of June, Yellow's Accounts Payable balance was $29,000. What amount did Yellow pay on account during June?
$106,000
Yellow Company had a balance of $31,000 in Accounts Payable at the beginning of June, and purchased $104,000 of merchandise on account during the month. At the end of June, Yellow's Accounts Payable balance was $29,000. What amount did Yellow pay on account during June?
True
the statement of retained earnings shows both the beginning and ending balances of retained earnings.
is all of the above. (is often called the language of business., measures business activities., processes data into reports and communicates the data to decision makers.)
Accounting:
partnership
Owners' equity consists of two accounts, Amy Jones, Capital, and Mindy Lenz, Capital. This indicates the entity is a:
True.
Owners' equity is called stockholders' equity for a corporation.
True.
Stockholders' equity is the stockholders' interest in the assets of the corporation.