ACC Ch.11-14

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DEBIT Interest Expense CREDIT Interest Payable DEBIT Interest Expense CREDIT Interest Payable

Dec. 31, 2017 Prepares adjusting entries.

partnership

an association of 2 or more people to carry on as co-owners of a business for profit; passes its net income to the partners

payroll deductions

can either be Mandatory or Voluntary

Stock splits

do not change total stockholders' equity

liquidation of partnership

ends the life of the partnership

net pay

gross earnings - payroll deductions =

voluntary

include Charity, Retirement, United way, Union dues, Health & Life insurance, and Pension plans

mandatory

include FICA tax (social security & medicare) , Federal income tax, and State income tax

authorized stock

indicates the amount of stock that a corporation is authorized or approved to sell in the future

3 taxes from government agencies on employers

payroll tax expense results in 3 taxes ; FICA tax , Federal unemployment tax, and State unemployment tax

payroll

pertains to Salaries and Wages

wages

rate per hour

treasury stock

shares of the company's own stock, the company has gone into the market place and has bought back

outstanding stock

shares of the stock that are actually out in the market place ISSUED STOCK - TREASURY STOCK =

issued stock

shares that the corporation has actually sold

retained earnings

the net income that a corporation retains for future use.

paid-in capital

the total amount of cash/ other assets paid in to the corporation by stockholders in exchange for capital stock

gross earnings

total compensation earned by an employee ( wages and salaries, PLUS any bonuses and commissions.

accumulated depreciation

would not be recorded in the entry for the formation of a partnership?

not a current liability

(a) A note payable for $100,000 due in 2 years.

current liability

(b) A 10-year mortgage payable of $300,000 payable in ten $30,000 annual payments.

current liability

(c) Interest payable of $15,000 on the mortgage.

current liability

(d) Accounts payable of $60,000.

equity

2 sources of equity are Paid-in Capital ( common & preferred stock) and Retained Earnings

declaration date

The date on which a cash dividend becomes a binding legal obligation is on the

change the composition of stockholders' equity.

The effect of a stock dividend is to

increase liabilities and decrease retained earnings

The effect of the declaration of a cash dividend by the board of directors is to

3, 2, 1, 4.

The liquidation of a partnership is a process containing the following steps: 1 Pay partnership liabilities in cash. 2 Allocate the gain or loss on realization to the partners on their income ratios. 3 Sell noncash assets for cash and recognize a gain or loss on realization. 4 Distribute remaining cash to partners on the basis of their remaining capital balances. Identify the proper sequencing of the steps in the liquidation process.

contra stockholders' equity account

Treasury Stock is a(n)

authorized shares

Which of the following represents the largest number of common shares?

Limited liability of stockholders

Which of the following statements is not considered a disadvantage of the corporate form of organization?

dividend

a distribution of cash or stock to stockholders on a pro rata (proportional) basis types: Cash, Property, Stock

salaires

a monthly or yearly rate

False

T or F 1. A partnership is an association of three or more persons to carry on as co-owners of a business for profit.

False

T or F 2. The legal requirements for forming a partnership can be quite burdensome.

True

T or F 5. The act of any partner is binding on all other partners, even when partners perform business acts beyond the scope of their authority.

True

T or F 6. Each partner is personally and individually liable for all partnership liabilities.

False

T or F 7. When a partnership is dissolved, the assets legally revert to the original contributor.

True

T or F 8. In a limited partnership, one or more partners have unlimited liability and one or more partners have limited liability for the debts of the firm.

False

T or F 9. Mutual agency is a major advantage of the partnership form of business.

False

T or F 3. A partnership is not an entity for financial reporting purposes.

False

T or F 4. The net income of a partnership is taxed as a separate entity.

DEBIT Notes Payable Interest Payable Interest Expense CREDIT Cash

Apr. 1, 2018 Pays principal and interest to First National Bank.

current liability

Dividends Payable is classified as a(n)

DEBIT Notes Payable Interest Payable Interest Expense CREDIT Cash

Feb. 1, 2018 Pays principal and interest to Lyon County State Bank.

the market value.

Information that is not generally reported for each class of stock on the balance sheet is

DEBIT Cash CREDIT Notes Payable

July 1, 2017 Borrows $50,000 from First National Bank by signing a 9-month, 8% note.

DEBIT Cash CREDIT Notes Payable

Nov. 1, 2017 Borrows $66,000 from Lyon County State Bank by signing a 3-month, 6% note.

both dividends and assets in the event of liquidation

Preferred stockholders have a priority over common stockholders as to


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