Accounting Principles I DIB

Mulberry Company collected​ $7,000 from one of its​ customers, the amount owed from the previous month. How does this affect the accounting equation for​ Mulberry?

Assets incresae by $7,000 and assets decrease by $7,000

In a statement of​ owner's equity, decreases in​ Owner, Capital result from​ ________.

Net losses

Which of the following appears on both the statement of​ owner's equity and the balance​ sheet?

Owner, Capital, ending balance

Which of the following is true of the​ owner's capital​ account?

The​ owner's capital account decreases with the​ owner's withdrawals.

​Gena's Cleaning Services performs services for its customers during March. Payments for the March services are received in June. How does the transaction for the collection of cash from customers affect the accounting equation of​ Gena's Cleaning​ Services?

Total Assets remain the same

As long as an increase and decrease of the same amount are recorded on one side of the accounting​ equation, the accounting equation remains in balance.

True

Financial accounting focuses on information for decision makers outside of the​ business, such as creditors and taxing authorities.

True

If a transaction does not involve​ cash, such as the purchase of supplies on​ account, it will not be reported on the statement of cash flows.

True

The balance sheet is prepared after the statement of​ owner's equity.

True

Metropolitan Casting Services started the year with total assets of​ $130,000 and total liabilities of​ $60,000. The company is a sole proprietorship. The revenues and the expenses for the year amounted to​ $130,000 and​ $50,000, respectively. During the​ year, there were no new capital contributions and the owner withdrew​ $60,000. Calculate the amount of increase or decrease in​ owner's equity for the year.

a $20,000 increase

The assets of Star Company are​ $110,000 and the total liabilities are​ $10,000. The equity is​ ________.

$100,000

The equity of Alliance Company is​ $100,000 and the total liabilities are​ $10,000. The total assets are​ ________.

$110,000

Precision Camera Services started the year with total assets of​ $120,000 and total liabilities of​ $40,000. The company is a sole proprietorship. The revenues and the expenses for the year amounted to​ $140,000 and​ $50,000, respectively. During the​ year, there were no new capital contributions and the owner withdrew​ $45,000. What is the amount of​ owner's equity at the end of the​ year?

$125,000

The total assets and the total liabilities of Atlas Financial Services are shown below. There were no capital contributions and no withdrawals during the year. Total Assets Total Liabilities Beginning of year ​$400,000 ​$295,000 End of year ​440,000 ​320,000 What was the amount of net income for the​ year?

$15,000

Johnson Waterworks Company provides plumbing services. The company is a sole proprietorship. Transactions during the first year of operations are provided below. ​a) The​ owner, Mitchell​ Johnson, contributed​ $14,000 cash in exchange for capital. ​b) Paid​ $1,100 for equipment to be used for plumbing repairs. ​c) Borrowed​ $13,000 from a local bank and deposited the money in the checking account. ​d) Paid​ $300 in rent for the year. ​e) Paid​ $200 for plumbing supplies to be used on various jobs next year. ​f) Completed a plumbing repair for a law firm and received​ $3,300. Calculate the amount of total assets at the end of the first year. Assume the plumbing supplies of​ $200 are left at the end of the year.

$30,000

The net income of Thomas Company was​ $73,000 for this year. The beginning balance of​ Thomas, Capital was​ $32,000 and the ending balance was​ $71,000. There were no new capital contributions during the year. What was the amount of withdrawals during the​ year?

$34,000

Diamond Company had the following transactions during​ June: Performed services for​ $3,000 on​ account; received cash on​ account, $8,000; paid​ $900 for repair​ expense; paid​ $1,600 to a supplier that it owed from the previous month. What is the combined effect on Cash of these June​ transactions?

$5,500 increase

Following is a list of account balances of Lincoln Lawn Services as of December​ 31, after the first year of operations. Accounts Receivable ​$7,000 Accounts Payable ​6,000 Salaries Expense ​6,000 Repairs Expense 900 Truck ​8,000 Equipment ​11,000 Notes Payable ​26,000 Cash ​8,000 Supplies Expense ​11,000 Service Revenue ​26,000 Gasoline Expense ​7,500 Salaries Payable ​1,200 Calculate the net income.

$600

Gulf Waterworks Company provides plumbing services. The company is a sole proprietorship. Transactions during the first year of operations are given below. ​a) The​ owner, Jason​ Robinson, contributed​ $6,000 cash in exchange for capital. ​b) Paid​ $5,000 cash for equipment to be used for plumbing repairs. ​c) Borrowed​ $26,000 from a local bank and deposited the money in the checking account. ​d) Paid​ $600 rent for the year. ​e) Purchased​ $1,800 of office supplies on account. ​f) Completed a plumbing repair project for a local lawyer and received​ $3,200 cash. Calculate the amount of total​ owner's equity at the end of the first year after recording the transactions. Assume office supplies of​ $1,800 are left at the end of the year

$8,600

Jones Supply Services paid​ $350 cash, the amount owed from the previous​ month, to a materials supplier. Which of the following accounts​ decrease?

Accounts Payable

​________ represent the right to receive cash in the future from customers for goods sold or for services performed.

Accounts Receivable

The economic resources of a business such as​ furniture, building, and land are its​ ________.

Assets

Which of the following financial statements is used to report the economic​ resources, debt, and overall financial position of a​ company?

Balance Sheet

An accounting firm collected cash on account. As a result of this​ transaction, assets and revenues increase.

False

An​ owner's withdrawal increases​ owner's equity.

False

Equity decreases with expenses and revenues.

False

Janice Wilford contributed $50,000 cash to JW Company in exchange for capital. JW Company is a sole proprietorship. As a result of this transaction, assets and revenues will increase.

False

Managerial accounting focuses on providing information for external decision makers.

False

The balance sheet of a business summarizes an entity's revenues and expenses.

False

The field of accounting that focuses on providing information for external decision makers is​ ________.

Financial Accounting

Which of the following financial statements reports expenses in decreasing order of their​ amounts, by stating the largest expense​ first?

Income Statement

Which of the following is the correct order of preparation of financial​ statements?

Income statement, statement of​ owner's equity, balance sheet, statement of cash flows

Lamar Company originally purchased land for​ $33,000. It later sold the land for​ $33,000 in cash. Which of the following is true of the effect of the sale of land on the accounting​ equation?

The amount of total assets remains the same

Fred​ Jones, the sole owner of a​ business, withdraws cash for his personal use. How does this transaction affect the accounting​ equation?

The assets decrease and equity decreases