Accounting week 1

Al Dunn Bakery bought a new oven for $ 1,380. Al paid $300 as a cash down payment and will pay the balance in 30 days. Total assets increased by

$1,080

Total assets of $23,000, total owners' capital is $11,000. What are the liabilities?

$12,000

Total liabilities is $10,000, total owner's equity is $4,000. What are total assets?

$14,000

If Liabilities are $4,000 and owner's equity is $15,000, assets are

$19,000

On Dec. 1, 2013, Geneva Jordan opened her new business with the following assets and liabilities. Accounts Payable $1,100 Cash $ 3,950 Equipment $26,000 Prepaid Rent $6,000 Loans Payable $ 15,500 Supplies $ 1,250 What must total owner's equity equal in order from A=L+ OE

$20,800

Total assets of Douglas Fuhr Furniture Co. are $36,000 and the total liabilities are $12,000. What is the amount of the owners's equity?

$24,000

Equipment that cost $4,000 is purchased by issuing a check for $500 and the remainder on account due in 30 days, A credit to Accounts Payable would be made for how much?

$3,500

Total liabilities is $10,000, total owner's equity is $4,000. What are total assets?

$6,000

Accounting is considered the language of business because it helps answers questions important to

(All the Above) owners, managers, and government agencies

To record equipment purchased for cash involves

A Credit to Cash

An Income Statement is all of the following except

A statement of revenues less withdrawals and expenses.

After all posting have been made, the totals of the balances in the accounts receivable subsidiary ledger should equal the balance of the ______ account in the general ledger

Account Receivable

All financial statements submitted to the SEC by publicly owned corporations much include an auditor's report prepared by

An independent certified public accountant

We can rewrite the fundamental accounting equation as:

Assets + expenses + drawing = liabilities + revenues + capital

The fundamental accounting equation can be rewritten as:

Assets - Liabilities = Owner's Equity

Which financial statement is a representation of the accounting equation?

Balance sheet

The Statement of Owner's equity is calculated as the follows:

Beginning capital + net income - withdrawals + additional investments = ending capital

An independent accountant who provides accounting services to the public for a fee is a

CPA

The owners investment or equity in a business is called

Capital

Examples of assets are

Cash and accounts receivable

Accounts with normal debit balances are (Select all that apply)

Cash, supplies, Prepaid Insurance, Drawing , Utilities Expense

The sales Returns & Allowances account is a

Contra-revenue account

The owner's initial investment of cash into the company is recorded as a _____ to the owner's capital account

Credit

What must the balance of the capital account be for the fundamental accounting equation to balance?( Cash= 10,000) ( Act. Payable= 3,000) (Drawing= 1,000) (Act. Rec. = 7,000) (Supplies= 2,000) whats CAPITAL

Credit balance of $17,000

What must liabilities be to ensure the fundamental accounting equation is Balanced? ( Assets= 25,000) ( LB. ?) ( Owner's Equity = 9,000)

Credit of 14,000

What must liabilities be to ensure the fundamental accounting equation is balanced?

Credit of 14,000

The sales returns and allowances account has a normal ______ balance.

Debit

To record the payment on account we would ______ account payable

Debit

HUGH SNOW returns merchandise to Farley Co. the entry on the books of Farley company to record the return of merchandise from Hugh snow would include a :

Debit Sales Returns and Allowances

A business purchases supplies on account. The journal entry to record this transaction is

Debit Supplies; Credit Accounts Payable

Which of the following entries records the withdrawal of cash for personal use by TY KNOTT, the owner of a business?

Debit Ty Knott, Drawing, and Credit Cash

A firm paid cash to apply against a debt. To record this transaction, the accountant would

Debit accounts payable, and credit cash

What must the balance of the drawing account be for the fundamental accounting equation to balance? (Cash 4,000) ( Act. Pay.=2,000) ( Drawing= ?) ( act. rec. 3,000) (Supplies=1,500) (Capital= 9,000) WHATS DRAWING?

Debit balance of $2,500

Prepaid Rent has a debit entry of $5,000 and a credit entry of $2,000. What is the balance of this account?

Debit balance of $3,000

What must the balance of the drawing account be for the fundamental accounting equation to balanced? cash(4,000) act. Pay ( 2,000) Act. Rec ( 3,000) Supplies ( 1,500) Capital ( 9,000)

Debit balance of 2,500

Charts? Assets ? LB.- 5,000 Owner's 22,000

Debit of 27,000

When expenses are paid, the transaction is recorded as a decrease to an expense account. This equates to a(n)

Decrease in equity

When the owner takes a draw for personal use, this will

Decrease owners' equity

If the owner takes cash out of the business for personal use, the withdrawal should be recorded as an

Drawing account

When equipment is purchased with cash

Equipment is increased and cash is decreased

_______ involves the outflow of money or the use of assets

Expenses

accounting/Accountants provides ______ to various parties so they can make business decisions.

Financial Information

A firm issues periodic reports called

Financial Statements

Accountants provide _______ to various parties so they can make business decisions

Financial information

When there are several entries to one or both sides of a t-account, the total of those entries is entered in pencil . This is called

Footing

______ accountants work on the staff of federal, state, or local governmental units

Governmental

Which of the following is NOT a type of information communicated by the financial statements?

How long the business has been in operation

Ginger Yale Ice Company receives money from a customer on account. Recording this transaction will

Increase Cash

Credits are used to record

Increase in liabilities and owner's equity

Credits record

Increase in liabilities and owner's equity

Our company performs services for credit clients. This is recorded as an increase to an asset account and a(n)

Increase to revenues

When a utility bill is paid with cash, cash decreased and utilities expenses is

Increased

Debits are used to record

Increases in assets

Net Income

Increases owners' equity

which of the following is NOT an area in which accountants usually practice

Industrial Accounting

Which of the following is NOT a service of public accounting firms?

Investment Services

The financial affairs of a business and the financial affairs of the owners should be

Kept totally separate

Debits are recorded on the ______ side of the T-account:

Left

Our company purchases equipment on account due in 30 days. When the payment is finally made,

Liabilities decrease

Owners and managers need financial information in order to

Make decisions

The area of accounting that involves the preparation of internal reports for a firm's executives and the analysis of the data in these reports to aid in decision making is known as

Managerial Accounting

The balance sheet shows each of the following except the

Owner's Investment

Accounting is considered the language of business because it helps answer questions important to

Owners, Managers, and Government Agencies ( All the Above)

After the transactions have been posted, the next step in the accounting cycle is to

Prepare the worksheet

_____ accounting firms provide three major types of services: auditing, tax accounting, and management advisory services

Public

accounts with normal credit balances are (select all that apply)

Service Fees, Capital, Account Payable

Accounts with normal credit balances are (select all that apply)

Service Fees, Capital, Accounts Payable

Tax accounting involves tax compliance and _____

Tax Planning

When using the fundamental accounting equation, and accountant must make sure that total assets are always equal to

Total liabilities and owner's equity

Revenues are recognized when:

When goods are sold or services rendered

To record the purchase of equipment on account involves

a credit to Accounts Payable

the entry to record the payment of a utility bill is

a debit to utilities expense and credit to cash

amounts that a business must pay in the future are known as

account payable

what is the total assets be to ensure the fundamental accounting equation is balanced?

add the owner's equity and the supplies together

The T-accounts have the following balances: What must the balance of the Capital Account be for the fundamental accounting equation to balance?

credit balance of $18,000

what must the balance of the account payable account be for the fundamental accounting equation to balance? (cash 7,000) (drawing 3,000) Act. Rec. ( 2,000) supplies ( 2,000) Captial (5,000)

credit balance of 9,000

The sales returns and allowances account has a normal _____ balance

debit

to record payment of an expense, we would _____ an expense account

debit

to record the payment on account we would _____ account payable

debit

What must total assets be to ensure the fundamental accounting equation is balanced?

debit of 27,000

When revenue is earned from charge-account sales, the accountant

debits accounts receivable and credits a revenue account

When there are several entries to one or both sides of a t-account, the total of those entries is entered in pencil, this is called

footing

credits are used to record

increase in liabilities and owner's equity

The normal balance of an account is the

increase side

when revenue are earned, the owner's equity is effectively

increased

when revenues are earned, the owner's equity is effectively

increased

the normal balance of an account is the

increased side

Credits are used to record

increases in liabilities and owner's equity

debit is on the

left

The balance of a t-account

on the side with the greater total

After the worksheet has been completed, the next step in the accounting cycle is to

prepare the financial statements

When a sale occurs, an increase to assets and increase to ______ is recorded

revenue

credit is on the

right

The balance sheet shows

the financial position of a business at a given time

If a firm does not have a sale returns and allowances journal, the entries for these transactions are made in

the general journal

If a firm does not have a sales returns and allowances journal, the entries for these transactions are mad in

the general journal

The financial statement that is prepared first is

the income statement

The income statement shows

the results of operations for a period of time