Financial Accounting I JPCatholic
Which of the following statements about normal account balances is correct?
Assets have debit balances and liabilities have credit balances.
Who has primary responsibility for making sure that a company's financial statements follow GAAP?
Management
If a company borrows money from a bank and signs an agreement to repay the loan several years from now, in which account would the company report the amount borrowed?
Notes Payable (long-term)
In the U.S., public companies must be audited by independent auditors using rules approved by the:
Public Company Accounting Oversight Board (PCAOB).
Expenses are reported on the:
income statement in the time period in which they are incurred.
A company's financial records at the end of the year included the following amounts: Cash$ 70,800Accounts Receivable28,800Supplies4,800Accounts Payable10,800Notes Payable5,400Retained Earnings, beginning of year17,800Common Stock48,000Service Revenue47,800Wages Expense8,800Advertising Expense5,800Rent Expense10,800 What is the amount of total assets to be reported on the Balance Sheet at the end of the year?
$104,400
Coast Company has 5,000 items of building supplies on hand that cost $150,000; a bill related to these supplies totaling $50,000 from a vendor has not yet been paid. The company expects to earn $400,000 for its services when it uses the building supplies. The company's balance sheet would include an asset, Supplies, in the amount of:
$150,000
Cash had a beginning balance of $70,700. During the month, Cash was credited for $16,180 and debited for $18,840. At the end of the month, the balance is:
$73,360 debit.
Liabilities reported on the balance sheet include:
Accounts Payable, Notes Payable, and Salaries and Wages Payable.
The Accounts Payable account:
. has a normal credit balance.
Which of the following would be listed as a current liability?
Accounts Payable
Which of the following are the three basic elements of the balance sheet?
Assets, liabilities, and stockholders' equity.
Who has first claim to a business's assets should the company go out of business?
Creditors
Shaylee, Incorporated borrowed $62,000 from a bank, depositing those funds in its bank account and signing a formal agreement to repay the loan in two years. What is the correct journal entry for this transaction?
Debit cash and credit notes payable for $62,000
Which one of the following is not a current asset?
Equipment
In the U.S., Generally Accepted Accounting Principles (GAAP) are established by the:
Financial Accounting Standards Board (FASB).
Which of the following is the set of laws enacted by the government to strengthen corporate reporting in response to the Enron, WorldCom and other frauds?
Sarbanes-Oxley Act
Which of the following expressions of the accounting equation is correct?
Stockholders' Equity = Assets − Liabilities
Consider the following journal entry: debit Software18,000credit Cash7,200credit Notes Payable10,800 Which of the following explanations best describes this journal entry?
The company buys $18,000 of software, pays cash of $7,200, and signs a note for $10,800.
Which of the following is a characteristic of a partnership?
The profits, taxes, and legal liability are the responsibility of two or more owners.
Which of the following statements about the debit/credit framework is correct?
The total value of credits in all accounts must always equal the total value of debits in all accounts.
What is the main goal of GAAP?
To ensure that the financial information produced by companies is useful to existing and potential investors and other parties in decision making.
An economic resource that is controlled by a company and will provide future benefits is referred to as:
an asset.
The Accounts Receivable account:
is increased by a debit.
Transactions are entered into a ____________ each day they occur.
journal
The obligations and debts of a business are referred to as:
liabilities
Internal users of financial data include:
management.
A sole proprietorship is:
owned and operated by one individual.