Accounting 101
$750
. A company purchased new computers at a cost of $14,000 on September 30. The computers are estimated to have a useful life of 4 years and a salvage value of $2,000. The company uses the straight-line method of depreciation. How much depreciation expense will be recorded for the computers for the first year ended December 31?
Statement of owner's equity
. A financial statement that reports the changes in equity over the reporting period; including increases such as owner investment and net income and for decreases such as owner withdrawals or net loss
Ethics
Beliefs that distinguish right from wrong
Revenues
Gross increase in equity from a company's earnings activities
Partnership
Has unlimited liability for its partners.
Increased $22,000
If the assets of a business increased $89,000 during a period of time and its liabilities increased $67,000 during the same period, equity in the business must have what?
Increased $45,000
If the liabilities of a business increased $75,000 during a period of time and the owner's equity in the business decreased $30,000 during the same period, the assets of the business must have what?
Business entity assumption
Marian Mosely is the owner of Mosely Accounting Services. Which accounting principle requires Marian to keep her personal financial information separate from the financial information of Mosely Accounting Services
$4,000
On April 30, a three-year insurance policy was purchased for $18,000 with coverage to begin immediately. What is the amount of insurance expense that would appear on the company's income statement for the year ended December 31?
$300,000
On January 1, Southwest College received $1,200,000 in Unearned Tuition Revenue from its students for the spring semester, which spans four months beginning on January 2. What amount of tuition revenue should the college recognize on January 31?
Internal users
Persons using accounting information who are directly involved in managing the organization.
External users
Persons using accounting information who are not directly involved in the running of the organization
Items that require adjusting entries
Prepaid expenses, depreciation, accrued expenses, unearned revenues, and accrued revenues are all examples of what?
Financing activities
Provide the means organizations use to pay for resources such as land, buildings, and equipment to carry out plans
Ledgers
Source documents include all of the following except
Business Entity Assumption
The accounting assumption that requires every business to be accounted for separately from other business entities, including its owner or owners is known as the
Cost principle
The accounting principle that requires assets and services to be recorded initially at the cash or cash-equivalent amount given in exchange
Investing activities
The acquisition and disposing of resources that an organization uses to acquire and sell products and services
Equity
The difference between a company's assets and its liabilities, or net assets is
Revenues
The increase in equity from a company's earning activities
Record internal transactions and events
The main purpose of adjusting entries is to what?
Recordkeeping
The part of accounting that involves recording transactions and events, either electronically or manually
Depreciation expense
The periodic expense created by allocating the cost of plant and equipment to the periods in which they are used, representing the expense of using the assets,
$12,225
. Andrea Conaway opened Wonderland Photography on January 1 of the current year. During January, the following transactions occurred and were recorded in the company's books: 1. Conaway invested $13,500 cash in the business. 2. Conaway contributed $20,000 of photography equipment to the business. 3. The company paid $2,100 cash for an insurance policy covering the next 24 months. 4. The company received $5,700 cash for services provided during January. 5. The company purchased $6,200 of office equipment on credit. 6. The company provided $2,750 of services to customers on account. 7. The company paid cash of $1,500 for monthly rent. 8. The company paid $3,100 on the office equipment purchased in transaction #5 above. 9. Paid $275 cash for January utilities.Based on this information, the balance in the cash account at the end of January would be what?
Assets
. Resources owned or controlled by a company that are expected to yield future benefits.f. A financial statement that reports the changes in equity over the reporting period; including increases such as owner investment and net income and for decreases such as owner withdrawals or net loss.
Ledger
A collection of all accounts and their balances used by a business
Overstate net income by $28,000
A company made no adjusting entry for accrued and unpaid employee wages of $28,000 on December 31. This oversight would:
$2,900
A company's Office Supplies account shows a beginning balance of $600 and an ending balance of $400. If office supplies expense for the year is $3,100, what amount of office supplies was purchased during the period?
A decrease in an asset account
A credit is used to record what?
Recorded as a credit to an unearned revenue account
A liability created by the receipt of cash from customers in payment for products or services that have not yet been delivered to the customers is what?
Going-concern principle
A principle that requires financial statements to reflect the assumption that the business will continue operating instead of being closed or sold
Objectivity principle
A principle that requires the information in financial statements to be supported by independent unbiased evidence
An unadjusted trial balance
A trial balance prepared before any adjustments have been recorded
Commissions Earned.
All of the following are liability accounts
Ethics do not affect the operations or outcome of a company
All of the following are true regarding ethics except
Accounting
An information and measurement system that identifies, records and communicates relevant reliable and comparable information about an organization's business activities.
Net assets
Another term for equity
Owner withdraw
Assets an owner takes from the company for personal use
Accounts receivable
Assets created by selling goods and services on credit
Accrued revenues
At the end of one accounting period often result in cash receipts from customers in the next period.
Social responsibility
Concern for the impact of actions on society
$83,900
During the month of March, Cooley Computer Services made purchases on account totaling $43,500. Also during the month of March, Cooley was paid $8,000 by a customer for services to be provided in the future and paid $36,900 of cash on its accounts payable balance. If the balance in the accounts payable account at the beginning of March was $77,300, what is the balance in accounts payable at the end of March?
Days
The time period assumption assumes that an organization's activities can be divided into specific time periods including all of the following except what?
Accumulated Depreciation
The total amount of depreciation recorded against an asset or group of assets during the entire time the asset or assets have been owned:
Operating activities
The use of resources to research, develop, purchase, produce, distribute, and market products and services
Matching principle
Which of the following accounting principles prescribes that a company record its expenses incurred to generate the revenue reported?
Promises of future payment by the buyer are called accounts receivable
Which of the following statements is correct?
Adjusting entries affect the cash account
Which of the following statements is incorrect?
$43,300
Zed Bennett opened an art gallery and as a dealer completed these transactions:1. Started the gallery, Artery, by investing $40,000 cash and equipment valued at $18,000. 2. Purchased $70 of office supplies on credit.3. Paid $1,200 cash for the receptionist's salary.4. Sold a painting for an artist and collected a $4,500 cash commission on the sale.5. Completed an art appraisal and billed the client $200.