Accounting Basics

Determine the net income of a company for which the following information is available for the month of July. Employee salaries expense $184,000 Interest expense 14,000 Rent expense 24,000 Consulting revenue 416,000

$194,000.

Use the following information for Meeker Corp. to determine the amount of equity to report. Cash$ 83,000 Buildings 131,500 Land 223,000 Liabilities 138,000 $575,500. $312,500. $437,500. $36,500. $299,500.

$299,500.

A company reported total equity of $165,000 at the beginning of the year. The company reported $230,000 in revenues and $175,000 in expenses for the year. Liabilities at the end of the year totaled $102,000. What are the total assets of the company at the end of the year? $55,000. $102,000. $118,000. $230,000. $322,000.

$322,000

On May 31 of the current year, the assets and liabilities of Riser, Inc. are as follows: Cash $22,000; Accounts Receivable, $7,500; Supplies, $850; Equipment, $12,250; Accounts Payable, $9,550. What is the amount of stockholders' equity as of May 31 of the current year? Multiple Choice $52,150. $13,100. $22,000. $33,050. $42,600.

$33,050

Zippy had cash inflows from operations of $78,500; cash outflows from investing activities of $63,000; and cash inflows from financing of $41,000. The net change in cash was: $56,500 increase. $56,500 decrease. $182,500 decrease. $182,500 increase. $25,500 decrease.

$56,500 increase. Net Change in Cash = Cash Flows from Operating Activities + Cash Flows from InvestingActivities + Cash Flows from Financing Activities Net Change in Cash = $78,500 + ($63,000) + $41,000; Net Change in Cash = $56,500

The listing of all of the accounts available for use in a company's accounting system is known as the __________ .

Chart of Accounts

Assets are usually reported on the balance sheet at which amount? Cost Current Market Value Expected Selling Price

Cost

Entries to revenues accounts such as Service Revenues are usually Debits Credits

Credit

When a company pays a bill, the account Cash will be Debited Credited

Credit

Which term is associated with "right" or "right-side"? Debit Credit

Credit

Generally when revenues are involved in a transaction, a revenue account will be Debited Credited

Credited Revenues are almost always credited. The exceptions would be closing entries and possibly correcting and adjusting entries.

Entries to expenses such as Rent Expense are usually Debits Credits

Debit

What will usually cause an asset account to increase? Debit Credit

Debit

When cash is received, the account Cash will be Debited Credited

Debit

Which term is associated with "left" or "left-side"? Debit Credit

Debit

Generally when an expense is involved in a transaction, an expense will be Debited Credited

Debit Expenses are almost always debited. The exceptions would be closing entries and possibly correcting and adjusting entries.

Under the accrual basis of accounting, expenses are reported in the accounting period when the Cash Is Paid Expense Matches The Revenues Or Is Used Up

Expense matches the revenues, or is used up

The financial statement that reports the revenues and expenses for a period of time such as a year or a month is the Balance Sheet Income Statement Statement Of Cash Flows

Income Statement

Obligations (amounts owed) are reported on the balance sheet and are referred to as __________ .

Liabilities

Unearned Revenues is what type of account? Asset Liability Stockholders' (Owner's) Equity

Liability The company that is to perform the service or is to deliver the product has received the cash in advance and therefore has an obligation (liability) to deliver the service or the product.

Revenues minus expenses equals __________ .

Net Income

If a company uses $1,480 of its cash to purchase supplies, the effect on the accounting equation would be: Assets increase $1,480 and liabilities decrease $1,480. One asset increases $1,480 and another asset decreases $1,480, causing no effect. Assets decrease $1,480 and equity decreases $1,480. Assets decrease $1,480 and equity increases $1,480. Assets increase $1,480 and liabilities increase $1,480.

One asset increases $1,480 and another asset decreases $1,480, causing no effect.

Liabilities often have the word __________ in their account title.

Payable

If Houston Company billed a client for $14,000 of consulting work completed, the accounts receivable asset increases by $14,000 and: Accounts payable decreases $14,000. Accounts payable increases $14,000. Cash increases $14,000. Revenue increases $14,000. Revenue decreases $14,000.

Revenue increases $14,000.

Assets minus liabilities equals _________

SHE

Under the accrual basis of accounting, revenues are reported in the accounting period when the Cash Is Received Service Or Goods Have Been Delivered

Service/goods delivered

What will usually cause the liability account Accounts Payable to increase? Debit Credit

credit

If assets are $100,000 and liabilities are $32,500, then equity equals: Multiple Choice $32,500. $67,500. $100,000. $132,500. $232,500.

$100,000.

If a company is considering the purchase of a parcel of land that was acquired by the seller for $98,000 is offered for sale at $176,000, is assessed for tax purposes at $108,000, is considered by the purchaser as easily being worth $166,000, and is purchased for $163,000, the land should be recorded in the purchaser's books at: $108,000. $163,000. $164,500. $166,000. $176,000.

163K

Accounting entries involve a minimum of how many accounts? One Two Three

2

If equity is $419,000 and liabilities are $183,000, then assets equal: $236,000. $183,000. $419,000. $602,000. $1,021,000.

602,000

Rushing had income of $169 million and average total assets of $1,870 million. Its return on assets is: 9.0%. 90.4%. 11.0%. 111.0%. 18.1%.

9%

Resources owned by a company (such as cash, accounts receivable, vehicles) are reported on the balance sheet and are referred to as __________.

Assets

If a company receives $13,500 from a stockholder, the effect on the accounting equation would be: Multiple Choice Assets decrease $13,500 and equity decreases $13,500. Assets increase $13,500 and liabilities decrease $13,500. Assets increase $13,500 and liabilities increase $13,500. Liabilities increase $13,500 and equity decreases $13,500. Assets increase $13,500 and equity increases $13,500.

Assets increase $13,500 and equity increases $13,500.

If a company purchases equipment costing $3,300 on credit, the effect on the accounting equation would be: Multiple Choice Assets increase $3,300 and liabilities decrease $3,300. Equity decreases $3,300 and liabilities increase $3,300. One asset increases $3,300 and another asset decreases $3,300. Assets increase $3,300 and liabilities increase $3,300. Equity increases $3,300 and liabilities decrease $3,300.

Assets increase $3,300 and liabilities increase $3,300.

If the liabilities of a company increased $102,000 during a period of time and equity in the company decreased $33,000 during the same period, what was the effect on the assets? Assets would have increased $69,000. Assets would have decreased $69,000. Assets would have increased $135,000. Assets would have decreased $135,000. None of the above.

Assets would have increased $69,000.

The financial statement that reports the assets, liabilities, and stockholders' (owner's) equity at a specific date is the Balance Sheet Income Statement Statement Of Cash Flows

Balance Sheet