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