accounting test 1

2063000

Ayayai Corp. has assets of $3578000, common stock of $939000, and retained earnings of $576000. What are the creditors' claims on their assets?

increase by 875 due to net income

In the closing process total revenues are determined to be $4,750 while total expenses are determined to be $3,875 and total dividends are $1,150. The retained earnings account will:

Reliability Principle

Data is reliable if it is verifiable and can be confirmed by an independent observer

Matching Principle

Revenues and expenses are matched according to the same performance period

expenses are understated; net income is overstated

Saira works for a sports franchise, which pays wages and salaries earned on a monthly basis. A new accountant was hired by the sports franchise in late May. Due to inexperience, the new accountant failed to accrue Saira's salary for May. What is the impact on the May 31 financial statements of the sports franchise?

debit unearned rent revenue $3120, credit rent revenue $3120

Tamarisk, Inc. received a check for $18720 on July 1, which represents a 6-month advance payment of rent on a building it rents to a client. Unearned Rent Revenue was credited for the full $18720. Financial statements will be prepared on July 31. Tamarisk's should make the following adjusting entry on July 31:

Going-concern concept

The entity will continue remain in operation for the foreseeable future

45,000

The financial statements for Harold Corporation contained the following information: Accounts receivable $ 5,000 Sales revenue 75,000 Cash 15,000 Salaries and wages expense 20,000 Rent expense 10,000 How much was Harold's net income?

that account will be debited in the ledger

if an account is debited in the journal entry then:

there could be an equal decrease in another asset

if an individual asset is increased, then: there could be an equal decrease in a specific liability. there could be an equal decrease in stockholders' equity. there could be an equal decrease in another asset. none of these answer choices are correct.

assets will increase

if services are rendered for cash, then: liabilities will decrease. liabilities will increase. assets will increase. stockholders' equity will decrease

10,000 decrease

if total liabilities decreased by $15,000 and stockholders' equity increased by $5000 during a period of time then total assets must change by what amount and direction during that same period?

revenues exceed expenses

net income will result during a time period when

in the order in which they are expected to be converted into cash

on a classified balance sheet, companies usually list current assets

prepaid expenses

payments of expenses that will benefit more than one accounting period are identified as

assets

resources owned by a business are referred to as

events that change a company's financial statements are recognized in the period they occur rather than in the period in which cash is paid or received.

under the accrual basis of accounting: events that change a company's financial statements are recognized in the period they occur rather than in the period in which cash is paid or received. net income is calculated by matching cash outflows against cash inflows. the ledger accounts must be adjusted to reflect a cash basis of accounting before financial statements are prepared under generally accepted accounting principles. cash must be received before revenue is recognized.

debits accounts receivable and credits service revenue

when a company has performed a service but has not yet received payment, it:

debit equal credits

when a trial balance balances, its an indication that:

analzye a transaction; record it in the journal; post it to the ledger

which of the following is the correct sequence of events? Record a transaction in the journal; analyze the transaction; post it to the ledger None of the answer choices provides the correct sequence Analyze a transaction; post it to the ledger; record it in the journal Analyze a transaction; record it in the journal; post it to the ledger

expenses increase stockholders' equity

which of the following statements is not true? Expenses increase stockholders' equity. Expenses are a negative factor in the computation of net income. Expenses have normal debit balances. Expenses decrease stockholders' equity.

dividends paid

which of the following would not appear on an income statement? interest expense net income dividends paid service revenue

Service Revenue

which of the following would not appear on the retained earnings statement? net income beginning retained earnings balance dividends service revenue

it contains only revenue and expense accounts

which of these statements about journal is false? It contains only revenue and expense accounts. It helps to locate errors because the debit and credit amounts for each entry can be readily compared. It discloses the complete effect of a transaction in one place. It provides a chronological record of transactions.

accounts receivable

management could determine that amounts due from customers by examining which ledger account?

credit a different asset account for $480

An accountant has debited an asset account for $960 and credited a liability account for $480. What can be done to complete the recording of the transaction? Nothing further must be done. Debit another asset account for $480. Credit a different asset account for $480. Debit a stockholders' equity account for $480.

Entity concept

An accounting entity is an organization that stands apart as a separate economic unit.

Cost principle

Assets and services acquired should be recorded at their historical cost

1280

Concord Corporation had the following transactions during 2016: • Sales of $8640 on account • Collected $3840 for services to be performed in 2017 • Paid $2080 cash in salaries for 2016 • Purchased airline tickets for $480 in December for a trip to take place in 2017 What is Concord's 2016 net income using cash basis accounting?

26320

Given the data below for a firm in its first year of operation, determine net income under the accrual basis of accounting. Cash received from customers $42300 Accounts receivable 11280 Cash paid for expenses 24440 Accounts payable (related to expenses) 2820 Prepaid rent for next period 6580

10320

Given the data below for a firm in its first year of operation, determine net income under the cash basis of accounting. Cash received from customers $38700 Accounts receivable 10320 Cash paid for expenses 22360 Accounts payable (related to expenses) 2580 Prepaid rent for next period 6020

24000

In 2017, Bombay Corporation had cash receipts of $21,000 and cash disbursements of $12,000. The company's ending cash balance at December 31, 2017 was $33,000. What was the beginning cash balance?

purchase of office equipmet for $8880, paying $5180 cash and isssuing a note payable for the balance

Nash's Trading Post, LLC had a transaction that caused a $3700 increase in both assets and total liabilities. This transaction could have been a(n): purchase of office equipment for $8880, paying $5180 cash and issuing a note payable for the balance. purchase of office equipment for $3700 cash. investment of $3700 cash in the business by the stockholders. repayment of a 3700 bank loan.

13680

Sheffield Corp. collected $18240 in May of 2016 for 4 months of service which would take place from October of 2016 through January of 2017. The revenue reported from this transaction during 2016 would be:

3814000

Swifty Corporation began the year with retained earnings of $941000. During the year, the company issued $1264000 of common stock, recorded expenses of $3513000, and paid dividends of $241000. If Swifty ending retained earnings was $1001000, what was the company's revenue for the year?

debit rent expense $3120, credit prepaid rent $3120

The balance in the prepaid rent account before adjustment at the end of the year is $9360 and represents three months rent paid on December 1. The adjusting entry required on December 31 is:

book value

The difference between the balance of a plant asset account and the related accumulated depreciation account is termed:

235000

Vaughn Manufacturing began the year by issuing $117000 of common stock for cash. The company recorded revenues of $1194000, expenses of $959000, and paid dividends of $66000. What was Vaughn net income for the year?

Income statement

Which financial statement tells us about company performance

a new balance in the accounts affected by the transaction

a complete journal entry does not show

is increased by credits

a revenue account: is increased by credits. is decreased by credits. has a normal balance of a debit. is increased by debits.

expenses and assets

accounts with normal debit balances include

increase assets and increase revenues

adjustmetns for accrued revenues: increase assets and increase revenues. increase assets and increase liabilities. decrease assets and decrease revenues. decrease liabilities and increase revenues.

decreases stockholders' equity

an expense

707000

swifty corporation began the year with retained earnings of $659000. during the year, the company recorded revenues of $567000, expenses of $382000, and paid dividends of $137000. what was swifty retained earnings at the end of the year?

understated asset and an understated revenue

the accounts of a business, before an adjusting entry is made to record accrued revenue, reflect an:

both the retained earning statement and the balance sheet

the ending retained earnings balance appears on

decreases assets and liabilities

the payment of a liability: increases assets and decreases liabilities. decreases assets and increases liabilities. decreases assets and liabilities. decreases assets and stockholders' equity.

leaves total assets unchanged

the sale of an asset on credit for what it cost

liability

the unearned service revenue account is classified as a

the adjusted trial balance lists the account balances segregated by assets and liabilities

which statement is incorrect concerning the adjusted trial balance? The adjusted trial balance lists the account balances segregated by assets and liabilities. The company prepares the adjusted trial balance after it has journalized and posted the adjusting entries. The adjusted trial balance provides the primary basis for the preparation of financial statements. An adjusted trial balance proves the equality of the total debit balances and the total credit balances in the ledger after all adjustments are made.

balance sheet

which statement presents information as of a specific point in time? retained earnings statement income statement statement of cash flows balance sheet