acounting final exam

If a company has current assets of $2,100,000 and current liabilities of $500,000, calculate its working capital.

$1,600,000

The following balances are provided: Cash $234,000 Accounts Payable $97,000 Inventories 121,000 Notes Payable (due 2018) 211,000 Land 453,000 Accounts Receivable 46,000 Calculate Current Assets.

$401,000

If a company has assets of $5,000,000, liabilities of $3,000,000, and retained earnings of $1,200,000, how much is total stockholders' equity?

$2,000,000

The company reported the following information for the year ended December 31, 2019: Net income $100,000 Dividends 6,000 Retained earnings at December 31, 2019 $120,000 What was the balance of Retained Earnings at January 1, 2019?

$26,000

The company reported the following items on its financial statements for the year ended December 31, 2019: Sales $780,000 Cost of Sales $700,000 Selling, general & administrative expense 20,000 Other Expense 15,000 Dividends 5,000 Income Tax Expense 12,500 What amount will be reported as Retained Earnings on the Balance Sheet at December 31, 2019, assuming this is the first year of operations?

$27,500

The company reported the following items on its financial statements for the year ended December 31, 2019: Sales $780,000 Cost of Sales $700,000 Selling, general & administrative expense 20,000 Other Expense 15,000 Dividends 5,000 Income Tax Expense 12,500 What is the company's Net Income for the current year?

$32,500

Cozy Corporation purchased supplies at a cost of $15,000 during the year. At January 1, supplies on hand were $5,000. At December 31, supplies on hand are $2,000. Calculate supplies expense for the year.

18,000

Which of the following statements best describes the effects of recognizing revenue earned by a business entity?

Assets and stockholders' equity increase when either cash or credit sales are made.

What shows the end of the year cash balance for a business entity?

Balance Sheet and Statement of Cash Flows

What represents one of the basic financial statement models?

Beginning Retained Earnings + Net Income − Dividends = Ending Retained Earnings

Net Income Equation

Revenues - Expenses

assets =

Liabilities + Owner's Equity liabilities + capital liabilities + stockholders equity

What describes the term "retained earnings" of a company?

The accumulated net income of a company that has not been distributed to owners in the form of dividends.

Stockholders' Equity

The owners' claim to assets. common stock + retained earnings assets-liabilities

Under accrual accounting when is revenue recognized?

When earned, and expenses when incurred.

what classifies as current liabilities

accounts PAYABLE income tax payable notes payable (due in 3 months) salaries and wages payable

what classifies as a current asset

accounts RECEIVABLE unearned rev inventory cash prepaid insurance short term stock investments supplies

Ending Retained Earnings

beginning retained earnings + rev - expenses

June 1 - Purchased two new maintenance carts on account at $750 each. Payment is due in 30 days June 8- Accepted $500 of advance payments from customers for services to be provided next month June 15- Received the utility bill for $300. Payment is due in 30 days June 20Billed customers $1,500 services provided. Payment is due in 30 days. June 30- Received $500 from customers who were billed earlier What journal entry is required to record the purchase of the carts?

equipment - 1500 accounts payable - 1500

what order do you prepare financial statements in

income statement statement of retained earnings balance sheets statement of cash flows

What would be added to the company's cash balance on a bank reconciliation?

interest earned on the bank account

long term liabilities

mortgage payable

credit

right side accounts payable retained earnings sales rev common stock service rev

revenue

the amount charged to customers for goods and services sold to them increased by crediting them recorded when a sale is made on credit

financial accounting is

the area of accounting principally concerned with reporting to external users

working capital=

current assets - current liabilities

current ration=

current assets/current liabilities

What will not cause a trial balance to be out of balance?

A credit entry is posted to the wrong account, but still as a credit.

if total liabilities increased by 15,000 and stockholders equity increased by 5,000 during a time period, then total assets must change by what amount and direction during that same time period

20,000

If the end-of-year supplies on hand totaled $200, and purchases totaled $300, and supplies on hand at the beginning of the year amounted to $100, how much will be reported as supplies expense for the current year?

200

Carlock Systems received a 6-month, 12% note for $50,000 from a customer on November 1, 2019. The note is due on April 30, 2020. Assuming the company's accounting period ends on December 31, how much interest revenue should be recognized during 2019 and 2020?

2019 2020 $1,000 $2,000

accounting is

an information system that provides useful information to people who make rational investment, credit, and similar decisions to help them reach better decisions

current assets

items that can or will be converted into cash within one year

debit

left side inventory accounts receivable equipment expenses dividends

Expanded Accounting Equation

liabilities + common stock + ended retained earnings

Current Liabilities

liabilities due within a short time, usually within a year

plant and equipment is

long-term assets held for use in the production or sale of other assets or services

Failure to record the earned portion of unearned revenue would result in

net income being understated

B&B Painting reported the following information for the year ended December 31, 2019. Revenues $2,500,000 Expenses $2,000,000 Retained Earnings at December 31, 2018 $100,000 Retained Earnings at December 31, 2019 $450,000 How much was paid out in dividends in 2019?

$150,000

This company's end-of-year balance sheet consisted of the following amounts: Cash $75,000 Accounts Receivable $250,000 Property, plant & equipment 350,000 Long-term debt 200,000 Capital stock 500,000 Accounts payable 100,000 Retained earnings ? Inventory 175,000 What is the retained earnings balance at the end of the current year?

$50,000

On January 1, 2019, a company reported assets of $1,000,000 and liabilities of $600,000. During 2019, assets decreased by $100,000 and Stockholders' Equity decreased $200,000. What is the amount of liabilities at December 31, 2019?

$700,000

This company's end-of-year balance sheet consisted of the following amounts: Cash$75,000 Accounts Receivable $250,000 Property, plant & equipment 350,000 Long-term debt 200,000 Capital stock 500,000 Accounts payable 100,000 Retained earnings ? Inventory 175,000 Refer to Bargain Spot Fabrics. What amount should the company report on its Balance Sheet for Total Assets?

$850,000

The purchase of office equipment on credit has what effect on the accounting equation?

assets and liabilities increase