Chapter 2
t
A company might provide a service or product on credit. "On credit" implies that the cash receipt will occur on a later date. t/f
t
A net loss on an income statement results when expenses are greater than revenues.
balance sheet(only)
Accounts payable appear on which of the following statements
liablilities
Creditors' claims on the assets of a company are called:
Expenses: $180,000 + $10,000 + $20,000 = $210,000 Net income = $400,000 - $210,000 = $190,000 A: 190,000
Determine the net income of a company for which the following information is available for the month of May. Employee salaries expence...180,000 Interesr expence....10,000 Rent expence....20,000 consulting revenue....400,000
withdrawals
Distributions by a business to its owners are called:
the claims of the owners on the assets of a company.
Equity represents?
$257,000 + $51,000 - $40,000 + $6,000 = A:$274,000
Fast Forward has beginning equity of $257,000, net income of $51,000, withdrawals of $40,000 and investments by owners of $6,000. Its ending equity is: $223,000.
...
FastForward uses $2,500 of its cash to buy supplies of brand name athletic footwear for performance testing over the next few months. This transaction is an exchange of cash, an asset, for another kind of asset, supplies. It merely changes the form of assets from cash to supplies. The decrease in cash exactly equals the increase in supplies. Fastforward's total assets and owner's equity each remain at $30,000 after this transaction. The supplies of athletic footwear are assets because of the expected future benefits from the test results of their performance. This transaction is reflected in the accounting equation as follows:
balance sheet and income statement
Fees earned(but not yet received in cash) by a business in exchange for services it provided appear on which of the following statements?
+$10,000 accounts receivable, +$10,000 revenue.
How would the accounting equation of Boston Company be affected by the billing of a client for $10,000 of consulting work completed?
Assets = $220,000 + $400,000 = $620,000
If equity is 400,000 and liabilities are $220,000, then assets equal:
Assets = liabilities + equity.
Net assets of a company are reflected in which of the following equations?
...
Net income;Amount earned after subtracting all expenses necessary for and matched with sales for a period; also called income, profit, or earnings. occurs when revenues exceed expenses. Net income increases equity.
$31,100
On June 30 of the current year, the assets and liabilities of Phoenix Phildell are as follows: Cash $20,500; Accounts Receivable, $7,250; Supplies, $650; Equipment, $12,000; Accounts Payable, $9,300. What is the amount of owner's equity as of July 1 of the current year?
f
Owner investments and withdrawals impact the profitability of the firm.
Income statement
Rent expense that is paid with cash appears on which of the following statements?
gross increases in equity from a company's earning activities.
Revenues are?
...cash from operations
The first section of the income statement reports?
t
The net assets of a firm decrease as withdrawals by the owner increase.
t
The statement of Owner's Equity reports the changes in equity of the owner over time.
They are economic resources owned or controlled by the business. They are expected to provide future benefits to the business. They appear on the balance sheet. Claims on them are shared between creditors and owners.
Which of the following statements is true about assets?
...
equity is also called net assets or residual equity
...
net lossExcess of expenses over revenues for a period. occurs when expenses exceed revenues, which decreases equity. Owner investments and withdrawals are not included in net income.
