ACC 231 Exam 1 Pt. 2

False

A balance sheet reports the​ company's financial position over a period of time.

total debits would exceed total credits on the trial balance.

A bookkeeper forgot to post a credit to Accounts​ Receivable, but did post the debit part of the journal entry correctly.​ Then:

False

A bookkeeper posted the same journal entry twice. This will cause the trial balance to be out of balance.

debit Accounts Payable for $3,200 and credit Cash for $3,200.

A business paid $3,200 on account. The journal entry​ would:

debit Equipment for $44,000 and credit Cash for $44,000.

A business paid $44,000 cash to purchase equipment. The business​ would:

debit Accounts Payable for​ $2,500 and credit Cash for​ $2,500.

A business paid​ $2,500 on account. The journal entry​ would:

debit Equipment for​ $50,000 and credit Cash for​ $50,000.

A business paid​ $50,000 cash to purchase equipment. The business​ would:

debit Supplies for $10,000 and credit Accounts Payable for $10,000.

A business purchased office supplies of $10,000 on account. The business​ would:

debit Supplies for $14,000 and credit Notes Payable for $14,000.

A business purchased office supplies of $14,000 by signing a note. The business​ would:

debit Supplies for​ $23,000 and credit Notes Payable for​ $23,000.

A business purchased office supplies of​ $23,000 by signing a note. The business​ would:

debit Supplies for​ $28,000 and credit Accounts Payable for​ $28,000.

A business purchased office supplies of​ $28,000 on account. The business​ would:

Debit Utilities Expense for $1,425 and credit Cash for $1,425.

A business received the current​ month's utility bill for $1,425​, and immediately paid it. Which journal entry is​ prepared?

Debit Utilities Expense for​ $2,125 and credit Cash for​ $2,125.

A business received the current​ month's utility bill for​ $2,125, and immediately paid it. Which journal entry is​ prepared?

Debit Cash for $44,300 and credit Equipment for $44,300.

A business sold equipment for $44,300 cash. The equipment was purchased one month earlier for $44,300 but the plans for the equipment changed.

Debit Cash for​ $44,900 and credit Equipment for​ $44,900.

A business sold equipment for​ $44,900 cash. The equipment was purchased one month earlier for​ $44,900 but the plans for the equipment changed.

lists all of an​ organization's accounts and account numbers.

A chart of​ accounts:

No.

A company did not record the receipt and payment of an utility bill for $2,100. Is the trial balance out of​ balance?

No.

A company did not record the receipt and payment of an utility bill for​ $2,500. Is the trial balance out of​ balance?

No.

A company incorrectly recorded a receipt of cash on account. Accounts Receivable was debited for $1,000 and Cash was credited for $1,000. Is the trial balance out of​ balance?

No.

A company incorrectly recorded a receipt of cash on account. Accounts Receivable was debited for​ $1,400 and Cash was credited for​ $1,400. Is the trial balance out of​ balance?

financing cash flow.

A company issues common stock for​ $100,000. On a statement of cash​ flows, this will be reported as​ a(n):

No.

A company omitted a journal entry to record service revenue of $7,000 on account. Is the trial balance out of​ balance?

No.

A company omitted a journal entry to record service revenue of​ $12,000 on account. Is the trial balance out of​ balance?

​Yes, by $5,400.

A company posted a $6,000 debit to Cash as $600. The credit of $6,000 to Service Revenue in the entry was posted correctly. Is the trial balance out of​ balance?

Yes, by​ $7,200.

A company posted a​ $8,000 debit to Cash as​ $800. The credit of​ $8,000 to Service Revenue in the entry was posted correctly. Is the trial balance out of​ balance?

No.

A company recorded a cash payment incorrectly. Accounts Receivable was debited for $2,400 and Cash was credited for $2,400. The correct entry would debit Accounts Payable for $2,400 and credit Cash for $2,400. Is the trial balance out of​ balance?

No.

A company recorded a cash payment incorrectly. Accounts Receivable was debited for​ $1,900 and Cash was credited for​ $1,900. The correct entry would debit Accounts Payable for​ $1,900 and credit Cash for​ $1,900. Is the trial balance out of​ balance?

cash outflow from investing activity.

A company reports the purchase of equipment for​ $1,000,000 in cash. On a statement of cash​ flows, this is​ a(n) example​ of:

$7.00.

A company sells travel mugs online for $12.00. They purchase the mugs for $7.00 and charge the customers $2.00 for shipping and handling. The cost of product sold per mug​ is:

$6

A company sells travel mugs online for​ $10. They purchase the mugs for​ $6 and charge the customers​ $2 for shipping and handling. The cost of product sold per mug​ is:

credit to Land.

A company sold land for the same price that they paid for it last year. When entering this transaction in the​ journal, there will be​ a:

$80,000

A construction company paid $80,000 cash for land used in the business. At the time of​ purchase, the land had a list price of $89,000. When the balance sheet was​ prepared, the fair value of the land was $84,000. At what amount should the land be reported on the balance sheet of the​ company?

$82,000

A construction company paid​ $82,000 cash for land used in the business. At the time of​ purchase, the land had a list price of​ $90,000. When the balance sheet was​ prepared, the fair value of the land was​ $85,000. At what amount should the land be reported on the balance sheet of the​ company?

each partner may conduct business in the name of the entity and make agreements that legally bind all partners.

A disadvantage of general partnerships​ is:

payment was received on account.

A journal entry that debits Cash and credits Accounts Receivable indicates​ that:

total expenses and losses exceed total revenues and gains.

A net loss occurs​ when:

not record the transaction in its books.

A partner in Sturm Company purchased a new​ yacht, for personal​ use, with his own funds. Sturm Company​ would:

False.

A partnership is a taxpaying entity.

Income Statement only.

A potential​ investor, interested in predicting the earnings of a company in the​ future, should examine​ the:

liabilities increased.

A transaction that includes a debit to an expense and a credit to a liability indicates​ that:

Totals for all accounts listed in the ledger.

A trial balance has which of the following​ features?

False

A trial balance is a required financial statement.

$112,200

AccoThe accounts of Yardy Company are as follows on November​ 30, 2019: Account Balance Accounts Payable $23,500 Accounts Receivable $17,600 Cash $69,000 Common Stock $36,000 Dividends $8,000 Insurance Expense $2,100 Retained Earnings $29,800 Salary Expense $14,000 Sales Revenue $12,000 Supplies $1,500 What is the total of the debit column in the trial balance at November​ 30, 2019?

False.

Accounting information is used by investors and​ creditors, but not by regulatory bodies.

True.

Accounting is an information system that measures business activities.

True.

Accounting is moving in the direction of reporting more and more assets and liabilities at their fair values.

True.

Accounting is often called the language of business.

True.

Accounting produces financial​ statements, which report information about a business.

journal.

Accounting transactions are initially recorded in​ the:

False

Accounts are listed in random order in a trial balance.

​Cash, Accounts​ Receivable, and Supplies.

Accounts with normal debit balances​ include:

Fixed assets

Accumulated depreciation is normally associated with which asset on the Balance​ Sheet?

limited liability of the stockholders for the​ corporation's debts.

Advantages of a corporation​ include:

Dividends

All of the following are expenses EXCEPT​ for:

business operations cannot be divided into segments.

All of the following are true statements about the entity assumption EXCEPT​ for:

dividends declared.

All of the following line items are found on the balance sheet EXCEPT​ for:

dividends declared.

All of the following line items are found on the income statement EXCEPT​ for:

total​ stockholders' equity.

All of the following line items are found on the statement of cash flows EXCEPT​ for:

assets

All of the following will appear on the income statement EXCEPT​ for:

the payment of cash dividends.

All of the following would be considered investing activities on the statement of cash flows EXCEPT​ for:

True

Although a trial balance can be prepared at any​ time, the most common time is at the end of the accounting period.

the amount of the debits exceeds the amount of the credits.

An account will have a debit balance​ if:

False

An account with a normal debit balance is most often an asset or revenue account.

$600 as $60.

An example of a slide−type error is​ writing:

​$500 as​ $50.

An example of a slide−type error is​ writing:

$1,500 as $5,100.

An example of a transposition error is​ writing:

​$1,400 as​ $4,100.

An example of a transposition error is​ writing:

sales commissions paid to employees.

An example of an operating expense​ is:

for accounting​ purposes, a proprietorship is a distinct​ entity, separate from the proprietor

An important factor to consider when determining how to organize a business is​ that:

debit to Cash and a credit to Common Stock.

An owner makes an investment of cash into the business and receives shares of stock. This transaction is recorded as​ a:

$51,000.

Andy Company had a cash balance on May 1 of $32,000. At the end of​ May, the cash balance has increased to $31,000. During the month of​ May, Andy received cash of $50,000 from various sources. Based on this​ information, cash payments for the month of May​ were:

​$44,000.

Andy Company had a cash balance on May 1 of​ $27,000. At the end of​ May, the cash balance has increased to​ $31,000. During the month of​ May, Andy received cash of​ $48,000 from various sources. Based on this​ information, cash payments for the month of May​ were:

True.

Another name for the continuity assumption is the going−concern assumption.

statement of retained earnings

An​ investor, wishing to assess the reasons for a change in retained earnings over a period of a​ year, would probably examine​ the:

$43,000.

At the end of the current accounting​ period, account balances were as​ follows: Cash, $29,000​; Accounts​ Receivable, $44,000​; Common​ Stock, $18,000​; Retained​ Earnings, $12,000. Liabilities for the period​ were:

$41,000

At the end of the current accounting​ period, account balances were as​ follows: Cash,​ $29,000; Accounts​ Receivable, $44,000; Common​ Stock, $18,000; Retained​ Earnings, $14,000. Liabilities for the period​ were:

has two main categories of liabilities.

A​ company's balance​ sheet:

income statement.

A​ company's interest expense for the period is reported on​ the:

operating activities.

A​ company's main source of cash should​ be:

net income of $81,000

Beck Company had the following accounts and balances at the end of the year. What is net income or net loss for the​ year? Cash $72,000 Accounts Payable ​$12,000 Common Stock ​$21,000 Dividends ​$12,000 Operating Expenses $14,000 Accounts Receivable $56,000 Inventory $44,000 Long−term Notes Payable ​$33,000 Revenues $95,000 Salaries Payable $32,000

net income of​ $79,000

Beck Company had the following accounts and balances at the end of the year. What is net income or net loss for the​ year? Cash ​$79,000 Accounts Payable ​$12,000 Common Stock ​$21,000 Dividends ​$12,000 Operating Expenses ​$15,000 Accounts Receivable ​$50,000 Inventory ​$45,000 Long−term Notes Payable ​$33,000 Revenues ​$94,000 Salaries Payable ​$28,000

True.

Bookkeeping is a mechanical part of accounting.

$167,000

Cash Golden Company had the following accounts and balances at the end of the year. What are total assets at the end of the​ year? Cash $75,000 Accounts Payable $19,000 Common Stock ​$21,000 Dividends ​$12,000 Operating Expenses ​$12,000 Accounts Receivable $52,000 Inventory $40,000 Long−term Notes Payable ​$33,000 Revenues $135,000 Salaries Payable $34,000

decrease retained earnings on the statement of retained earnings.

Cash dividends​ declared:

$75,000

Census Company had the following accounts and balances at the end of the year. What are total liabilities at the end of the​ year? Cash $69,000 Accounts Payable $13,000 Common Stock ​$21,000 Dividends ​$12,000 Operating Expenses ​$12,000 Accounts Receivable $54,000 Inventory $43,000 Long−term Notes Payable $34,000 Revenues $105,000 Salaries Payable $28,000

$75,000

Census Company had the following accounts and balances at the end of the year. What are total liabilities at the end of the​ year? Cash ​$78,000 Accounts Payable ​$13,000 Common Stock ​$21,000 Dividends ​$12,000 Operating Expenses ​$12,000 Accounts Receivable ​$54,000 Inventory ​$46,000 Long−term Notes Payable ​$35,000 Revenues ​$115,000 Salaries Payable ​$27,000

All of the above: what is ethical in one country may not be ethical in another country. B. what is legal in one country may not be legal in another country. C. a foreign government threatening to take over the​ company's plant.

Complicating factors for a global business​ include:

$126000

Connar Company reports the following accounts and balances at year​ end: Long−Term Notes Payable ​$150,000 Accounts Receivable $29,000 Accounts Payable ​$37,000 Building ​$55,000 Cash and Cash Equivalents $83,000 Salaries Expense ​$20,500 Common Stock ​$22,000 Interest Payable ​$1,500 Land ​$40,000 Short−term Investments $7,000 Income Taxes Payable $13,000 Equipment ​$59,500 Supplies $7,000 Service Revenue ​$99,000 Supplies Expense ​$18,000 Utilities Expense ​$8,500 Income Tax Expense ​$10,000 What is the total amount of current assets at the end of the​ year? A.

$129000

Connar Company reports the following accounts and balances at year​ end: Long−Term Notes Payable ​$150,000 Accounts Receivable ​$28,000 Accounts Payable ​$37,000 Building ​$55,000 Cash and Cash Equivalents ​$83,000 Salaries Expense ​$20,500 Common Stock ​$22,000 Interest Payable ​$1,500 Land ​$40,000 Short−term Investments ​$9,000 Income Taxes Payable ​$12,000 Equipment ​$59,500 Supplies ​$9,000 Service Revenue ​$99,000 Supplies Expense ​$18,000 Utilities Expense ​$8,500 Income Tax Expense ​$10,000 What is the total amount of current assets at the end of the​ year?

12 months or within the​ business's operating cycle if longer than a year.

Current assets are assets expected to be converted to​ cash, sold, or consumed during the​ next:

long−term investments.

Current assets as reported on the balance sheet do NOT​ include:

treasury stock.

Current liabilities as reported on the balance sheet do NOT​ include:

False.

David Company has total assets of​ $500,000 and total liabilities of​ $180,000. David​ Company's stockholders' equity must therefore be​ $680,000.

all of the above. (creditors., the Securities and Exchange Commission., the Internal Revenue Service.)

Decision makers who use accounting information​ include:

Statement of Retained Earnings.

Dividends declared are reported on​ the:

True

Each category of activities on the statement of cash flows results in net cash provided or net cash used.

True

Each journal entry should contain a brief description of the transaction.

materiality

Enhancing qualitative characteristics of accounting information do NOT​ include:

True

Entering a transaction in the journal is also known as booking the journal entry.

chronologically.

Entries are listed in the​ journal:

balance sheet with long−term assets.

Equipment would appear on​ the:

False

Every corporation must pay dividends every year.

must debit at least one account and credit at least one account.

Every journal​ entry:

sale of a piece of equipment for cash.

Examples of financing activities on the statement of cash flows do NOT​ include:

accounts payable and long−term debt.

Examples of liabilities​ include:

True.

Expenses are decreases in retained earnings that result from operations.

cost of products and services sold and salaries expense.

Expenses of a business​ include:

members

Federal income taxes are paid by​ ________ in a limited liability company.

False.

Generally accepted accounting principles​ (GAAP) are the accounting guidelines formulated by the Securities and Exchange Commission.

$91,000

Gerald Company has the following account balances at the end of the first year of​ operations: Revenues $105,000 Salaries Expense ​$13,000 Dividends $8,000 Utilities Expense ​$11,000 Advertising Expense $9,000 Cash $38,000 Land $53,000 Common Stock $55,000 What are total assets at the end of the first​ year?

$91,000

Gerald Company has the following account balances at the end of the first year of​ operations: Revenues ​$100,000 Salaries Expense ​$13,000 Dividends ​$9,000 Utilities Expense ​$11,000 Advertising Expense ​$9,000 Cash ​$38,000 Land ​$53,000 Common Stock ​$56,000 What are total assets at the end of the first​ year?

​$177,000

Golden Company had the following accounts and balances at the end of the year. What are total assets at the end of the​ year? Cash ​$79,000 Accounts Payable ​$20,000 Common Stock ​$21,000 Dividends ​$12,000 Operating Expenses ​$12,000 Accounts Receivable ​$54,000 Inventory ​$44,000 Long−term Notes Payable ​$33,000 Revenues ​$110,000 Salaries Payable ​$30,000

is a verifiable measure that is relatively free from bias.

Historical​ cost:

timeliness.

If a company prepares its financial statements three years after the end of its accounting​ period, it has violated the qualitative characteristic​ of:

Accounts Payable is decreased.

If a journal entry includes a debit to Accounts Payable and a credit to​ Cash:

2.

If a posting error has occurred whereby a debit is treated as a​ credit, then the out−of−balance amount on the trial balance will be evenly divisible​ by:

A and B.

If an investor wants to know a​ company's cash balance at the end of the​ year, this balance is reported on​ the:

Divide the out−of−balance amount by 5.

If the trial balance does not​ balance, several steps can be taken to find the error. Which step will probably NOT help you find the​ error?

True

In a journal​ entry, the sum of the debits must always equal the sum of the credits.

International Financial Reporting Standards for both companies.

In order to compare the financial statements of Toyota Corporation to the financial statements of General​ Motors, it would be preferable to​ use:

ledger.

In order to determine the balance in an​ account, you must look at​ the:

journal.

In order to see a complete transaction in one​ place, you would need to look at​ the:

False

In the journalizing​ process, the credit side is entered on the left​ margin, and the debit side is indented to the right.

ledger.

Information for the trial balance is obtained from​ the:

understandability.

Information must be sufficiently transparent so that it makes sense to reasonably informed users of the financial​ statements, such as creditors. This qualitative characteristic of information is​ called:

$190,000

In​ 1990, Johnson Company purchased a building for $190,000. In​ 2020, a real estate professional says the building has a fair value of $1,600,000. In​ 2020, a similar building down the street recently sold for​ $900,000. What​ value, before consideration of accumulated​ depreciation, is reported for the building on the balance sheet at December​ 31, 2020?

$170,000

In​ 1990, Johnson Company purchased a building for​ $170,000. In​ 2020, a real estate professional says the building has a fair value of​ $1,000,000. In​ 2020, a similar building down the street recently sold for​ $900,000. What​ value, before consideration of accumulated​ depreciation, is reported for the building on the balance sheet at December​ 31, 2020?

Building 33,000 Notes Payable 33,000

Jaye Company purchased a new building by signing a note for $33,000.00. The entry to record the transaction​ is:

Building ​25,000 Notes Payable 25,000

Jaye Company purchased a new building by signing a note for​ $25,000. The entry to record the transaction​ is:

True

Journal entries can have more than two accounts as long as the total debits equal the total credits.

$54000

Kolander Company has the following accounts and balances at the end of the​ year: Long−Term Notes Payable $56,000 Accounts Receivable $28,000 Accounts Payable $41,000 Building $57,000 Cash and Cash Equivalents $84,000 Common Stock $127,000 Interest Payable $2,500 Land $44,000 Short−term Investments $5,000 Income Taxes Payable $11,000 Equipment $63,500 Supplies $10,000 What is the amount of Retained Earnings at the end of the​ year? A. $164,500

$45000

Kolander Company has the following accounts and balances at the end of the​ year: Long−Term Notes Payable ​$59,000 Accounts Receivable ​$28,000 Accounts Payable ​$42,000 Building ​$59,000 Cash and Cash Equivalents ​$85,000 Common Stock ​$126,000 Interest Payable ​$5,500 Land ​$41,000 Short−term Investments ​$8,000 Income Taxes Payable ​$11,000 Equipment ​$61,500 Supplies ​$6,000 What is the amount of Retained Earnings at the end of the​ year?

debts payable to outsiders called creditors.

Liabilities​ are:

True.

Long−term debt is a liability that is payable beyond one year from the date of the financial statements.

$55,000

Lorna Company is a new company with a beginning retained earnings balance of zero. It has the following account balances at the end of the first year of​ operations: Accounts Payable ​$37,000 Revenues $99,000 Salaries Expense $14,000 Dividends $10,000 Utilities Expense $14,000 Advertising Expense $6,000 Short−term Investments ​$20,000 Cash $72,000 Land ​$50,000 Common Stock $50,000 What is the ending balance in Retained​ Earnings?

$62,000

Lorna Company is a new company with a beginning retained earnings balance of zero. It has the following account balances at the end of the first year of​ operations: Accounts Payable ​$37,000 Revenues ​$106,000 Salaries Expense ​$14,000 Dividends ​$8,000 Utilities Expense ​$12,000 Advertising Expense ​$10,000 Short−term Investments ​$69,000 Cash ​$33,000 Land ​$50,000 Common Stock ​$53,000 What is the ending balance in Retained​ Earnings?

$137,000

Michael Company reports Total Assets of $292,000​, Common Stock of $53,000​, and Retained Earnings of $102,000. What are total liabilities at the end of the first​ year?

$110,000

Michael Company reports Total Assets of​ $254,000, Common Stock of​ $50,000, and Retained Earnings of​ $94,000. What are total liabilities at the end of the first​ year?

revenues − expenses.

Net income is computed​ as:

F

Net income is the profit left over after subtracting expenses and dividends from revenues and gains.

is often referred to as the​ "bottom line" on an income statement.

Net​ income:

current liability.

Notes payable​ (due in 60​ days) would appear on the balance sheet as​ a:

increase of $19,000

On January​ 1, 2019, total assets for Wininger Technologies were $136,000​; on December​ 31, 2019, total assets were $157,000. On January​ 1, 2019, total liabilities were $114,000​; on December​ 31, 2019, total liabilities were $116,000. What is the amount of the change and the direction of the change in Wininger​ Technologies' stockholders' equity for​ 2019?

increase of​ $13,000

On January​ 1, 2019, total assets for Wininger Technologies were​ $136,000; on December​ 31, 2019, total assets were​ $157,000. On January​ 1, 2019, total liabilities were​ $110,000; on December​ 31, 2019, total liabilities were​ $118,000. What is the amount of the change and the direction of the change in Wininger​ Technologies' stockholders' equity for​ 2019?

debit to Advertising Expense.

On March​ 31, Baker Company received a bill and paid for advertising costs for the current month. This payment results in​ a:

Debit Accounts Receivable for $3,800 and credit Service Revenue for $3,800.

On May​ 1, a business provided legal services to a client and billed the client $3,800. The client promised to pay the business in one month. Which journal entry should the business record on May​ 1?

Debit Accounts Receivable for​ $4,000 and credit Service Revenue for​ $4,000.

On May​ 1, a business provided legal services to a client and billed the client​ $4,000. The client promised to pay the business in one month. Which journal entry should the business record on May​ 1?

Debit Cash for $3,600 and credit Accounts Receivable for $3,600.

On May​ 10, a business collected $3,600 on account. What journal entry is needed on that​ date?

Debit Cash for​ $4,200 and credit Accounts Receivable for​ $4,200

On May​ 10, a business collected​ $4,200 on account. What journal entry is needed on that​ date?

positive amounts.

On a statement of cash​ flows, cash receipts are reported​ as:

a net loss decreases retained earnings.

On the statement of retained​ earnings:

members

Owners of an LLC are​ called:

False

Posting accounting transactions avoids the necessity of journalizing transactions.

False

Posting is the process of copying data from the ledger to the journal.

copying the information from the journal to the ledger.

Posting​ is:

$41000

Potter Company reports the following line​ items: Long−Term Notes Payable ​$50,000 Accounts Receivable ​$28,000 Accounts Payable ​$37,000 Building ​$55,000 Cash and Cash Equivalents ​$80,000 Salaries Expense $23,500 Common Stock $22,000 Interest Payable ​$1,500 Land ​$40,000 Short−term Investments ​$5,000 Income Taxes Payable ​$10,000 Equipment ​$59,500 Supplies ​$5,000 Service Revenue $106,000 Supplies Expense $21,000 Utilities Expense $10,500 Income Tax Expense $10,000 What is net​ income? A.

$46,000

Potter Company reports the following line​ items: Long−Term Notes Payable ​$50,000 Accounts Receivable ​$28,000 Accounts Payable ​$37,000 Building ​$55,000 Cash and Cash Equivalents ​$80,000 Salaries Expense ​$21,500 Common Stock ​$27,000 Interest Payable ​$1,500 Land ​$40,000 Short−term Investments ​$5,000 Income Taxes Payable ​$10,000 Equipment ​$59,500 Supplies ​$5,000 Service Revenue ​$106,000 Supplies Expense ​$18,000 Utilities Expense ​$8,500 Income Tax Expense ​$12,000 What is net​ income? A. ​$106,000

operating​ activities, investing​ activities, and financing activities

Purchases and sales of long−term assets are financing cash flows.

relevance and faithful representation.

Question Help To be​ useful, accounting information must have the fundamental qualitative characteristics​ of:

assets

Receivables are classified​ as:

False.

Relevance is one of the four enhancing qualitative characteristics.

False

Revenues and expenses are reported on both the income statement and the statement of retained earnings.

False.

Revenues are cash distributions to the stockholders.

Net income was $7,000​; the change in retained earnings was $5,000.

Revenues were $150,000​, expenses were $143,000​, and cash dividends declared and paid were $2,000. What were the net income and the change in retained earnings for the​ period? (Net income = revenues - expenses) (Change in retained earnings = net income -cash dividends declared and paid)

Net income was​ $6,000; the change in retained earnings was​ $3,000.

Revenues were​ $150,000, expenses were​ $144,000, and cash dividends declared and paid were​ $3,000. What were the net income and the change in retained earnings for the​ period? (Net income = revenues - expenses) (Change in retained earnings = net income -cash dividends declared and paid)

increases in retained earnings resulting from delivering goods or services to customers.

Revenues​ are:

$62,000

Seidner Company had the following account balances at the end of the first year of​ operations: Revenues $105,000 Salaries Expense $18,000 Dividends $14,000 Utilities Expense $15,000 Advertising Expense $10,000 Short−term Investments ​$20,000 Cash $36,000 Land ​$50,000 Common Stock ​$50,000 What is the amount of net income or net loss for the​ year?

$63,000

Seidner Company had the following account balances at the end of the first year of​ operations: Revenues ​$103,000 Salaries Expense ​$16,000 Dividends ​$11,000 Utilities Expense ​$15,000 Advertising Expense ​$9,000 Short−term Investments ​$20,000 Cash ​$37,000 Land ​$50,000 Common Stock ​$50,000 What is the amount of net income or net loss for the​ year?

have limited liability for the​ corporation's debts.

Shareholders of a​ corporation:

$107,000.

Simmons Company began the month with a balance of $83,000 in Accounts Receivable. An analysis of the account determined that sales on account for the month totaled $112,000. At the end of the​ month, the balance in Accounts Receivable was $88,000. From this​ information, it can be determined that Simmons Company had collections from customers on account​ of:

​$111,000.

Simmons Company began the month with a balance of​ $84,000 in Accounts Receivable. An analysis of the account determined that sales on account for the month totaled​ $113,000. At the end of the​ month, the balance in Accounts Receivable was​ $86,000. From this​ information, it can be determined that Simmons Company had collections from customers on account​ of:

False.

Since Habitat for Humanity is not concerned about making a​ profit, the entity does not need to use accounting information.

True.

Stockholders have no personal obligation for the​ corporation's debts.

short−term investments.

Stockholders' equity as reported on the balance sheet does NOT​ include:

enables accountants to ignore the effect of inflation on the accounting records.

The stable−monetary−unit ​assumption:

$44,000

The Accounts Receivable account for​ Johnny's Mechanic Shop had a beginning balance of $34,000. During the​ month, Johnny made sales on account of $45,000. The ending balance in the Accounts Receivable account is $35,000. What are cash collections for the​ month?

$500,000

The Accounts Receivable account for​ Johnny's Mechanic Shop had a beginning balance of​ $36,000. During the​ month, Johnny made sales on account of​ $46,000. The ending balance in the Accounts Receivable account is​ $32,000. What are cash collections for the​ month?

False

The American Institute of Certified Public Accountants​ (AICPA) Code of Professional Conduct contains basic principles that can only be applied to CPAs.

True

The American Institute of Certified Public Accountants​ (AICPA) Code of Professional Conduct contains basic principles that provide guidance to all of its members in the performance of their professional duties.

Statement of Cash Flows.

The Balance Sheet is used to prepare​ the:

Only the factory in Detroit.

The CEO of Clarkson Company owns a vacation home in Hawaii. Clarkson Company owns a factory in Detroit where it is headquartered. Which of these properties is considered to be​ asset(s) of the​ business?

income​ statement, statement of retained​ earnings, balance​ sheet, statement of cash flows.

The CORRECT data flow from one financial statement to the next​ is:

False.

The Clarke Company had beginning retained earnings of​ $20,000 and net income of​ $5,000. Clarke declared and paid dividends of​ $1,000. Therefore, the ending retained earnings is​ $25,000.

$29,000.

The Diamond Store began business on June 1. During the month of​ June, Diamond had cash payments of $11,000. At the end of​ June, it had a $18,000 cash balance. Based on this​ information, the cash receipts for the month of June​ were:

$28,000.

The Diamond Store began business on June 1. During the month of​ June, Diamond had cash payments of​ $8,000. At the end of​ June, it had a​ $20,000 cash balance. Based on this​ information, the cash receipts for the month of June​ were:

Statement of Retained Earnings and Statement of Cash Flows.

The Income Statement is used to prepare​ the:

International Financial Reporting Standards.

The International Accounting Standards Board is responsible for​ establishing:

False.

The SEC establishes International Financial Reporting Standards.

Balance Sheet.

The Statement of Retained Earnings is used to prepare​ the:

entity assumption.

The accounting assumption that states that the​ business, rather than its​ owners, is the reporting unit is​ the:

Assets −Liabilities ​= Stockholders' Equity.

The accounting equation can be stated​ as:

Assets​ = Liabilities​ + Paid−in Capital​ + Retained Earnings.

The accounting equation can be stated​ as:

True.

The accounting equation must always be in balance.

False.

The accounting equation shows the relationship among​ assets, liabilities and net income.

True.

The accounting process begins and ends with people making decisions.

​Cash, Accounts​ Receivable, Supplies, Accounts Payable

The accounts of Local Company at May​ 31, 2019 are as​ follows: Account Balance Accounts Payable ​$23,500 Accounts Receivable ​$15,600 Cash ​$68,000 Common Stock ​$32,000 Dividends ​$3,000 Insurance Expense ​$2,100 Retained Earnings ​$25,800 Salary Expense ​$1,100 Sales Revenue ​$10,000 Supplies ​$1,500 What are the first four​ lines, in proper​ order, on the trial balance at May​ 31, 2019?

$117,200

The accounts of Yardy Company are as follows on November​ 30, 2019: Account Balance Accounts Payable ​$26,500 Accounts Receivable ​$16,600 Cash ​$73,000 Common Stock ​$37,000 Dividends ​$8,000 Insurance Expense ​$4,100 Retained Earnings ​$28,800 Salary Expense ​$14,000 Sales Revenue ​$11,000 Supplies ​$1,500 What is the total of the debit column in the trial balance at November​ 30, 2019?

False

The amount of cash received on the sale of the​ company's stock in excess of par value is called retained earnings.

represent economic resources that are expected to produce a future benefit.

The assets of a​ company:

True

The balance of an account is the difference between the​ account's total debits and total credits.

ending balance in retained earnings.

The balance sheet includes​ the:

T

The balance sheet is also called the statement of financial position.

statement of financial position.

The balance sheet is also known as​ the:

False

The balance sheet is organized in terms of the​ organization's operating,​ investing, and financing activities.

assets, liabilities, and equity.

The balance sheet reports information​ about:

True.

The basic component of paid−in capital is common stock.

False.

The business records of a sole proprietorship should include the​ proprietor's personal finances.

False.

The calculation of ending retained earnings considers the beginning retained​ earnings, current period net income or net​ loss, and​ stockholders' equity.

decision making.

The conceptual foundation of accounting does not​ include:

is the direct cost of the products sold.

The cost of products​ sold:

current liability.

The current portion of a long−term note payable is classified on the balance sheet as​ a:

True

The decision framework for making ethical judgments provides general guidance for​ everyone, regardless of profession or industry.

ending balances in the ledger accounts.

The dollar amounts listed on the trial balance are obtained from​ the:

maximize the economic benefit to the decision maker.

The economic factor in decision making requires the decision maker​ to:

A and C. Balance Sheet. Statement of Cash Flows.

The ending balance of Cash and Cash Equivalents is reported on​ the:

A and B. Balance Sheet. Statement of Retained Earnings.

The ending balance of Retained Earnings is reported on​ the:

Balance Sheet.

The ending balance of cash and cash equivalents is found on the Statement of Cash Flows and​ the:

Accounts Payable.

The entry to record the purchase of supplies on account includes a credit​ to:

the amount the business could sell the asset for.

The fair value of a plant asset is equal​ to:

True

The financial statements can be prepared from the trial balance.

specifying each account affected by the transaction and classifying the account by type.

The first step in recording a transaction in the journal​ is:

False.

The fundamental qualitative characteristics of accounting information are relevance and reliability.

False.

The historical cost principle is not used widely in the United States to value assets.

covers a defined period of time.

The income​ statement:

False

The journal is a grouping of all the T−​accounts, with their balances.

True

The journal is the book of original entry.

revenues, expenses, and dividends.

The major types of transactions that affect retained earnings​ are:

B and C. B. statement of retained earnings. Your answer is not correct. C. statement of cash​ flows, if the indirect method is used.

The net income shown on the income statement also appears on​ the:

all of the above: Statement of Retained Earnings. Statement of Cash Flows. Income Statement.

The net loss for a company is reported on​ the:

​credit; retained earnings

The normal balance of a revenue account is a​ ________ because revenues increase​ ________.

​debit; retained earnings

The normal balance of an expense account is a​ ________ because expenses decrease​ ________.

falls on the side where increases are recorded.

The normal balance of an​ account:

​debit; asset

The normal balance of the Accounts Receivable account is a​ ________ because it is​ a(n) ________ account.

cash and cash​ equivalents, accounts​ receivable, inventory, prepaid expenses.

The order in which current assets are typically listed​ is:

proprietorship

The owner of a​ ________ is personally liable for all the​ business's debts.

retained earnings.

The portion of net income that the company has kept over a period of years and not used for dividends is​ called:

historical cost.

The principle stating that assets acquired by the business should be recorded at their actual cost on the date of purchase​ is:

not part of the accounting process.

The process of copying the information from the journal to the trial balance​ is:

transaction​ occurs, transaction​ analyzed, journalizing, and posting.

The proper order for the accounting process​ is:

Office Equipment and a credit to Cash.

The purchase of office computers for cash includes a debit​ to:

a credit to Cash and a credit to Accounts Payable.

The purchase of​ equipment, involving a cash down payment and a promise to pay the balance in the​ future, includes:

liquidating value.

The relevant measure of the value of the assets of a company that is going out of business is​ the:

False

The statement of cash flows measures operating performance.

False

The three factors that influence business and accounting decisions are​ economic, legal, and fin

economic, legal, and ethical.

The three factors that influence business and accounting decisions​ are:

False

The total debits to an account must equal the total credits to the account.

False

The trial balance for James Corporation shows that the total debits equal the total credits. This indicates that all of the accounts are free from errors.

total debits of all the accounts equal total credits of all the accounts.

The trial balance is used to determine​ if:

all of the above. (balance sheet only., statement of retained earnings only., income statement only.)

The trial balance is used to prepare​ the:

True

The trial balance summarizes all the account balances for the financial statements and shows whether total debits equal total credits.

False.

The two main components of​ stockholders' equity are paid−in capital and dividends.

financial and managerial.

The two types of accounting​ are:

True.

The word​ "payable" always signifies a liability.

ethical

The​ ________ factor recognizes that while certain actions might be both economically profitable and​ legal, they still may not be right.

contains all the accounts used by a business.

The​ ledger:

assets minus liabilities.

The​ owners' equity of a business is equal​ to:

debit Salary Expense for $1,900 and credit Cash for $1,900.

Two employees worked one week and were paid salaries of $1,900. The journal entry​ would:

debit Salary Expense for​ $2,500 and credit Cash for​ $2,500.

Two employees worked one week and were paid salaries of​ $2,500. The journal entry​ would:

must be capable of being checked for​ accuracy, completeness and reliability.

Verifiability means that the accounting​ information:

$209500

Wetzel Company has the following accounts and balances at the end of the fiscal​ year: Long−Term Notes Payable $154,000 Accounts Receivable $32,000 Accounts Payable $42,000 Building ​$55,000 Cash and Cash Equivalents $79,000 Salaries Expense ​$20,500 Common Stock $24,000 Interest Payable $3,500 Land $45,000 Short−term Investments $29,000 Income Taxes Payable $10,000 Equipment ​$59,500 Supplies $27,000 Service Revenue ​$99,000 Supplies Expense ​$38,000 Utilities Expense ​$28,500 Income Tax Expense $22,000 What is the total amount of liabilities at the end of the​ year?

$205500

Wetzel Company has the following accounts and balances at the end of the fiscal​ year: Long−Term Notes Payable ​$150,000 Accounts Receivable ​$30,000 Accounts Payable ​$41,000 Building ​$55,000 Cash and Cash Equivalents ​$38,000 Salaries Expense ​$20,500 Common Stock ​$22,000 Interest Payable ​$4,500 Land ​$43,000 Short−term Investments ​$30,000 Income Taxes Payable ​$10,000 Equipment ​$59,500 Supplies ​$25,000 Service Revenue ​$99,000 Supplies Expense ​$38,000 Utilities Expense ​$28,500 Income Tax Expense ​$25,000 What is the total amount of liabilities at the end of the​ year? A. ​$110,500

It is a liability for goods or services purchased on credit and supported by the credit standing of the purchaser.

What is an account​ payable?

Record the transaction in the journal.

What is the last step in the journalizing​ process?

True

When a trial balance is out of balance due to a slide−type ​error, the difference between total debits and total credits will be evenly divisible by 9.

False

When a trial balance is out of balance due to a transposition​ error, the difference between total debits and total credits will be evenly divisible by 2.

an amount is entered on the debit side of the expense account.

When an expense account is​ increased:

operating expenses are the costs of everyday operations such as selling expenses.

When analyzing a​ company's income​ statement, a fact to remember is​ that:

accounts payable should have a credit balance.

When computing the normal balance of an​ account:

​asset; liability

When listing the accounts on the trial​ balance, list the​ ________ accounts first and then the​ ________ accounts.

After Retained Earnings.

When listing the accounts on the trial​ balance, where is the dividends account​ listed?

​Yes, by $900.

When listing the assets in the trial​ balance, the balance for Accounts Receivable was transposed. The correct balance is $2,100 and the amount was written as $1,200. Is the trial balance out of​ balance?

​Yes, by​ $2,700.

When listing the assets in the trial​ balance, the balance for Accounts Receivable was transposed. The correct balance is​ $4,100 and the amount was written as​ $1,400. Is the trial balance out of​ balance?

A. the dollar amount of debits in the journal entry to the appropriate accounts. B. the dollar amounts of credits in the journal entry to the appropriate accounts. A & B

When posting a journal entry to the​ ledger, transfer:

a net loss.

When total expenses exceed total​ revenues, the result​ is:

Advertising Expense

Which account has a normal debit​ balance?

The bookkeeper recorded a journal entry with a debit of​ $400 and a credit of​ $400, as a debit of​ $400 and a credit of​ $40.

Which error will be uncovered by a trial​ balance?

income statement

Which financial statement answers the following​ question: How well did the company perform during the​ year?

balance sheet

Which financial statement answers the following​ question: What is the​ company's financial position at fiscal year​ end?

Balance sheet

Which financial statement is dated at the moment in time when the accounting period​ ends?

Income statement

Which financial statement must be prepared before the​ others?

statement of cash flows

Which financial statement reports cash payments and cash receipts over a period of​ time?

revenues, operating​ expenses, net income

Which is the CORRECT order for items to appear on the income​ statement?

faithful representation

Which of the following characteristics does not apply to​ verifiability?

corporation

Which of the following entities pay federal income​ taxes?

general partner in a limited liability partnership

Which of the following have unlimited liability for a​ company's debts?

net income

Which of the following increases retained​ earnings?

Intangible assets are long−term assets with no physical substance.

Which of the following is a CORRECT statement about long−term ​assets?

It lists the balance sheet accounts first.

Which of the following is a CORRECT statement about a chart of​ accounts?

Income and losses of the partnership​ "flow through" to the partners.

Which of the following is a TRUE statement about the characteristics of​ partnerships?

the names of the employees involved in recording the transaction

Which of the following items would NOT be included in the journal entry for a​ transaction?

net income

Which of the following must be added to beginning Retained Earnings to compute ending Retained​ Earnings?

Members have limited liability for debts only up to the extent of their investment in the LLC.

Which of the following statements is TRUE for a limited liability​ company?

The general partner has unlimited liability for the debts of the partnership.

Which of the following statements is TRUE for a limited liability​ partnership?

The partnership pays no federal income taxes.

Which of the following statements is TRUE for a limited liability​ partnership?

For accounting​ purposes, a proprietorship is separate from the proprietor.

Which of the following statements is TRUE for a​ proprietorship?

IFRS has been adapted in the United States.

Which of the following statements is​ FALSE?

Dividends reduce retained earnings.

Which of the following statements is​ TRUE?

All of the above are true.

Which of the following statements regarding a trial balance is​ TRUE?

the payment of an accounts payable

Which of the following transactions includes a credit to​ cash?

The company pays a long−term loan.

Which of the following would be considered a financing activity that decreases cash on the statement of cash​ flows?

Purchases and sales of long−term assets are financing cash flows.

Which statement about the statement of cash flows is​ FALSE?

Prepaid expenses include accrued interest payable.

Which statement below is​ FALSE?

​Individuals, corporations,​ partnerships, or other types of entities can be partners.

Which statement is TRUE about​ partnerships?

U.S. Generally Accepted Accounting Principles are used by many countries around the world.

Which statement is​ FALSE?

corporation

Which type of business organization transacts much more business and is larger in terms of​ assets, income, and number of​ employees?

Income statement

Which​ statement(s) reports the​ revenues, gains,​ expenses, and losses of an​ entity?

the Board of Directors of the corporation determines if a dividend will be paid.

With regard to cash​ dividends:

$106,000

Yellow Company had a balance of $30,000 in Accounts Payable at the beginning of​ June, and purchased $105,000 of merchandise on account during the month. At the end of​ June, Yellow's Accounts Payable balance was $29,000. What amount did Yellow pay on account during​ June?

​$106,000

Yellow Company had a balance of​ $31,000 in Accounts Payable at the beginning of​ June, and purchased​ $104,000 of merchandise on account during the month. At the end of​ June, Yellow's Accounts Payable balance was​ $29,000. What amount did Yellow pay on account during​ June?

True

the statement of retained earnings shows both the beginning and ending balances of retained earnings.

is all of the above. (is often called the language of business., measures business activities., processes data into reports and communicates the data to decision makers.)

​Accounting:

partnership

​Owners' equity consists of two​ accounts, Amy​ Jones, Capital, and Mindy​ Lenz, Capital. This indicates the entity is​ a:

True.

​Owners' equity is called​ stockholders' equity for a corporation.

True.

​Stockholders' equity is the​ stockholders' interest in the assets of the corporation.