ACC Ch.11-14
DEBIT Interest Expense CREDIT Interest Payable DEBIT Interest Expense CREDIT Interest Payable
Dec. 31, 2017 Prepares adjusting entries.
partnership
an association of 2 or more people to carry on as co-owners of a business for profit; passes its net income to the partners
payroll deductions
can either be Mandatory or Voluntary
Stock splits
do not change total stockholders' equity
liquidation of partnership
ends the life of the partnership
net pay
gross earnings - payroll deductions =
voluntary
include Charity, Retirement, United way, Union dues, Health & Life insurance, and Pension plans
mandatory
include FICA tax (social security & medicare) , Federal income tax, and State income tax
authorized stock
indicates the amount of stock that a corporation is authorized or approved to sell in the future
3 taxes from government agencies on employers
payroll tax expense results in 3 taxes ; FICA tax , Federal unemployment tax, and State unemployment tax
payroll
pertains to Salaries and Wages
wages
rate per hour
treasury stock
shares of the company's own stock, the company has gone into the market place and has bought back
outstanding stock
shares of the stock that are actually out in the market place ISSUED STOCK - TREASURY STOCK =
issued stock
shares that the corporation has actually sold
retained earnings
the net income that a corporation retains for future use.
paid-in capital
the total amount of cash/ other assets paid in to the corporation by stockholders in exchange for capital stock
gross earnings
total compensation earned by an employee ( wages and salaries, PLUS any bonuses and commissions.
accumulated depreciation
would not be recorded in the entry for the formation of a partnership?
not a current liability
(a) A note payable for $100,000 due in 2 years.
current liability
(b) A 10-year mortgage payable of $300,000 payable in ten $30,000 annual payments.
current liability
(c) Interest payable of $15,000 on the mortgage.
current liability
(d) Accounts payable of $60,000.
equity
2 sources of equity are Paid-in Capital ( common & preferred stock) and Retained Earnings
declaration date
The date on which a cash dividend becomes a binding legal obligation is on the
change the composition of stockholders' equity.
The effect of a stock dividend is to
increase liabilities and decrease retained earnings
The effect of the declaration of a cash dividend by the board of directors is to
3, 2, 1, 4.
The liquidation of a partnership is a process containing the following steps: 1 Pay partnership liabilities in cash. 2 Allocate the gain or loss on realization to the partners on their income ratios. 3 Sell noncash assets for cash and recognize a gain or loss on realization. 4 Distribute remaining cash to partners on the basis of their remaining capital balances. Identify the proper sequencing of the steps in the liquidation process.
contra stockholders' equity account
Treasury Stock is a(n)
authorized shares
Which of the following represents the largest number of common shares?
Limited liability of stockholders
Which of the following statements is not considered a disadvantage of the corporate form of organization?
dividend
a distribution of cash or stock to stockholders on a pro rata (proportional) basis types: Cash, Property, Stock
salaires
a monthly or yearly rate
False
T or F 1. A partnership is an association of three or more persons to carry on as co-owners of a business for profit.
False
T or F 2. The legal requirements for forming a partnership can be quite burdensome.
True
T or F 5. The act of any partner is binding on all other partners, even when partners perform business acts beyond the scope of their authority.
True
T or F 6. Each partner is personally and individually liable for all partnership liabilities.
False
T or F 7. When a partnership is dissolved, the assets legally revert to the original contributor.
True
T or F 8. In a limited partnership, one or more partners have unlimited liability and one or more partners have limited liability for the debts of the firm.
False
T or F 9. Mutual agency is a major advantage of the partnership form of business.
False
T or F 3. A partnership is not an entity for financial reporting purposes.
False
T or F 4. The net income of a partnership is taxed as a separate entity.
DEBIT Notes Payable Interest Payable Interest Expense CREDIT Cash
Apr. 1, 2018 Pays principal and interest to First National Bank.
current liability
Dividends Payable is classified as a(n)
DEBIT Notes Payable Interest Payable Interest Expense CREDIT Cash
Feb. 1, 2018 Pays principal and interest to Lyon County State Bank.
the market value.
Information that is not generally reported for each class of stock on the balance sheet is
DEBIT Cash CREDIT Notes Payable
July 1, 2017 Borrows $50,000 from First National Bank by signing a 9-month, 8% note.
DEBIT Cash CREDIT Notes Payable
Nov. 1, 2017 Borrows $66,000 from Lyon County State Bank by signing a 3-month, 6% note.
both dividends and assets in the event of liquidation
Preferred stockholders have a priority over common stockholders as to
