Accounting 100 - Mid-term Exam

Total assets of Douglas Fuhr Furniture Co. are $38,000 and the total liabilities are $13,000. What is the amount of the owner's equity?

$25,000 Explanation Assets = Liabilities + Owners' Equity: $38,000 = $13,000 + $25,000 ($38,000 - $13,000 = $25,000)

The journal entry to record the performance of services for cash would include.

A debit to Cash and a Credit to Fees Income.

The journal entry to record a payment made in January for rent for the months of February and March would include

A debit to Prepaid Rent and a credit to Cash.

When equipment is purchased on credit,

Assets and liabilities increase.

Which of the following accounts is not closed?

Cash

Anna Conda Landscaping service received a bill for the utilities used during September. The bill will be paid in October. The journal entry to record the utility bill received is:

Debit Utilities Expense; Credit Accounts Payable.

A withdrawal of funds by the owner for personal use is considered a business expense.

False

The expenses for a period are reported on the balance sheet.

False.

After the closing entries are posted, the balance of the owner's capital account agrees with the amount of owner's equity shown on the balance sheet for the period.

True

One of the purposes of closing entries is to transfer net income or net loss for the period to the owner's capital account.

True

The postclosing trial balance contains balance sheet accounts only.

True

Transactions are entered in the journal in chronological order.

True

When cash is paid to a creditor, the firm's liabilities decrease.

True

The journal entry to record the receipt of cash from credit clients on account would include

a debit to Cash and a credit to Accounts Receivable.

A company purchased equipment costing $15,000. They paid $1,000 right away and agreed to pay the balance in 30 days, the journal entry to record the purchase of equipment would include

a debit to Equipment for $15,000, a credit to Cash for $1,000 and a credit to Accounts Payable for $14,000.

When an entry is made in the general journal,

accounts to be debited should be listed first.

The Financial Accounting Standards Board is responsible for

developing generally accepted accounting principles.

Determine the accounts and amounts to be debited and credited for the above transactions for Monroe's Auto Repair.

https://docs.google.com/document/d/1FDQ57ekN_9ii1xL1H4Owp9HpI8MZk32dftQOl-sAltw/edit?usp=sharing

The partial worksheet for the Lorado Insurance Agency for the month ended October 31, 2019, is shown below. The owner made no additional investments during the month.

https://docs.google.com/document/d/1Gqf1QVaVsjLYMmYwgmwQckJS-qehd103ocvutaq98T8/edit?usp=sharing

Owners and managers need financial information in order to

make decisions.

One purpose of closing entries is to give zero balances to

revenue and expense accounts.

The balance in the account Accumulated Depreciation, Equipment will

will be reported on the Balance Sheet.

At the end of the first month of operations for SloMo Delivery Service, the business had the following accounts: Accounts Receivable, $1,120; Prepaid insurance, $420; Equipment, $35,400 and Cash, $40,250. On the same date, SloMo owed the following creditors: Simpson Supply Company, $11,200; Allen Office Equipment, $9,100. 1. The total assets for SloMo Delivery Service are. 2. The total amount of Liabilities is. + = Plus symbol

1. $77,190 2. $20,300 Explanation: 1. Assets = Accounts Receivable, $1,120 + Prepaid Insurance, $420 + Equipment $35,400 + Cash, $40,250 = $77,190. 2. Liabilities = Simpson Supply Company, $11,200 + Allen Office Equipment, $9,100 = $20,300.

The Accounts Payable accounts has a $3,200 credit balance. An entry for the payment of $1,100 on the amount owed is recorded and posted. The new balance of the accounts payable account is

A $2,100 credit balance. Explanation: $3,200 credit - $1,100 debit = $2,100 credit.

On December 1, the Accounts Receivable account had a $5,000 balance. The business received $400 during the month from its charge-account customer. After posting this transaction, the new balance in the Accounts Receivable account is

A $4,600 debit balance. Explanation $5,000 debit - $400 credit = $4,600 debit

If a business receives $5,000 on account from clients who owed money for services previously billed, identify the effect on the accounting equations.

Assets remain the same and owner's equity remains the same. Explanation: Cash is increased by $5,000 but Accounts Receivable is reduced by $5,000 so there is no change in total assets.

Read the description of following adjustments that are required at the end of the accounting period for Riley Furniture Restoration. Determine the account and amount to be debited and the account and amount to be credited.

https://docs.google.com/document/d/1WMajChUu_rhIuAxaH6KlrQV39V2lgsW6dPEos7IzW_E/edit?usp=sharing Explanation A. $1,900 - $750 = $1,150 used B. $1,560/4 = $390 per month C. $1,150 expired D. ($25,200 - $0)/168 months = $150 per month

On December 31, the ledger of Hartley Engineering Company contained the following account balances:

https://docs.google.com/document/d/1m7jaJEJttxywUONdpa6Cb2ikN8uQpbuUy1qckb2DiE4/edit?usp=sharing

The area of accounting that involves the preparation of internal reports for a firm's executives and the analysis of the data in these reports to aid in decision making is known as

managerial accounting.