Accounting

Ten years ago, a corporation purchased a building for $140,000. At that time, the corporation felt that the building was worth $165,000. The current market value of the building is $420,000. The building has been assessed at $395,000 for property tax purposes. At which amount should the corporation record the building in its accounting records?

140,000

The asset account, Office Supplies had a beginning balance of $5,200. During the accounting period, office supplies were purchased, on account, for $5,000. A physical count, on the last day of the accounting period, shows $2.100 of office supplies on hand. What is the amount of Supplies Expense for the accounting period?

2,300

The equity of Alliance Company is $160,000 and the total liabilities are $70,000. The total assets are

230,000

Wellness, a healthy living magazine, collected $492,000 in subscription revenue on May 31. Each subscriber will receive an issue of the magazine in each of the next 12 months, beginning with the June issue. The company uses the accrual method of accounting. What is the balance in the Unearned Revenue account°as of December 31?

287,000

The net income of Thomas Company was $75,000 for this year. The beginning balance for capital was $29,000 and the ending balance was $74,000. The company had no additional capital investments during the year. What was the amount of withdrawals during the year?

30,000

Diamond, Inc. had the following transactions during June: Performed services for $4,000 on account, received cash on account, $8,000; paid $900 for repair expense; paid $1,800 to a supplier that it owed from the previous month. What is the combined effect on Cash of these June transactions?

5,300 increase

Dynamic Production Services started the year with total assets of $100,000 and total liabilities of $40,000. The revenues and the expenses for the year amounted to $140,000 and $90,000, respectively During the year, the company did not receive any additional capital, but the owner did withdrawal $50,000. Calculate Dynamic's net income for the year.

50,000

Precision Camera Services started the year with total assets of $90,000 and total liabilities of $55,000. The revenues and the expenses for the year amounted to $120,000 and $60,000, respectively. During the year, the company did not receive any additional capital, but the owner did withdrawal $55,000. What is the amount of equity at the end of the year?

55,000

Bayside Technical Services signed a contract on a six - month job for a client, starting on March 1. Bayside will collect $36,000 from its customer when the job is finished but the revenue is earned evenly over the six months. On March 31, before adjusting entries are made, Bayside's Accounts Receivable account had a debit balance of $6,000. After the March 31 monthly adjusting entry has been made, what will be the balance in Accounts Receivable?

6,000

Athens Delivery Service is hired on October 31, 208 to perform services, beginning on November 1, 208. The delivery services will be performed for six months at a rate of $3,300 per month. Athens' fiscal year ends on December 31. What amount of service revenue should be recorded as an adjusting entry on December 31, 20Y8?

6,600

Improvements, a home improvement magazine, collected $1,920,000 in subscription revenue on June 30. Each subscriber will receive an issue of the magazine in each of the next 12 months, beginning with the July issue. The company uses the accrual method of accounting. What is the amount of Subscription Revenue that has been earned by the end of December? (Round any intermediate calculations to two decimal places, and your final answer to the nearest whole number.)

960,000

On September 1, 2024, Real Estate Professionals Company paid $6,000 in advance for an eight - month rental space covering the period of September 1, 2024 through April 30, 2025. The deferred expense was initially recorded as an asset. The company makes adjusting entries once a year at year - end. The adjusting entry on December 31, 2025 would include a

A debit of 2,500 to rent expense

Marcus has decided to open an auto - detailing business. He will pick up an automobile from the client, take it to his parents' garage, detail it, and return it to the client. If he does all of the work himself and takes no legal steps to form a special organization, which type of business organization, in effect, has he chosen?

A sole proprietorship

Which of the following statements is true of a trial balance?

A trial balance is a list of all accounts with their balances.

Green Lawns Company earned $500 for landscaping services rendered. The customer promised to pay at a later time. Which of the following accounts increased as a result of this transaction?

Accounts receivable

represents the right to receive cash in the future from customers for goods sold or for services performed

Accounts receivable

Which of the following statements is true of accrual basis accounting?

Accrual basis accounting is required by Generally Accepted Accounting Principles (GAAP).

Adams Company recorded the following journal entry on March 2nd Cash 6,500 Unearned revenue 6,500 From the journal entry above, identify the transaction on March 2nd

Adams received $6,500 for services to be performed at a later period

Which of the following is the correct accounting equation?

Assets = Liabilities + Equity

Which of the following financial statements lists the entity's assets, liabilities, and equity as of a specific date?

Balance sheet

Which of the following financial statements reports that total assets are equal to total liabilities plus total equity?

Balance sheet

A company receives payment from one of its customers on August 5 for services performed on July 21. Which of the following entries would be recorded if the company uses accrual basis accounting?

Cash 1,000 Accounts Receivable 1,000

Mars Electronic Company receives cash from the owner, John Tilden as an investment in the business The two accounts involved in this transaction are

Cash and Tilden, Capital Tilden,

A business makes a payment of $1,400 on a note payable. Which of the following journal entries would be recorded?

Cash is credited and notes payable is debited for $1,400

A business purchases equipment by paying $10,000 in cash and issuing a note payable of $17.500. Which of the following occurs?

Cash is credited for 10,000, equipment is credited for 27,500, and Notes payable is credited for 17,500

are professional accountants who serve the general public, not one particular company.

Certified public accountants

A listing of all accounts in numerical order is called a(n)

Charts of accounts

Princeton Financial Services Company purchased computers that are to be used in its consulting services. Based on the matching principle, what account, other than Computers, should appear on the balance sheet as of December 31?

Depreciation expense- computers

Which of the following appears on both the statement of owner's equity and the balance sheet?

Ending capital account

Which of the following statements is true of expenses?

Expenses decrease equity, so an expense account's normal balance is a debit balance.

The net income (or net loss) must be calculated after the statement of owner's equity is prepared.

False

Which of the following organizations is responsible for the creation and governance of accounting standards in the United States?

Financial Accounting Standards Board

Which of the following statements best defines financial statements?

Financial statements are business documents that report on a business in monetary terms, providing information to help users make informed business decisions.

GAAP refers to guidelines for accounting information in the United States. The acronym GAAP in this statement refers to​ ________.

Generally Accepted Accounting Principles

Which of the following is a decision made by an internal user?

How much money should the business budget for production?

Which of the following is the order of steps to journalize an entry?

Identify the accounts and the account type--->Decide whether each account increases or decreases, then apply the rules of debits and credits--->Record the transaction

What is the effect of the adjusting entry for Depreciation Expense?

It decreases total assets and increases total expenses.

Accounts Receivable is a(n____account and has a normal________ balance.

Liability; debit

Which of the following transactions will affect the balance of owner's capital?

Paid rent expense for the month

Saturn Company paid the rent for the current month in cash. Which of the following accounts will be used to record the transaction?

Rent Expense

Which of the following entries would be recorded by a company that uses the cash basis method of accounting?

Rent expense (D): 1,000 Cash (C): 1,000

Maxwell Plumbing Services eamed $500 by completing a job for Smith Company. The $500 earned by Maxwell Plumbing Services is its

Revenue

Which of the following statements is true of revenues?

Revenues increase equity, so a revenue account's normal balance is a credit balance.

Which of the following entries would be made because of the matching principle?

Salaries Expense 1,000 Salaries Payable 1,000

Which of the following is an example of a source document that provides the evidence and data for accounting transactions?

Sales invoice

Jones Financial Services Company performed accounting services for a client in December. A bill was mailed to the client on December 30. The company received the client's check by mail on January 5. Which of the following accounts should appear on the income statement for the year ended December 31 as related to the services performed?

Service revenue

Which of the following sequences is the normal sequence of flow of accounting data?

Source document → Journal → Ledger

The amount of net income is transferred from

The income statement to the statement of owner's equity

The accountant for Barnes Auto Repair Company failed to make an adjusting entry to record $5,000 of unpaid salaries for the last two weeks of the year. Which of the following is an effect of this omission?

The net income will be understated

The accountant of Reliable Consulting Company failed to make an adjusting entry to record $6,000 for unearned service revenues that were earned before the end of the fiscal year. Assume the company initially recorded a liability. Which of the following statements is true?

The total liabilities will be overstated

The accountant for Eagle Financial Services Company failed to make an adjusting entry to record $3,000 of telephone expenses for the last two months of the year. Which of the following statements is true?

The total liabilities will be understated

The accountant of Omega Company failed to make an adjusting entry to record $6,000 of unearned service revenue that has now been earned. Assume the deferred revenue was initially recorded as a liability. Which of the following statements is true?

The total revenue is overstated

Posting a transaction means

Transferring data from the journal to the ledger

An accounting firm collected cash on account. As a result of this transaction, total assets, liabilities, and equity are all unchanged.

True

Financial statements are business documents used to communicate information needed to make business decisions.

True

The balance sheet is prepared after the statement of statement of owner's equity.

True

The income statement is also called the statement of earnings.

True

The adjusted trial balance shows

account balances after adjustments

Jones Supply Services paid $350 cash, the amount owed from the previous month, to a materials supplier. Which of the following accounts decrease?

accounts payable

A business collects cash from a customer for services that were performed one month earlier. Which of the following accounts is credited?

accounts receivable

A business performs services for a customer for $26,000 on account. Which of the following accounts is debited?

accounts receivable

Westwood Supply Services received $1,000 cash from a customer; the amount was owed to the business from the previous month. Which of the following accounts will decrease as a result of this transaction?

accounts receivable

An adjusting entry that credits Salaries Payable is an example of a(n) ______

accrued expense

An adjusting entry that debits Accounts Receivable is an example of a(n)

accrued revenue

Revenue that has been earned but not yet collected in cash is called an)

accrued revenue

The sum of all the depreciation expense recorded to date for a depreciable asset is called​ ________.

accumulated depreciation

Which of the following is a contra account?

accumulated depreciation

Which one of the following account groups normally has a debit balance?

assets and expenses

Which of the following is a financial statement that presents a business's accounting equation?

balance sheet

Which of the following is used by both internal and external users?

balance sheet

When is a trial balance usually prepared?

before the financial statements are prepared

a depreciable assets cost minus accumulated depreciation is called

book value

Which of the following users would rely on managerial accounting information for decision - making purposes?

company managers

An accounting entry that is characterized by having multiple debits and/or multiple credits is called a _______ entry.

compound journal

If an adjusting entry includes a debit to Rent Expense, it indicates that the payment of rent had been previously recorded as a(n)

deferred expense

the advance cash payments of future expenses are called

deferred expenses

The liability created when a business collects cash from its customers before completing a service or delivering a product is called

deferred revenue

The advance cash receipts of future revenues are called​ ________.

deferred revenues

The entry to record depreciation includes a debit to the _______ account.

depreciation expense

The owners' claims to the assets of the business are called ________.

equity

The field of accounting that focuses on providing information for external decision makers is:

financial accounting

Managerial accounting provides information to

internal decision makers

Transactions are first recorded in a

journal

Which of the following is the record holding all the accounts, the changes in those accounts, and their balances?

ledger

Which one of the following account groups normally has a credit balance?

liabilities and revenues

Which one of the following account groups will decrease with a debit?

liabilities and revenues

A business renders services to a client and issues a sales invoice. The amount will be collected from the customer at a later time. Which of the following is true at the time the invoice is issued?

net income will increase

At the time the transaction occurred, which of the following would result in an increase in net income under the accrual basis of accounting, but would not result in an increase in net income under cash basis accounting?

performance of services on account

A business prepays four months' office rent. Which of the following accounts is debited?

prepaid rent

Journalizing a transaction involves ________.

recording the data only in the journal

Sarbanes-Oxley Act (SOX)

requires companies to take responsibility for the accuracy and completeness of their financial reports

Which of the following financial statements reports cash receipts and cash payments during a period of time?

statement of cash flows

To match expenses against revenues means to​ ________.

subtract expenses incurred during one period from revenues earned during that same period

Unearned revenue is recorded when

the business has collected cash, but not yet earned the revenue.

A business receives $40,000 for services that it will perform over the next four months. Which of the following accounts is credited?

unearned revenue

A liability created when a business receives cash from customers in advance of providing services or delivering goods is called a(n)

unearned revenue

Which of the following accounts would be used under the accrual basis of accounting, but not under cash basis accounting?

unearned revenue

If a company is using accrual basis accounting, when should it record revenue?

when services are performed, even though cash may be received at a later date

A posting reference column is used_____

when the information is transferred from the journal to the ledger

An internal document that helps summarize data for the preparation of financial statements is called a

worksheet