Chapter 1

Assets for Smith Company are $30,000. Liabilities are $20,000. What is the Equity for Smith Company?

$10,000

Graff Company had the following data for the month of November: Retained Earnings, November 1 = $10,000 Net Income = $2,000 Dividends = $1,200 What is the amount of Retained Earnings on November 30 for Graff Company?

$10,800

Pack Company had the following data: Service Revenue $10,000 Cash $12,000 Accounts Receivable $3,000 Office Supplies $4,000 Rent Expense $2,000 Salaries Expense $1,200 Utilities Expense $800 Accounts Payable $3,200 What is the amount of total Assets to report on the Balance Sheet for Pack Company?

$19,000

Pack Company had the following data: Service Revenue $10,000 Cash $12,000 Accounts Receivable $3,000 Office Supplies $4,000 Rent Expense $2,000 Salaries Expense $1,200 Utilities Expense $800 Accounts Payable $3,200 What is the amount of total Liabilities to report on the Balance Sheet for Pack Company?

$3,200

Assets for Jones Company are $60,000. Equity is $20,000. How much are Liabilities for Jones Company?

$40,000

Tanger Company had the following data: Service Revenue = $10,000 Rent Expense = $2,000 Salaries Expense = $1,200 Utilities Expense = $800 What is the Net Income for Tanger Company?

$6,000

Consider the following accounting terms and​ definitions, and match each term to the​ definition: 1. Sole proprietorship 2. Faithful representation 3. Partnership 4. IFRS 5. Corporation 6. Audit 7. Cost principle 8. FASB 9. Creditors 10. SEC

1. Owner is referred to as a proprietor 2. Asserts that accounting information should be complete, neutral, and free from material error 3. Has two or more owners (called partners) 4. Set of global accounting guidelines, formulated by the IASB 5. Type of entity that is designed to limit personal liability exposure of owners to entity's debts 6. An examination of a company's financial statements and records 7. Holds that fair market value should not be used over actual costs 8. Stands for Financial Accounting Standards Board 9. Person or business lending money 10. U.S. governmental agency that oversees the U.S. financial markets

Jones Company had net income of $10,000 for the year. Beginning total assets were $150,000 and ending assets were $200,000. What is Jones Company's return on assets (ROA) for the year?

5.7%

An alternative way to write the accounting equation would be:

Assets - Liabilities = Equity

Williams Travel Service pays $100 cash for salaries expense. How would this transaction affect the accounting equation?

Assets decrease and Equity decreases.

Williams Travel Service purchased land for cash. How would this transaction affect the accounting equation?

Assets increase and Assets decrease

Williams Travel Service performed travel booking services for a customer on account for $1,200. How would this transaction affect the accounting equation?

Assets increase and Equity increases.

Williams Travel Service purchased office supplies on account for $300. How would this transaction affect the accounting equation?

Assets increase and Liabilities increase.

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

Financial Accounting

In the United States, the privately funded organization that oversees the creation and governance of accounting standards is called:

Financial Accounting Standards Board (FASB)

The guidelines for accounting information are called:

Generally Accepted Accounting Principles (GAAP)

Which financial statement is prepared first?

Income Statement

A field of accounting that focuses on providing information for internal decision makers is:

Managerial Accounting

Donler Tax Service performed services on account for $10,200 and paid expenses totaling $5,400. What is Donler's Net Income or Net Loss?

Net Income of $4,800

During 2024​, Tranquil Waters Spa reported revenue of $60,000. Total expenses for the year were $40,000. Tranquil Waters Spa ended the year with total assets of $50,000​, and it owed debts totaling $15,000. At​ year-end 2023​, the business reported total assets of $30,000 and total liabilities of $15,000. Requirement 1. Compute Tranquil Waters ​Spa's net income for 2024. Begin by identifying the formula to calculate net income and then enter the amounts to solve for net income. Requirement 2. Did Tranquil Waters Spa's stockholders' equity increase or decrease during 2024​? By how​ much?

Requirement 1. Revenues - Expenses = Net Income $60,000 - $40,000 = $20,000 Requirement 2. Tranquil Waters Spa's stockholders' equity increased during the year by $20,000.

The following are types of business organizations EXCEPT:

Stockholders

Awesome Sweets sells different kinds of cookies, candies, and other sweets. Awesome Sweets has a return on assets (ROA) of 6.9% How does Awesome Sweets know if the 6.9% ROA is a good return to attract possible investors?

The return on assets (ROA) would have to be compared to the ROA's of competing business that sell the same type of products. If 6.9% is higher than other companies in the same type of business, then it would be a good investment.

For each of the users of accounting​ information, identify whether the user is an external decision maker​ (E) or an internal decision maker​ (I): a. customer b. company manager c. internal revenue service d. lender e. investor f. controller g. cost account h. SEC

a. E b. I c. E d. E e. E f. I g. I h. E