ACCT 2301 Chapter 1 SB - Homework assignment PDF

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ACCT 2301 Chapter 1. Introducing Financial Statements SmartBook6

A company pays monthly office rent of $1,500 in cash. Demonstrate how to use the accounting equation to record the transaction by completing the following sentence: The company would increase (expenses) and (decrease) (assets) in the accounting equation.

A corporation's equity has two main parts. Identify these two parts. Contributed capital

Retained earnings

A customer of Landen Consulting Company makes a $400 payment of cash on a bill for services provided last month. Record this transaction into the accounting equation of Landen Consulting by: (Check all that apply.) decreasing Accounts Receivable, $400. increasing Cash, $400.

A(n) _____ user of accounting information does not directly run the organization.

External

ABC Co. performs $200 of services for a customer, but does not get paid right away. Demonstrate how ABC Co. would record this transaction in the accounting equation by completing the following sentence. Note: enter one answer for each blank. ABC Co. would increase the Accounts (Receivable) account and increase the (Revenue) account in the accounting equation.

An external user of accounting information

does not directly run the organization

An internal user of accounting information is: (Check all that apply.) a human resource manager, a user who is directly involved in managing and operating an organization, a marketing manager

An owner of a corporation is called a

shareholder

Bob's Bakery is making a partial payment of $70 for baking supplies it purchased in a previous month. Record this transaction in the accounting equation of Bob's Bakery by decreasing the Accounts (Payable) account and decreasing the (Cash) account.

Bob's Bakery receives its utility bill of $800 for the month and pays it immediately. Record this transaction in the accounting equation. Increase Expenses and decrease Cash.

Define what the income statement reports by completing the following sentence: The income statement describes a company's (revenues) and (expenses) along with the resulting net income or loss over a period of time due to earnings related activities.

Describe the order in which a company prepares financial statements. 1. Income Statement 2. Statement of Retained Earnings 3. Balance Sheet 4. Statement of Cash Flows

Dividends cause a(n) account.

(decrease)

in equity and are recorded directly in the

(dividends)

Dividends of $60 cash are paid to the corporation's stockholders. You would record this transaction in the accounting equation by decreasing the (cash) account and (increasing) the Dividends account.

During September, Sally's Hair Salon purchased $900 of supplies on account. In October, Sally's wants to make a payment of $200 on this bill. Record the October transaction into Sally's accounting equation by: (Check all that apply.) decreasing Accounts Payable, $200. decreasing Cash, $200.

Equity is composed of contributed capital and

(retained earnings)

From the following statements, identify the correct definition of a liability. obligation to provide assets, products or services to others.

From the following statements, identify the correct definition of equity. owners on the assets of a business.

A company's

The claims of the

From the following statements, select the one that describes the effect of dividends on equity. Dividends cause equity to decrease.

Generally accepted accounting principles (GAAP) wants information to have: representation, relevance

faithful

Given that Jacob's Chocolates Company had beginning retained earnings of $4,000; net income during the period of $10,000; and dividends of $300 calculate the ending balance in the retained earnings account. $13,700

Given the accounts below, choose all of the ones that affect equity. (Check all answers that apply.) Common Stock, Revenues, Expenses, Dividends

Given the following list of accounts, identify which are classified as assets. Select all that apply. Accounts Receivable, Building, Supplies, Cash, Land

Given the following list of accounts, identify which are classified as liabilities. (Check all that apply.) Wages Payable, Accounts Payable, Taxes Payable, Notes Payable

Given the following lists of accounts, choose the one that contains only liabilities. Payable, Accounts Payable, Wages Payable

Given the following lists of accounts, choose the one that includes only assets. Supplies, Accounts Receivable

Taxes

Cash, Building,

Given the list of accounts below, identify which of them would appear on a balance sheet. (Check all that apply.) Supplies, Retained earnings, 12/31, Cash, Equipment, Accounts Payable

Given the statements below, choose the most accurate definition of owner investments. issuances

How would you characterize a company's Accounts Receivable account?

Identify the correct definition of an asset:

Stock

It is an asset account.

Something of value that a business owns or controls

Identify the expanded accounting equation from the options below. Common Stock - Dividends + Revenues – Expenses

Assets = Liabilities +

Identify which of the following lists of accounts would belong on the statement of retained earnings. Retained earnings and Dividends

Identify which of the following statements is correct as to why accounting is important. live in an information age whereby accounting information impacts everyone.

We

If a customer makes a partial payment of $100 on a service for which you have already billed him, you would record this transaction into the accounting equation by: increasing Cash and decreasing Accounts Receivable.

Jack Pickle decided to start a small business as a corporation. His initial investment was $4,000 cash in exchange for common stock. Demonstrate how to record this transaction in the accounting equation. Increase Cash by $4,000; Increase Common Stock by $4,000.

Jackson Company purchased office equipment costing $3,000 for his business and paid immediately. Record this transaction in the accounting equation by: decreasing Cash; increasing Equipment

Jackson's Catering Company provided cookies worth $3,000 to the local college. The college paid immediately. Record this transaction in Jackson's accounting equation by: increasing Cash; increasing Revenues

Johna's Plant Nursery Company pays the salaries of its two employees. How will this transaction affect the accounting equation? Select all that apply. Equity will be decreased, salaries expense will be increased

Melton's Door Company pays rent on the building facilities of $5,000 on May 1. Show how to record this transaction in the accounting equation of Melton's Door Company. Rent Expense will be increased.

Net income is calculated using the following formula: Use one word for each blank.

(revenues) - (expenses) = Net income.

On 6/25, supplies costing $1,000 were purchased, but only $400 of this amount was paid on 6/25. The remainder of the bill was on credit. To record this transaction on 6/25: Supplies would be increased by $(1,000); Cash would be decreased by $(400) and Accounts Payable would be increased by $(600).

On 8/1, supplies costing $500 were purchased on credit. Record this transaction in the accounting equation by: increasing Supplies, and increasing Accounts Payable

On May 1, Mary's Morsels Company provided catering services at a wedding. The bride is billed $4,000 and will pay during the following month. Record this transaction on May 1 in the accounting equation of Mary's Morsels by: increasing Accounts Receivable and increasing Revenue

Other names for equity in a corporation include:

Owner investments cause a(n)

(increase)

net assets

in equity.

Russell's Consulting Services Company provided $1,000 of services to the local college and immediately collected $700, but the college wants to pay the rest next month. Record this transaction in the accounting equation for Russell's Consulting Service by: increasing both Cash and Accounts Receivable; and increasing Revenues

Sally Smith decided to start a sea shell business organized as a corporation. Her initial investment in the business consisted of $10,000 in cash in exchange for common stock. Record this transaction in the accounting equation of the new business by: increasing Cash; increasing Common Stock

Select internal users of accounting information from the choices below. (Check all that apply.) Distribution managers Purchasing managers

Select the account that would be decreased if Hillary's Hair Salon decides to pay $40 cash dividends to its shareholders. Cash

Smith Company purchased $100 of supplies for her business and paid immediately. She would record this transaction in the accounting equation by which of the following? Decrease Cash; increase Supplies.

The _____ is the first financial statement to be prepared.

The Accounts Payable account is a(n) ______ account.

income statement

Liability

The correct definition of a balance sheet includes which of the following statements? (Check all that apply.) The statement reports assets, liabilities and equity at a point in time. The statement reports the financial position of a company at a point in time. The statement reports the equality of the accounting equation at any point in time.

The correct definition of an income statement includes which of the following? describes a business's revenues and expenses over a period of time.

The statement

The expanded accounting equation is defined as: (Assets) = Liabilities + Common Stock + (revenues) - (expenses) - Dividends. Do not include "account" or "accounts" in your answer.

The four major types of transactions that affect equity in a business are (revenue) accounts, (expense) accounts, dividends and common stock. Note: enter one word for each blank.

The statement of retained earnings explains changes in equity from net income (or loss) and from any ______ over a period of time. (Select the accounts below which will correctly complete this question.) dividends

To record the purchase of supplies for cash, the correct entry into the accounting equation would include an increase to (Supplies) and a decrease to (Cash).

True or false: By definition, owner investments increase equity and are called stock issuances. True

Users of accounting information can be divided into two main groups. These groups include: internal and external

Users who do not directly run the organization and have limited access to accounting information are known as (external) users.

What are Generally Accepted Accounting Principles? financial accounting practice.

What is a shareholder?

The concepts and rules that govern

An owner of a corporation.

When a business provides a service to a customer "on credit", it means that: (Check all that apply.) an asset has been created or increased. the business will receive payment for its services at a later time. Accounts Receivable will be increased.

When recording transactions into the accounting equation, which of the following statements are correct? (Check all that apply.) After recording the transaction, total assets will always equal total liabilities plus equity. The accounting equation must always remain in balance.

When supplies are purchased on credit it means that: (Check all that apply.) a liability has been incurred. the Accounts Payable account will be increased. the business will pay for the supplies at a later time.

When using the accounting equation, recording the purchase of equipment for cash would include an increase to the (Equipment) account and a decrease to the (Cash) account.

Which list of accounts below, identifies only accounts that would appear on a balance sheet. Common Stock, Equipment, Accounts Payable

Which of the following correctly depicts the accounting equation? Equity

Assets = Liabilities +

Which of the following statements below lists the rules of entering transactions into the accounting equation? The accounting equation must always remain in balance so that assets always equal the sum of liabilities and equity.

Which of the following statements best represents the accounting equation? The total of everything owned by a business must always equal the total of what the business owes to creditors and owners.

Which of the following statements explain how the accounting equation applies to businesses? Check all that apply. The equation reflects that the total of what a business owns at any point in time will equal the total of what it owes creditors and owners. The equation states that Assets = Liabilities + Equity. The relation of assets, liabilities and equity is reflected in the equation. The equation applies to all transactions.

Which of the following statements is correct regarding owner investments? investments cause equity to increase.

Which of the following statements is correct regarding revenues? increase.

Owner

Revenues cause equity to

Which of the following statements is/are true regarding the effect of revenues on the equity of a business? (Check all that apply.) Revenues that increase equity have many forms, such as consulting services and commissions from services. Revenues cause equity to increase.

Which of the statement(s) below define(s) an asset? (Check all that apply.) An amount owned, Resources with expected future benefits, Resources controlled by the business

Which of the statements correctly represents the accounting equation? will always equal what it owes to creditors and owners.

What a business owns

Which statement below defines why accounting information is useful? and communicates business transactions.

It identifies, records,

Which statements below define a liability? (Check all that apply.) Obligations to provide assets, products or services to others; An amount owed to a creditor; A creditor's claims on the assets of a business

Which statements below define equity? (Check all that apply.) assets of the business. Equity equals assets minus liabilities.

Why does a business need accounting information? and communicates financial information.

Claims of the owner(s) on the

Accounting records business transactions...