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Exam 1: Introduction to Accounting and Business

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Question 101

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Collins Landscape Company purchased various landscaping supplies on account to be used for landscape designs for its customers. How will this business transaction affect the accounting equation?

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Increase assets (Su...

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Question 102

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Land originally purchased for $30,000 is sold for $62,000 in cash. What is the effect of the sale on the accounting equation?

A) assets increase by $62,000; owner's equity increases by $62,000
B) assets increase by $32,000; owner's equity increases by $32,000
C) assets increase by $62,000; liabilities decrease by $30,000; owner's equity increases by $32,000
D) assets increase by $30,000; no change in liabilities; owner's equity increases by $62,000

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Question 103

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If total liabilities decreased by $46,000 during a period of time and owner's equity increased by $60,000 during the same period, the amount and direction (increase or decrease) of the period's change in total assets would be a

Using the following accounting equation elements and their balances, prepare, in good form, an income statement for Heavenly Futures Company for the month ended August 31.? $\begin{array} { l r } \text { Telephone expense } & \$ 1,150 \\\text { Cash } & 3,000 \\\text { Accounts payable } & 1,540 \\\text { Jason Heavenly, drawing } & 800 \\\text { Fees earned } & 15,700 \\\text { Rent expense } & 1,400 \\\text { Supplies } & 140 \\\text { Accounts receivable } & 1,500 \\\text { Computer equipment } & 20,000 \\\text { Jason Heavenly, capital (August 1) } & 14,320 \\\text { Wages expense } & 4,800 \\\text { Utilities expense } & 750 \\\text { Notes payable } & 2,400 \\\text { Office expense } & 420\end{array}$ ?

Match the following business types with each business listed below. Each may be used more than once. -A health club and spa

An account receivable is typically classified as a revenue.

If an owner wanted to know how money flowed into and out of the company, which financial statement would the owner use?

Indicate whether each of the following accounts represents an asset, liability, or owner's equity: (a)Accounts Payable (b)Wages Expense (c)Capital (d)Accounts Receivable (e)Withdrawal (f)Land

Match each of the following characteristics with the financial statement that best describes it. Each may be used more than once. -Has three sections: operating, investing and financing

Liabilities are reported on the

Four financial statements are usually prepared for a business. The statement of cash flows is usually prepared last. The statement of owner's equity (OE) , the balance sheet (B) , and the income statement (I) are prepared in a certain order to obtain information needed for the next statement. In what order are these three statements prepared?

Identify each of the following as either internal or external users of accounting information. $\begin{array} { | l | l | } \hline \text { A. } & \text { Payroll manager } \\\hline \text { B. } & \text { Bank } \\\hline \text { C. } & \text { President's secretary } \\\hline \text { D. } & \text { Internal Revenue Service } \\\hline \text { E. } & \text { Raw material vendors } \\\hline \text { F. } & \text { Social Security Administration } \\\hline \text { G. } & \text { Health insurance provider } \\\hline \text { H. } & \text { Managerial accountant } \\\hline\end{array}$

The accounting equation can be expressed as Assets - Liabilities = Owner's Equity.

Selected transactions completed by a proprietorship are described below. Indicate the effects of each transaction on assets, liabilities, and owner's equity by inserting "+" for increase and "−" for decrease in the appropriate columns at the right. If appropriate, you may insert more than one symbol in a column.

Equipment with an estimated market value of $30,000 is offered for sale at $45,000. The equipment is acquired for $15,000 in cash and a note payable of $20,000 due in 30 days. The amount used in the buyer's accounting records to record this acquisition is

Owner's withdrawals

Shiny Kar Company had the following transactions. For each transaction, show the effect on the accounting equation by putting the amount and direction (+, -, or NC for no change) in each box of the table below.?

A summary of cash flows for Evelyn's Event Planning for the year ended December 31 is shown below.

Michael Anderson is starting a computer programming business and has deposited an initial investment of $15,000 into the business cash account. Identify how the accounting equation will be affected.

All of the following are general-purpose financial statements except a (n)