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Exam 1: Accounting in Action

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Question 61

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The following transactions represent part of the activities of Tea Party Company for the first month of its existence. Indicate the effect of each transaction upon the total assets of the business by one of the following phrases: increased total assets decreased total assets or no change in total assets. (a) The owner invested cash to start the business. (b) Purchased a computer for cash. (c) Purchased office equipment with money borrowed from the bank. (d) Paid the first month's utility bill. (e) Collected an accounts receivable. (f) Owner withdrew cash from the business.

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(a) Increased total assets.
(b...

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Question 62

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The first part of the accounting process is

A) communicating.
B) identifying.
C) processing.
D) recording.

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Question 63

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Match the following terms and definitions. a. Accounts receivable c. Accounts payable b. Creditor d. Note payable $\underline{\quad\quad}$ (1) Amounts due from customers $\underline{\quad\quad}$ (2) Amounts owed to suppliers for goods and services purchased $\underline{\quad\quad}$ (3) Amounts owed to bank $\underline{\quad\quad}$ (4) Party to whom money is owed

The origins of accounting are generally attributed to the work of

Accounting communicates financial information about a business enterprise to both internal and external users.

Generally accepted accounting principles are

The starting point of the accounting process is

At October 1 Flambo Company reported owner's equity of $70000. During October the owner made additional investments of $4000 and the company earned net income of $14000. If owner's equity at October 31 totals $78000 what amount of owner drawings were made during the month?

Accountants record both internal and external transactions.

Eli's Electronic Repair Shop started the year with total assets of $300000 and total liabilities of $200000. During the year the business recorded $400000 in electronic repair revenues $300000 in expenses and Eli withdrew $50000. Eli's Owner's Capital balance changed by what amount from the beginning of the year to the end of the year?

The economic entity assumption requires that the activities of an entity be kept separate and distinct from the activities of its owner and all other economic entities.

Accountants who are employees of business enterprises are referred to as ________________ accountants.

Ethics are the standards of conduct by which one's actions are judged as

The origins of accounting are attributed to Luca Pacioli a famous mathematician.

Liabilities of a company are owed to

Presented below is information related to the sole proprietorship of Bill Gaits consultant. $\begin{array}{lr}\text { Service revenue-2016 } & \$ 320,000 \\\text { Total expenses-2016 } & 235,000 \\\text { Assets, January 1, 2016 } & 83,000 \\\text { Liabilities, January 1, 2016 } & 64,000\\\text { Assets, December 31, 2016 } & 158,000 \\\text { Liabilities, December 31, 2016 } & 90,000 \\\text { Drawings-2016 } & ?\end{array}$ Instructions Prepare the 2016 owner's equity statement for Bill Gaits' consulting company.

The basic accounting equation cannot be restated as

The body of theory underlying accounting is not based on

Expressing an opinion as to the fairness of the information presented in financial statements is a service performed by CPAs.

Owner's equity is best depicted by the following: