FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 1: Introduction to Accounting and Business

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 31

Essay

Review LaterAdd Note

Review Later

Dave Ryan is the owner and operator of Ryan's Arcade. At the end of its accounting period, December 31, Ryan's Arcade has assets of $450,000 and liabilities of $125,000. Using the accounting equation, determine the following amounts: (a)owner's equity as of December 31 of the current year (b)owner's equity as of December 31 at the end of the next year, assuming that assets increased by $65,000 and liabilities increased by $35,000 during the year

Correct Answer

verified

(a)$325,000 ($450,0...

View Answer

Show Answer

Question 32

Essay

Review LaterAdd Note

Review Later

The following data were taken from Miller Company's balance sheet:​​ $\begin{array}{lcc} & \text { Dec. 31, Year } 2 & \text { Dec. 31, Year 1 } \\\text { Total liabilities } & \$ 150,000 & \$ 105,000 \\\text { Total owner's equity } & 75,000 & 60,000\end{array}$ (a) Compute the ratio of liabilities to owner's equity. Round your answer to one decimal place. (b) Has the creditors' risk increased or decreased from December 31, Year 1, to December 31, Year 2?

Correct Answer

verified

(a) 12/31/Year 2: $1...

View Answer

Show Answer

Question 33

Multiple Choice

Review LaterAdd Note

Match each transaction with its effect on the accounting equation. Each letter may be used more than once. -Paid part of an amount owed to a creditor

Which of the following is not true of accounting principles?

Purchasing supplies on account increases liabilities and decreases equity.

The unit of measure concept

On May 20, White Repair Service extended an offer of $108,000 for land that had been priced for sale at $140,000. On May 30, White Repair Service accepted the seller's counteroffer of $115,000. On June 20, the land was assessed at a value of $95,000 for property tax purposes. On July 4, White Repair Service was offered $150,000 for the land by a national retail chain. At what value should the land be recorded in White Repair Service's records?

A business paid $7,000 to a creditor in payment of an amount owed. The effect of the transaction on the accounting equation was to

The accounting equation elements and their balances of Awesome Travel Services at December 31 are listed below. There were no additional investments or withdrawals by J. Trendsetter during the year.? $\begin{array} { l r l r } \text { Accounts payable } & \$ 12,000 & \text { J. Trendsetter, capital (January 1) } & \$ 10,000 \\\text { Accounts receivable } & 14,000 & \text { Supplies } & 1,000 \\\text { Cash } & 18,000 & \text { Income taxes expense } & 1,300 \\\text { Computer equipment } & 21,000 & \text { Utilities expense } & 8,000 \\\text { Fees earned } & 78,000 & \text { Wages expense } & 25,000 \\\text { Rent expense } & 10,000 & \text { Supplies expense } & 1,700\end{array}$ Prepare an income statement, statement of owner's equity, and a balance sheet as of December 31.?

Daniels Company is owned and operated by Thomas Daniels. The following selected transactions were completed by Daniels Company during May: 1.Received cash from owner as additional investment, $55,000. 2.Paid creditors on account, $7,000. 3.Billed customers for services on account, $2,565. 4.Received cash from customers on account, $8,450. 5.Paid cash to owner for personal use, $2,500. 6.Received the utility bill, $160, to be paid next month. ?Indicate the effect of each transaction on the accounting equation by: (a)Accounting equation element type: (A) assets, (L) liabilities, (OE) owner's equity, (R) revenue, and (E) expense b)Name of accounting equation element c)The amount of the transaction d)The direction of change (increase or decrease) in the account affected Note: Each transaction has two entries.?

Bob Johnson is the sole owner of Johnson's Carpet Cleaning Service. Bob purchased a personal automobile for $10,000 cash plus he took out a loan for $20,000 in his name. Describe how this transaction is related to the business entity concept.

The monetary value charged to customers for the performance of services sold is called a (n)

Two common areas of accounting that respectively provide information to internal and external users are

If total assets decreased by $30,000 during a specific period and owner's equity decreased by $35,000 during the same period, the period's change in total liabilities was a $65,000 increase.

Financial accounting reports are relevant only to users within the business.

Eric Wood, CPA, was organized on January 1 as a proprietorship. List the errors that you find in the following financial statements and prepare the corrected statements for the three months ended March 31.+ ?

Revenue is earned only when money is received.

Paying an account payable increases liabilities and decreases assets.

Identify which of the following items would appear on a balance sheet. (a)Cash (b)Fees earned (c)Joe Brown, capital (d)Wages payable (e)Rent expense (f)Prepaid advertising (g)Land

The assets section of the balance sheet normally presents assets in