Exam 2: Analyzing Business Transactions

A company has assets of $56,320 and liabilities of $29,500.The owner's equity is $85,820.

A withdrawal of funds by the owner for personal use is considered a business expense.

The account used to record amounts that will be collected from charge account customers in the future are referred to as ___________________.

When equipment is purchased for cash,

Examples of assets are:

Guy McKinley started the McKinley Charter Service at the beginning of August 2016.On August 31,2016,the accounting records of the business showed the following information.Prepare an income statement and a statement of owner's equity for the month and a balance sheet as of August 31,2016.

The figure below shows the transactions for Sawyer Architecture Services during June.Greg Sawyer opened this business on June 1 with a capital investment of $72,000 (Transaction 1). What was the net income or net loss for Sawyer Architecture Services for the month of June?

If there is an excess of expenses over revenues,the excess represents a profit.

The account used to record amounts that are owed for goods or services purchased on credit are known as ___________________.

When a business pays cash for salaries,assets decrease and expenses ___________________.

The statement of financial position is another term for which financial statement?

Cullen Beatty plans to start a consulting business-Cullen Consulting Services.In preparation to do this,on April 1,2016,he invested $50,000 in cash and $19,000 in equipment,and opened an account at Office Plus by purchasing $1,500 in office supplies which is due by the end of the month.He then signed a one-year lease agreement on an office building for $6,000,paying the full amount in advance. Prepare a Balance Sheet for Cullen Consulting Services as of April 1,2016,before he conducts any services.

The statement of owner's equity is prepared before the balance sheet so that the ending capital balance is available.

The transactions listed below took place at the Mitchell Advertising Agency.These transactions affected the following accounts.Indicate the accounts affected and use plus and minus to show the changes caused by each transaction. Issued checks to pay salaries

During October,a firm had the following transactions involving revenue and expenses.Did the firm earn a net income or incur a net loss for the period? What was the amount? Paid $1,200 for rent Provided services for $2,750 in cash Paid $250 for telephone service Provided services for $1,900 on credit Paid salaries of $1,675 to employees Paid $350 for office cleaning service

Assets always equal debts of the business plus the financial interest of the owner.

Which financial statement is a representation of the accounting equation?

An Income Statement is all of the following except:

The income statement shows

If the income statement covered a six-month period ending on November 30,2013,the third line of the income statement heading would read