Exam 1: Accounting in Business

The records of Cohen's Toy Repair Co. at December 31, 2020 showed the following account balances: -Calculate the balance of the account "Charlie Inuvic, Capital", at December 31, 2020

On May 1, Fiona Nash formed a computer consulting business. In order to start the business, she invested $10,000 in equipment. Enter the appropriate amounts into the accounting equation format.

You are the accountant for Klemmer Corporation. At the company's year end, December 31, 2020, you discover there is an amount of $30,000 that has been earned by Klemmer but not yet billed to its customers by the year end. Laura Klemmer, the owner, tells you not to bill the customers as it is company policy not to bill customers until February 2020, well after the Christmas holidays. Klemmer has sales staff that are paid a bonus at year end on sales revenue billed. -What accounting principle has been violated by not billing customers for the year ended December 31, 2016? Explain.

At January 1, 2020, the records of Anna Turcza's law practice showed equity at $37,200. Profit for 2020 was $18,200, and Anna withdrew $3,000 in cash during the year. Prepare the statement of changes in equity for 2020.

Which of the following statements is true about assets?

Something of value, such as products, services and money, is called a(n)

The business entity principle

Explain the difference between the functions of an internal auditor and an external auditor.

The natural business year for businesses is always the same as the calendar year.

At the request of the Board of Directors, internal auditors perform the audit function to protect shareholder interests.

Internal controls include procedures to protect assets and prevent fraud.

Expenses are costs incurred or the using up of assets from generating revenue.

Ethical practices are not necessary to build trust and long-term relationships with customers.

The main objective of accounting is to help people to invest in new products and businesses.

Which of the following business transactions would increase the equity of ABC Limited?

Ownership of a corporation is divided into units called shares.

Ethical behaviour requires

Profit is another name for

Salaries paid with cash appear on which of the following statement(s)?

If a business is not being sold or closed, the amounts reported in the accounts for assets used in operations are based on costs. This practice is justified by the