Exam 1: Accounting in Business

Explain the difference between a business transaction and a business event.

The Accounting Standards Board (AcSB), is the body that developed the International Financial Reporting Standards.

What distinguishes liabilities from equity?

According to the historical cost principle, it is acceptable for managers to use their own estimate of an asset's value when recording the purchase.

Describe the purpose and importance of accounting.

Which of the following statements is correct regarding sales invoices?

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 account(s) is (are) affected by not recording the transaction? Identify the account(s) as an asset, liability, revenue or expense.

Revenues are the value of assets exchanged for products or services provided to customers as part of the major operations of the business.

Which of the following is not reported on the income statement?

Withdrawals represent distributions from a corporation to its owners.

Profit is

At the beginning of this year, Tong Company had $160,000 in liabilities and $200,000 in assets. During this year, assets increased by $160,000 and at year-end they equaled $360,000. Liabilities decreased $20,000 during this year. Calculate the beginning and ending values of equity. Beginning equity = $40,000 Ending equity = $220,000 Assets = Liabilities + Equity

The preferred ethical path is to take a course of action that avoids casting doubt on one's decisions.

Budgeting is the process of developing formal plans for an organization's future activities.

A financial statement providing information that helps users understand a company's financial status at a specific date, is called a(n)

Prepare a balance sheet in good form for the Logitech Trucking Company from the following alphabetical list of the accounts at September 30, 2020: Logitech Trucking Company

Equity is also known a

What is the statement of financial position? What is its purpose?

Bandu Company's accounts with the increases or decreases that occurred during this year are as follows: Except for Profit, an investment of $4,000, and a withdrawal of $12,000, no other items affected the capital account during the year. Using the balance sheet equation, calculate Profit for this year.

The records of Cohen's Toy Repair Co. at December 31, 2020 showed the following account balances: -From the information given in reference, prepare an income statement for 2020.