Exam 1: Introducing Financial Accounting

Sara Bloom has prepared the following analysis of September transactions for her business, Blooming Florist. Unfortunately, she has lost some information. Determine the missing amounts (a) through (c) below:

Annie's Attic has the following account balances for the dates given: September 1 September 30 Cash \ 40,000 60,000 Accounts Receivable 40,000 38,000 Accounts Payable 6,000 ? Its net income for September 1 through September 30 was $20,000 and there were no investments by the owners or dividends paid. Determine the equity at both September 1 and September 30.

The International Accounting Standards Board (IASB)

The private board that currently has the authority to establish U.S. generally accepted accounting principles is the:

Internal users of accounting information include lenders, shareholders, brokers, and managers.

Identify the three basic forms of business organizations.

You are reviewing the accounting records of Cathy's Antiques, Inc. owned by Cathy Miller. You have uncovered the following situations. Compose a memo to Ms. Miller that cites the appropriate accounting principle and the suggested action for each separate situation. A. In August, a check for $500 was written to Wee Day Care Center. This amount represents child care for her son Brandon. B. Cathy plans a Going Out of Business Sale for May, since she will be closing her business for a month-long vacation in June. She plans to reopen July 1 and will continue operating Cathy's Antiques indefinitely. C. Cathy received a shipment of pine furniture from Quebec, Canada. The invoice was stated in Canadian dollars. D. Joseph Clark paid $1,500 for a dining table. The amount was recorded as revenue. The table will be delivered to Mr. Clark in six weeks.

A balance sheet covers a period of time, such as a month or year.

Unlimited liability is an advantage of all sole proprietorships.

Prepare a November 30 balance sheet in proper form for Green Bay Delivery Service from the following alphabetical list of the accounts at November 30: Accounts receivable \ 10,000 Accounts payable 18,000 Building 28,000 Common stock 30,000 Cash 8,000 Notes payable 45,000 Office equipment 12,000 Retained earnings ? Trucks 55,000

Decreases in retained earnings that represent costs of assets or services that are used to earn revenues are called:

Expenses decrease retained earnings and are the costs incurred to earn revenues.

Classify the following activities according to the appropriate section of the statement of cash flows: Blooms

On December 15, 2013, Myers Legal Services signed a $50,000 contract with a client to provide legal services to the client in 2014. Which accounting principle would require Myers Legal Services to record the legal fees revenue in 2014 and not 2013?

A company acquires equipment for $75,000 cash. This represents a(n):

Operating activities:

If the liabilities of a company increased $92,000 during a period of time and equity in the business decreased $30,000 during the same period, did the assets of the company increase or decrease and by what amount?

Internal users of accounting information include: