Exam 1: Introduction to Accounting and Business

The assets and liabilities of Rocky's Day Spa on December 31 and its revenue and expenses for the year are listed below. The capital of the owner was $68,000 on January 1. The owner invested an additional $10,000 during the year.? Accounts payable \ 4,375 Spa operating expense \ 23,760 Accounts receivable 8,490 Office expense 2,470 Cash ??? Spa supplies 9,230 Fees earned 98,435 Wages expense 26,580 Spa furniture and equipment 56,000 Drawing 38,170 Computers 2,130 Prepare a balance sheet for the year ended December 31.?

Which of the following is not a characteristic of a corporation?

Austin Land Company sold land for $85,000 in cash. The land was originally purchased for $65,000. At the time of the sale, $40,000 was still owed to Regions Bank. After the sale, Austin Land Company paid off the loan. Explain the effect of the sale and the payoff of the loan on the accounting equation.

Which of the following is the best description of accounting's role in business?

Match the following characteristics with the form of business entity that best describes it. Each may be used more than once. -Has the ability to obtain large amounts of resources

The assets and liabilities of a company are $128,000 and $84,000, respectively. Owner's equity should equal

Assets that are used up during the process of earning revenue are called expenses.

Which of the following is a guideline for behaving ethically?I.Identify the consequences of a decision and its effect on others.II.Consider your obligations and responsibilities to those affected by the decision.III.Identify your decision based on personal standards of honesty and fairness.

Financial accounting provides information to all users, while the main focus for managerial accounting is to provide information to the management.

Explain the meaning of: (a) the objectivity concept (b) the unit of measure concept

The debt created by a business when it makes a purchase on account is referred to as an

The financial statement that presents a summary of the revenues and expenses of a business for a specific period of time, such as a month or year, is called a (n)

Match each transaction with its effect on the accounting equation. Each letter may be used more than once. -Borrowed money from a bank

Which of the following is most likely to obtain large amounts of resources by issuing stock?

Which of the following would not normally operate as a service business?

Match each transaction with its effect on the accounting equation. Each letter may be used more than once. -Received utility bill to be paid next month

Senior executives cannot be criminally prosecuted for the wrongdoings they commit on behalf of the companies where they work.

Match each transaction with its effect on the accounting equation. Each letter may be used more than once. -Used up supplies that were already on hand

Match each transaction with its effect on the accounting equation. Each letter may be used more than once. -Purchased supplies on credit

Use the accounting equation to answer each of the independent questions below.? (a) At the beginning of the year, Norton Company's assets were $75,000 and its owner's equity was $38,000. Duringthe year, assets increased by $18,000 and liabilities increased by $4,000. What was the owner's equity at theend of the year?? (b) At the beginning of the year, Turpin Industries had liabilities of $44,000 and owner's equity of $66,000. If assetsincreased by $10,000 and liabilities decreased by $5,000, what was the owner's equity at the end of the year?