Exam 1: Accounting and the Business Environment

Owner's equity is an:

Which of the following is a feature of limited-liability partnerships?

Selected transactions for Sarah's Kitchen are shown below. State the effect in dollars on the accounting equation of each transaction. a)Sarah Cook invests $20,000 cash into a business known as Sarah's Kitchen. b)Sarah purchases kitchen supplies on account for $500. c)Sarah purchases a new oven for $6,500 cash. d)Sarah receives and pays the kitchen's utilities bill amounting to $425. e)Kitchen revenue for the current period amounts to $2,500. (All revenue transactions involved cash.) Item Assets Liabilities Owner's Equity a) b) c) d) e) Totals

A cash payment of an account payable would:

Assets and liabilities for Stan's Garage at the beginning and end of the current accounting period are as follows: January 1 December 31 Total assets \ 450,000 \ 690,000 Total liabilities \ 325,000 \ 440,000 a) $\text {Determine net income or net loss for the current year. The owner did not invest any additional assets during the year and made no withdrawals.}$ b) $\text {Determine net income or net loss for the current year. The owner invested an additional \$ 100,000 of assets into the business during the year and made no withdrawals.}$

Earning a revenue on account would:

In a corporation, the shareholders have liability for the actions of the corporation that extends beyond their investment.

Table 1-2 Following is a list showing the account balances of various assets, liabilities, revenues, and expenses for Tim's Landscaping at December 31, 2019, the end of its first year of operations. Accounts receivable \ 30,000 Accounts payable 7,000 Salary expense 9,000 Repairs expense 1,600 Truck 17,000 Equipment 12,600 Notes payable 16,400 Cash 13,600 Supplies expense 3,200 Service revenue 25,600 Gasoline expense 1,600 Salary payable 4,400 The owner, Tim Brown, invested $45,200 during the year and withdrew $10,000 during the year for personal use. -Refer to Table 1-2. Total assets at December 31, 2019, were:

Collecting cash on account causes:

List and define three generally accepted accounting concepts/principles discussed in Chapter 1.

When a revenue is recorded, the asset account cash is always increased along with owner's equity.

Investors provide money to a business to assist with operations.

Table 1-1 Following is a random list showing the account balances of various assets, liabilities, revenues, and expenses for Spiffy's Garage at December 31, 2019, the end of its first year of operations. Accounts receivable \ 15,000 Accounts payable 3,500 Salary expense 4,500 Repairs expense 800 Truck 8,500 Equipment 6,300 Notes payable 8,200 Cash 6,800 Supplies expense 1,600 Service revenue 12,800 Gasoline expense 800 Salary payable 2,200 The owner, Spiffy Sloan, invested $22,600 at the beginning of the year and withdrew $5,000 during the year for personal use. -Refer to Table 1-1. The net income or loss for the year was:

The provincial securities commissions oversee operations of:

Publicly accountable enterprises, generally speaking, are publicly traded or for which a strong public interest exists.

If total liabilities are $98,000 and owner's equity is $150,000, total assets would be:

Table 1-2 Following is a list showing the account balances of various assets, liabilities, revenues, and expenses for Tim's Landscaping at December 31, 2019, the end of its first year of operations. Accounts receivable \ 30,000 Accounts payable 7,000 Salary expense 9,000 Repairs expense 1,600 Truck 17,000 Equipment 12,600 Notes payable 16,400 Cash 13,600 Supplies expense 3,200 Service revenue 25,600 Gasoline expense 1,600 Salary payable 4,400 The owner, Tim Brown, invested $45,200 during the year and withdrew $10,000 during the year for personal use. -Refer to Table 1-2. The net income or loss for the year was:

Table 1-1 Following is a random list showing the account balances of various assets, liabilities, revenues, and expenses for Spiffy's Garage at December 31, 2019, the end of its first year of operations. Accounts receivable \ 15,000 Accounts payable 3,500 Salary expense 4,500 Repairs expense 800 Truck 8,500 Equipment 6,300 Notes payable 8,200 Cash 6,800 Supplies expense 1,600 Service revenue 12,800 Gasoline expense 800 Salary payable 2,200 The owner, Spiffy Sloan, invested $22,600 at the beginning of the year and withdrew $5,000 during the year for personal use. -Refer to Table 1-1. The statement of owner's equity would show an ending capital balance of:

Receiving cash for services performed the same day would:

Why is it in the interest of a corporation for management to behave ethically?