Exam 1: Accounting and the Business Environment

For each of the following events, indicate the amount by which total assets increased or decreased. a)Purchased $400 of supplies on account. b)Earned $800 of revenue by performing a service for cash. c)Received utilities bill for $500, to be paid in the following period. d)Paid salaries to employees of $5,000. e)Purchased equipment for $1,600 on account. f)Purchased equipment for $5,000 cash. g)Collected $475 from a customer on an account receivable. h)Performed $3,000 of services on account.

The balance sheet lists all the entity's assets, liabilities, and owner's equity as of a specific date.

Which of the following transactions would increase an asset and increase owner's equity?

Liabilities are reported on the:

Collection of an account receivable would:

Assets are reported on the:

If beginning capital was $25,000, ending capital is $37,000, and the owner's withdrawals were $23,000, the amount of net income or net loss for the period was:

Earning a revenue and immediately collecting the related cash would:

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. Not including the investment, the net change in owner's equity for the year ended December 31, 2019, was:

Partnerships and proprietorships:

Which of the following financial statements reports owner's equity as of the end of the accounting period?

A withdrawal of cash for personal use by an owner would:

The reliability characteristic means that accounting information is free from error and bias, i.e., objective.

Audits are conducted by accountants internal to the organization so that the users of the financial information can have confidence in the accuracy of the financial reporting.

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 liabilities at December 31, 2019, were:

Which of the following sets of characteristics best describes those of a corporation?

Following is a list of events for Sterling Moving for the month of January. Show the effects in dollars of these events on the accounting equation by completing the table below. Jan. 1 Owner invested $30,000 cash into the business. 3 Purchased $1,500 of equipment with cash. 5 Purchased $400 of supplies on account. 12 Bought a car, paying $2,000 in cash and signing a note for $10,000. 14 Performed services for a customer for $1,000 on account. 15 Paid employee wages of $600. 18 Paid $2,000 on the note payable for the car purchased on Jan. 12. 24 Performed services for a customer for cash, $2,500. 27 Collected $500 from the customer of Jan. 14. 30 Owner withdrew $400 cash for personal use. Date Cash A/R Supp. Equip Car A/P N/P Capital Jan. 1 3 5 12 14 15 18 24 27 30 Total

Which of the following statements should be prepared before the balance sheet is prepared?

Both IFRS and ASPE:

Which of the following is not addressed by rules of professional conduct?