Exam 1: Introduction to Accounting and Business

List the five steps in the process by which accounting provide information to users.

How does paying a liability in cash affect the accounting equation?

An account receivable is typically classified as a revenue.

Liabilities are reported on the

Ramos Repair Company is paying a cash dividend.How does this transaction affect Ramos Repair Company's accounting equation?

For each of the following,determine the amount of net income or net loss for the year. a. Revenues for the year totaled $71,300 and expenses totaled $35,500.The shareholders purchased $15,000 of common stock during the year. b. Revenues for the year totaled $220,500 and expenses totaled $175,000.The shareholders were paid $40,000 dividends during the year. c. Revenues for the year totaled $149,000 and expenses totaled $172,000.The shareholders purchased $12,000 of common stock and were paid $16,000 in dividends during the year. d. Revenues for the year totaled $198,150 and expenses totaled $174,200.The shareholders were paid $35,000 dividends during the year.

Simpson Auto Body Repair purchased $20,000 of machinery.The company paid $8,000 in cash at the time of the purchase and signed a promissory note for the remainder to be paid in four monthly installments. a How will the purchase affect the accounting equation? b How will the payment of the first monthly installment affect the accounting equation ignore interest?

At December 31 of the current year,Martin Consultants has assets of $430,000 and liabilities of $205,000.Using the accounting equation and considering each case independently,determine the following: a Stockholders' equity,as of December 31. b Stockholders' equity,as of December 31 of the next year,assuming that assets increased by $12,000 and liabilities increased by $15,000. c Stockholders' equity,as of December 31 of the next year,assuming that assets decreased by $8,000 and liabilities increased by $14,000.

Which of the following is true in regards to a limited liability company?

a. A vacant lot acquired for $83,000 cash is sold for $127,000 in cash.What is the effect of the sale on the total amount of the seller's 1- assets,2- liabilities,and 3- stockholders' equity? b. Assume that the seller owes $52,000 on a loan for the land.After receiving the $127,000 cash in a,the seller pays the $52,000 owed.What is the effect of the payment on the total amount of the seller's 1 assets, 2 liabilities,and 3 stockholders' equity?

Explain the meaning of the business entity concept.

Purchasing supplies on account increases liabilities and decreases equity.

Cash investments made by the owner in the business are reported on the statement of cash flows in the

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

Identify which of the following accounts would appear on a balance sheet.

The assets and liabilities of Thompson Computer Services at March 31, the end of the current year, and its revenue and expenses for the year are listed below. The common stock was $120,000 and the retained earnings were $60,000 at April 1, the beginning of the current year. During the year, shareholders purchased an additional $25,000 in stock. -Prepare a balance sheet for the current year ended March 31.

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

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

Which of the following is not a certification for accountants?

On May 20,White Repair Service extended an offer of $108,000 for land that had been priced for sale at $140,000.On May 30,White Repair Service accepted the seller's counteroffer of $115,000.On June 20,the land was assessed at a value of $95,000 for property tax purposes.On July 4,White Repair Service was offered $150,000 for the land by a national retail chain.At what value should the land be recorded in White Repair Service's records?