Exam 1: Accounting and the Business Environment

Jackson Electric Services Company incurred $800 as a repair expense and paid for it in cash.The company is a sole proprietorship.This transaction will ________.

List the steps,in the correct order,that are used when analyzing transactions.

Hollywood Talent Services is a sole proprietorship operated by Phil Morris.The net income of Hollywood Talent Services is $23,000 for the year.The beginning and ending Morris,Capital account was $33,000 and $50,000,respectively.During the year,there were no new capital contributions.Calculate the amount of the owner's withdrawals for the year.

Country Homes Company just recorded a transaction in its books.If this transaction increased the total liabilities by $16,000,then ________.

Lamar Company originally purchased land for $33,000.It later sold the land for $33,000 in cash.Which of the following is TRUE of the effect of the sale of land on the accounting equation?

The income statement is also called the statement of earnings.

In a limited-liability company (LLC),the members are personally liable for the debts of the business.

Which of the following statements,regarding International Financial Reporting Standards (IFRS),is correct?

An entity refers to one business which includes its owners.

Since cost is a reliable measure,the cost principle holds that the accounting records should continue reporting an asset at its historical cost over its useful life.

On the statement of cash flows,investing activities include purchases of land and equipment with the issuance of a note payable.

Gena's Cleaning Services performs services for its customers during March.Payments for the March services are received in June.How does the transaction for the collection of cash from customers affect the accounting equation of Gena's Cleaning Services?

By looking at a statement of owner's equity,the effect of the owner's withdrawals on the ending balance of capital can be determined.

Maxwell Plumbing Services earned $500 by completing a job for Smith Company.The $500 earned by Maxwell Plumbing Services is its ________.

Which of the following users would rely on managerial accounting information for decision-making purposes?

Which financial statement includes a specific date in its heading?

The income statement shows whether or not a business can generate enough cash to pay its liabilities.

An owner's capital balance changes with an owner's withdrawals,revenues,and expenses.

Fred Jones,the sole owner of a business,withdraws cash for his personal use.How does this transaction affect the accounting equation?

If a transaction does not involve cash,such as the purchase of supplies on account,it will not be reported on the statement of cash flows.