Exam 1: Accounting and the Business Environment

Jones Supply Services paid $350 cash,the amount owed from the previous month,to a materials supplier.Which of the following accounts decrease?

McAlister Repair Service had net income for the year of $125,000.In addition,the balance sheet reports the following balances: Jan. 1, 2018 Dec. 31, 2018 Accounts Receivable \ 5,600 \ 14,200 Accounts Payable 12,000 9,500 Building 125,000 125,000 Cash 37,500 35,000 Office Furniture 25,000 50,000 Office Supplies 3,200 1,500 Notes Payable 60,00 75,000 Total Owner's Equity 124,300 141,200 Calculate the return on assets (ROA)for McAlister Repair Service for the year ending December 31,2018.

________ represent the right to receive cash in the future from customers for goods sold or for services performed.

Which of the following financial statements reports cash receipts and cash payments during a period of time?

A sole proprietorship purchased office supplies on account.As a result of this transaction,expenses and liabilities will increase.

The heading of a balance sheet will show the same information for the date line as the heading for a statement of owner's equity.

Michael Company has just completed operations for the year ended December 31,2018.This is the second year of operations for the sole proprietorship.The following data have been assembled for the business. Accounts Payable \ 12,200 Office Expense \ 6,500 Accounts Receivable 14,500 Rent Expense 9,600 Cash 8,200 Michael, Capital, Jan. 1,2018 17,300 Michael, Withdrawals 13,500 Salaries Expense 36,000 Equipment 15,000 Service Revenue 84,000 Insurance Expense 4,000 Utilities Expense 6,200 Prepare the income statement.Use a proper heading.

The balance sheet of a business summarizes an entity's revenues and expenses.

Under the going concern principle,accountants assume that the business will remain in operations long enough to use existing resources for their intended purpose.

Financial statements are prepared after an entity's transactions are analyzed and recorded.Which of the following reports is one of the required financial statements?

The field of accounting that focuses on providing information for internal decision makers is ________.

To be useful,accounting must be relevant and have faithful representation.

International Financial Reporting Standards (IFRS)is the main U.S.accounting rule book and is currently created and governed by the Financial Accounting Standards Board.

Match the accounting position to the job description. -Certified Public Accountant

As per the economic entity assumption,an organization and its owners should be seen as the same entity.

List the four financial statements and describe the information provided by each. Financial statement Information provided 1. 1. 2. 3. 4.

Indicate the effects on the accounting equation of the following business transactions of Garland Service Company for b)to d)below.The company is a sole proprietorship.Use proper account titles.Transaction a)is answered as a guide. a)Trent Garland contributed cash to the business in exchange for capital. b) Collected cash on accounts receivable (created 20 days earlier). c) Purchased office supplies on account. d) Paid cash for the current month's electric bill.

For each of the following decisions,identify if it applies to a financial accounting (FA)or a managerial accounting (MA)decision maker.Your answer should be either FA or MA.Include only one choice for each accounting decision. Decision Maker (FA or Accounting Decision MA ) Should the business expand to a new location? Is the business profitable? How do actual costs compare to budgeted costs? Should I invest in the business?

Which of the following appears on both the statement of owner's equity and the balance sheet?

An economic entity is an organization that stands apart as a separate economic entity.