Exam 1: Introduction to Accounting and Business

Ting Hsu is the owner of Hsu's Financial Services.At the end of its accounting period,December 31,of Year 1,Hsu's has assets of $575,000 and owner's equity of $335,000.Using the accounting equation and considering each case independently,determine the following amounts:​ (a) Hsu's liabilities as of December 31 of Year 1. (b) Hsu's liabilities as of December 31 of Year 2,assuming that assets increased by $56,000 andowner's equity decreased by $32,000. (c) Net income or net loss during Year 2,assuming that as of December 31,Year 2,assets were $592,000,liabilities were $450,000,and there were no additional investments or withdrawals.

There are four transactions that affect owner's equity.​ (a)What are the two types of transactions that increase owner's equity? (b)What are the two types of transactions that decrease owner's equity?

The following are examples of external users of accounting information except

The Sarbanes-Oxley Act established standards for corporate responsibility and disclosure.

The unit of measure concept

Cash withdrawals by owners decrease assets and increase equity.

Which of the following is not a certification for accountants?

Earning revenue

Generally accepted accounting principles regulate how and what financial information is reported by businesses.

The accountant for Scott Industries prepared the following list of accounting equation element balances from the company's records for the year ended December 31: ​ -Determine the total assets at the end of the current year for Scott Industries.

Use the accounting equation to answer each of the independent questions below.​ (a)At the beginning of the year,Norton Company's assets were $75,000 and its owner's equity was $38,000.Duringthe year,assets increased by $18,000 and liabilities increased by $4,000.What was the owner's equity at theend of the year?​ (b) At the beginning of the year,Turpin Industries had liabilities of $44,000 and owner's equity of $66,000.If assetsincreased by $10,000 and liabilities decreased by $5,000,what was the owner's equity at the end of the year?

Which of the following groups of companies includes examples of merchandising businesses?

Match each transaction with its effect on the accounting equation. Each letter may be used more than once. -Used up supplies that were already on hand

Match each transaction with its effect on the accounting equation. Each letter may be used more than once. -Received utility bill to be paid next month

The assets section of the balance sheet normally presents assets in

The financial statements of a proprietorship should include the owner's personal assets and liabilities.

Match the following items to the financial statement where they can be found. (Hint: Some of the items can be found on more than one financial statement.)A.Balance sheetB.Income statementC.Statement of cash flowsD.Statement of owner's equity

The accountant for Scott Industries prepared the following list of accounting equation element balances from the company's records for the year ended December 31: ​ -Based on the information for Scott Industries,is it profitable? Explain your answer.

The total assets and total liabilities of Paul's Pools,a proprietorship,at the beginning and at the end of the current fiscal year are as follows:

The excess of revenue over the expenses incurred in earning the revenue is called capital.