Exam 1: Introduction to Accounting and Business

Equipment with an estimated market value of $30,000 is offered for sale at $45,000. The equipment is acquired for $15,000 in cash and a note payable of $20,000 due in 30 days. The amount used in the buyer's accounting records to record this acquisition is

If total assets decreased by $88,000 during a period of time and owner's equity increased by $71,000 during the same period, then the amount and direction (increase or decrease) of the period's change in total liabilities is

The assets and liabilities of S&P Day Spa at December 31, 2014 and its revenue and expenses for the year are listed below. The capital of the owner is $68,000 at December 31, 2014. The owner invested an additional $10,000 during the year. Accounts Payable \ 4,375 Spa Operating Expense \ 23,760 Accounts Receivable \ 8,490 Office Expense \ 2,470 Cash \ 13,980 Spa Supplies \ 9,230 Fees Earned \9 8,435 Wages Expense \ 26,580 Spa Furniture \& Equipment \ 56,000 Drawing \ 38,170 Computers \ 2,130 Determine the capital of the owner at January 1, 2014 (Hint: Calculate the increase/decrease in owner's equity first.). Prepare a statement of owner's equity for the current year ended December 31, 2014.

Ramierez Company received their first electric bill in the amount of $60 which will be paid next month. How will this transaction affect the accounting equation?

Using the following accounts and their amounts, prepare in good format a Statement of Owner's Equity for Bright Futures Company, month ended August 31, 2011: Telephone Expense \ 1,150 Cash \ 3,000 Accounts Payable \ 1,540 Jason Bright, Drawing \ 800 Fees Earned \ 15,700 Rent Expense \ 1,400 Suppliess \ 140 Accounts Receivable \ 1,500 Computer Equipment \ 20,000 Jason Bright, Capital \ 14,320 Wages Expense \ 4,800 Utilities Expense \ 750 Notes Payable \ 2,400 Office Expense \ 420

The initials GAAP stand for

The asset created by a business when it makes a sale on account is termed

Two factors that typically lead to ethical violations are relevance and timeliness of accounting information.

Shiny Kar Company had the following transactions. For each transaction, show the effect on the accounting equation by putting the amount and direction (plus, minus, or NC for no change) in each box of the table below. Assets Liabilities Ownes\nobreakspaceEquity a. Shiny Kar withckew \ 500 cash for food. b. Shiny Kar Company sold 2 cars for a total of \ 55,000 on account. c. The cost of the cars sold in (b) above was \ 40,000 . d. Shiny Kar received \ 35,000 payment for a car previously sald on account. e. Shiny Kar paid \ 450 for advertising, f. Shiny Kar purchased \ 150 of cleaning supplies on account.

Debts owed by a business are referred to as

Due to various fraudulent business practices and accounting coverups in the early 2000's, Congress enacted the Sarbanes-Oxley Act of 2002. The Act was responsible for establishing a new oversight board for public accountants called the

What are the three sections of the Statement of Cash Flows?

Which one of the following is the authoritative body in the United States having the primary responsibility for developing accounting principles?

Which of the following group of companies are all examples of a merchandising business?

Revenues are reported when

The debt created by a business when it makes a purchase on account is referred to as an

Determine the missing amount for each of the following: Asssets Liabilities Owner's Equity () \ 38,000 \ 45,000 \ 30,000 (b) \ 22,000 \ 53,000 \ 32,000 (c)

Which of the following best describes accounting?

Which of the following are guidelines for behaving ethically? I. Identify the consequences of a decisuon and its effect on others. II. Consider your obligations and responsibilities to those affected by the decision: III. Identify your decision based on personal standards of honesty and fairness

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) owner's 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) owner's equity?