Exam 1: Introduction to Accounting and Business

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?

Name and describe the four primary financial statements for a proprietorship.

On March 1, 2014, the amount of Norton Cook's capital in Cook's Catering Company was $150,000. During March, he withdrew $31,000 from the business. The amounts of the various assets, liabilities, revenues, and expenses are as follows: Present, in good form, (a) an income statement for March, (b) a statement of owner's equity for March, and (c) a balance sheet as of March 31.

Which of the following best describes accounting?

Which of the following is a manufacturing business?

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

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.

The accounting equation may be expressed as

Countries outside the U.S. use financial accounting standards issued by the:

Financial reports are used by

Using the following accounts and their amounts, prepare in good format an Income Statement for Bright Futures Company, month ended August 31, 2011:

Discuss internal and external users of accounting information. What areas of accounting provide them with information? Give an example of the type of report each type of user might use.

Which of the following is not a business transaction?

Which of the following groups are considered to be internal users of accounting information?

Cash withdrawals by owners decrease assets and increase equity.

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

Identify each of the following as an (1) increase in owner's equity, or a (2) decrease in owner's equity.

The principal financial statements of a proprietorship are the income statement, statement of owner's equity, and the balance sheet.

If a building is appraised for $85,000, offered for sale at $90,000, and the buyer pays $80,000 cash for it, the buyer would record the building at $85,000.

Use the accounting equation to answer each of the independent questions below: a. At the beginning of the year Norton Company assets were $75,000 and its owner's equity was $38,000. During the year, assets increased by $18,000 and liabilities increased by $4,000. What was the owner's equity at the end 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 assets increased by $10,000 and liabilities decreased by $5,000, what was the owner's equity at the end of the year?