Exam 2: Analyzing Business Transactions

The income statement shows

When revenue is greater than expenses, the result is a net ___________________.

The statement of owner's equity is prepared before the balance sheet so that the ending capital balance is available.

The transactions listed below took place at the Mitchell Advertising Agency. These transactions affected the following accounts. Indicate the accounts affected and use plus and minus to show the changes caused by each transaction. Cash K. Mitchell, Capital Accounts Receivable Revenue Equipment Expenses Accounts Payable -Sent a check to a creditor

On September 1, Shawn Dahl established Whitewater Rentals, a canoe and kayak rental business. The following transactions occurred in the month of September and affected the following accounts: Cash Accounts Payable Accounts Receivable Shawn Dahl, Capital Office Equipment Revenue Canoe and Kayak Equipment Expenses Transactions 1. Shawn Dahl invested $45,000 in cash to open the business 2. Paid $12,700 in cash for the purchase of kayak and canoe equipment 3. Paid $1,050 in cash for rent expense 4. Purchased additional kayak and canoe equipment for $3,800 on credit 5. Received $3,900 in cash for kayak rentals 6. Rented canoes and kayaks for $1,200 on account 7. Purchased office equipment for $125 in cash 8. Received $800 in cash from credit clients 9. Shawn Dahl withdrew $1,500 in cash for personal expenses -Based on the information shown in transaction #4 above, indicate the accounts affected and use plus and minus to show the changes caused by the transaction.

During October, a firm had the following transactions involving revenue and expenses. Did the firm earn a net income or incur a net loss for the period? What was the amount?

If the owner takes cash out of the business for personal use, the withdrawal should be recorded as an expense of the business.

When the owner invests cash in a business,

The entire process of analyzing, recording, and reporting business transactions is based on the fundamental accounting equation.

Which financial statement is a representation of the accounting equation?

The debts or obligations of a business are known as its ___________________.

Guy McKinley started the McKinley Charter Service at the beginning of August 2013. On August 31, 2013, the accounting records of the business showed the following information. Prepare an income statement and a statement of owner's equity for the month and a balance sheet as of August 31, 2013. Equipment \ 17,000 Rent Expense \ 4,500 Accounts Receivable 2,600 Cash 5,000 Fees Income 28,000 Salaries Expense 9,600 Boats 103,000 Utilities Expense 1,900 Gasoline Expense 6,500 Supplies 2,300 Loans Payable 77,500 Initial Investment 51,000 Owner's Withdrawal 4,100

The ____________________ is the financial report that shows the assets, liabilities, and owner's equity of a business on a specific date.

The total assets for the SloMo Delivery Service are

The Balance Sheet heading includes each of the following except

Total assets of Douglas Fuhr Furniture Co. are $36,000 and the total liabilities are $12,000. What is the amount of the owner's equity?

If during the year total assets increase by $75,000 and total liabilities decrease by $16,000, by how much did owner's equity increase/decrease?

The figure below shows the transactions for Sawyer Architecture Services during June. Greg Sawyer opened this business on June 1 with a capital investment of $72,000 (Transaction 1). Trans Assets = Liab. Owner's Equity Cash Accts Supp Equip Accts G. Sawyer, Rev. Expense Rec Pay Capital 1 +72,000 +72,000 2 -8,200 +8,200 3 5,200 +5,200 4 +3,680 +3,680 5 -3,500 -3,500 6 +670 -670 7 -2,400 -,400 8 -450 +450 Bal 58,120+ 4,530+ 450+ 11,880= 3,680 + 69,600+ 5,200+ -3,500 -Prepare the statement of owner's equity for Sawyer Architecture Services for the month ended June 30, 2013.

For statements prepared on plain paper, dollar signs are placed with the first amount in each column and with each total.

If assets are $8,000 and liabilities are $2,000, owner's equity is $10,000.