Reading Area Community College

ACCT 105

Accounting Chapter 1

1)Which of the following statements is correct regarding owner investments?

 

2. Given the statements below, choose the most accurate definition of owner investments
3. The four major types of transactions that affect equity in a business are

 

 

4. Identify the expanded accounting equation from the options below.

 

5. Russell’s consulting services company provided 1,000 of services to the local college and immediately collected $700, but the college wants to pay the rest next month. Record this transaction in the accounting equation for Russell’s consulting services by:

 

6. Melton’s door company pays rent on the building facilities of $5000 on May 1. Show how to record this transaction in the accounting equation of Melton’s door company.

 

7. Bob’s bakery receives its utility bill of $800 for the month and pays it immediately. Record this transaction in the accounting equation..

 

8. On May 1, Mary’s morsels company provided catering services at a wedding. The bride is billed

$4000 and will pay during the following month. Record this transaction on May 1 in the accounting equation at Mary’s morsels by:

 

9. When a business provides a service to a customer “on credit”, it means that:

 

10. A customer of Landen consulting company makes a $400 payment of cash on a bill for services provided last month. Record this transaction into the accounting equation of Landen consulting by:

 

 

11. During September, sally’s hair salon purchased $900 of supplies on account. In October Sally’s wants to make a payment of $200 on this bill. Record the October transaction into sally’s accounting equation by:

12. Dividends of $60 cash are paid to the corporation’s stockholders. You would record this transaction in the accounting equation by decreasing the

 

13. Johna’s plant nursery company pays the salaries of its two employees. How will this transaction affect the accounting equation?
14. Which of the following statements below list the rules of entering transactions into the accounting equation?

 

15. Jack pickle decided to start a small business as a corporation. His initial investment was $4,000 cash in exchange for common stock. Demonstrate how to record this transaction in the accounting equation.

 

 

16. Smith company purchased $100 of supplies for her business and paid immediately. She would record this transaction in the accounting equation by which of the following?

 

17. Jackson company purchased office equipment costing $3000 for his business and paid immediately. Record this transaction in the accounting equation by:

 

18. The account payable is a(n)

 

19. On 8/1, supplies costing $500 were purchased on credit, record this transaction in the accounting equation by:

 

20. Jackson’s programming paid its June rent of $500 cash. Demonstrate how to use the accounting equation to record the transaction by completing the following sentence.

 

 

21. ABC Co. performs $200 of services for a customer, but does not get paid right away. Demonstrate how ABC Co. would record this transaction in the accounting equation by completing the following sentence. Note: enter one answer for each blank.

 

 

22. Match each item on the left with its correct definition on the right.

 

23. Given the list of accounts below, identify which of them would appear on a balance sheet.

 

24. Given the accounts below, choose all of the ones that affect equity. (check all answers that apply.)

 

25. Which of the following statements is/are true regarding the effect of revenues on the equity of a business?

 

 

26. The expanded accounting equation is defined as:

 

27. From the following statements, identify the correct definition of equity.
28. From the following statements, identify the correct definition of a liability.

 

29. Which of the following statements best represents the reasons for the account equation?

 

 

30. Dividends cause a(n) (increase/decrease) in equity and are recorded directly in the (retained earnings/dividends/equity) account.

 

31. The correct definition of revenues is: Revenues (increase/decrease) (liabilities/equity) and are earned from the sale of products and services.

 

32. From the following statements, identify the correct definition of an asset.

 

33. Match the statements on the left with whether they apply to private accounting, public accounting or both.

 

 

34. Given the following list of accounts, identify which are classified as liabilities.

 

35. Which of the following statements represent(s) how expenses affect equity?
36. The definition of expenses includes which of the following statements?

 

37. Define the order I which a company prepares financial statements.

 

 

 

38. Given the following list accounts, identify which are classified as assets. Select all that apply.

 

39. Which of the following statements correctly represents the accounting equation?

 

40. True or false: dividends are resources paid to the stockholders.

 

41. Owner investments cause a(n) (increase/decrease) in equity and are entered directly in the common stock/ dividends/revenue) account.

 

42. Net income is calculate using the following formula:

 

(Expenses/revenues/assets) - (Expenses/revenues/assets) = Net income. Use one word for each blank.

 

43. Which of the following statements describes the effect of expenses on equity?

 

44. Match the definition on the left with is correct type of business activity on the right

These activities provide the monies needed to pay for resources such as land and buildings. Financing activities.

These activities are the acquiring and disposing of assets that an organization uses in its business. Investing activities.

These activities are the every day activities that occur in running a business, selling a product or providing a service. Operating activities.

 

 

45. The three that must exist for a person to commit fraud include

 

46. A corporation’s equity has two main parts. Identify these two parts.

 

47. Identify which of the following statement(s) is (are) correct as to why accounting is important.

 

 

48. True or false: by definition, owner investments are cash or other assets that an owner or owners contributes to the company.

 

49. The three sections of the statement of cash flow includes all of the following:

 

50. Each of the financial statements on the left are described on the right. Identify the description that goes with each financial statement.

 

 

51. The correct definition of an income statement includes which of the following?

 

52. The area of accounting that serves the decision-making needs of internal users is referred to as(managerial/Financial/Research) accounting.

 

53. Which statement(s) below define(s) why accounting information is useful?

 

 

54. The accounting assumption related to expressing transactions and events in monetary unit is called the:

 

55. A (proprietorship/partnership/corporation) is a separate entity separate with the same rights as a person.

 

56. Which organization has the legal authority to create generally accepted accounting principles?

 

57. The correct definition of a balance sheet includes which of the following statements?

 

58. A (proprietorship/partnership/corporation) is a business entity owned by one person.

 

59. An internal user of accounting information is:

 

 

60. The accounting assumption that presumes the life of a company can be divided into time periods is called the:

 

61. A (proprietorship/partnership/corporation) is a business owned by two or more people.

 

62. Select internal users of accounting information from the choices below.

 

63. Other names for equity in a corporation include:.

 

64. Complete the following statement regarding risk analysis.

 

65. Higher risk implies higher, but riskier, expected (outcomes/returns/investment)

 

66. Select the statement below which is true regarding risk as it pertains to business and accounting.

 

67. Identify the roles of the international accounting standards boards(IASB) and international financial reporting standards (IFRS).

 

 

68. Users of accounting information can be divided into two main groups. These groups include:

 

69. Identify the items below that reflect the proper heading on a balance sheet.

 

 

70. Given the Jacob’s chocolates company had beginning retained earnings of 4,000; net income during the period of $10,000; and dividends of $300 calculate the ending balance in the retained earnings account..

 

71. True or false: the date line of a balance sheet depicts a specific day and not a period time.

72. Identify some of the reasons why congress passed the Sarbanes-Oxley Act.

 

 

73. Identify the broad opportunity areas of accounting.
74. The statement of retained earnings explains changes in equity from net income (or loss)

 

75. The heading of every financial statement contains several line items. Identify the correct items from the list below.

 

 

76. In every financial statement, there exists single and double underlines. Choose the statement below that describes what these are for and when to use them.

 

77. Identify which of the following lists of accounts would belong on the statement of retained earnings.
78. An income statement reports a company’s net income or net loss during a period. Which of the following accounts would appear on an income statement?

 

79. A creditor:
80. Identify the main section on a statement of cash flows.

 

81. The accounting assumption which presumes that a business will continue operating is called the:

 

82. Select the statement that best defines “return” when used in business and accounting.

 

83. Ethics are defined as:
84. The Dodd-frank act was passed to: select all that apply.
85. What are generally accepted accounting principles?