exam 1 Flashcards
Which of the following accounts represents a resource of the company?
accounts receivable
Which of the following accounts represents a liability of the company?
accounts payable and unearned revenue
Which of the following best explains the meaning of total stockholders’ equity?
the amount of common stock plus profits retains over the life of the company
Which of the following is true about a debit?
it represents an increase in assets, a decrease to liabilities, is part of the double-entry procedure that keeps the accounting equation in balance
When preparing a bank reconciliation, a check outstanding would be…
Subtracted from the bank’s cash balance
On March 1, a company paid $24,000 for 12 months of rent in advance. How should the company record this transaction on March 1?
Debit prepaid rent 24,000; credit cash 24000
adjusting entries…
always involve at least one income statement account and one balance sheet account
closing entries…
reduce the balance of temporary accounts to zero and transfer the balance of temporary accounts to retained earnings
At the beginning of the year, ABC company had 5000 insupplies on hand. During the year, supplies purchases amounted to 3500. By the end of the year, the supplies balance was only 900. What is the appropriate adjusting entry for ABC company?
Depit Supplies 7600; credit supplies expense 7600.
the act of collusion refers to
two or more people acting in coordination to circumvent internal controls
on july 31, XYZ company’s cash account showed a balance of 7500 before the bank reconciliation was preparted. After examining the july bank statement and items included with it, the company’s accountant found the following items;
NSF check … 300
Checks outstanding… 2250
service fees… 50
deposits outstanding… 1000
error: XYZ company wrote a check for 250 but recorded it incorrectly for 300. What is the amount of cash that should be reported in the company’s balance sheet as of July 31?
7200
ABC company takes out a loan for 40000 with 10% interest on April 1, 2018. This amount plus interest is due on March 31, 2019. Record the adjusting entry for Dec 3, 2018
Debit interest expense 3000; credit interest payable 3000
Which of the following accounts are current assets?
1. equipment
2. cahs
3. accoutns receivable
4. supplies
1,2,4
which of the following accounts are current liabilities?
1. unearned revenue
2. notes payable (due in 36 months)
3. interest payable
4. accounts payable
1,2,4
suppose a customer rents a vehicle for six months from Rent-a-car on september 1, paying 6000 (1000/month). Record rent-a-car’s adjusting entry on december 31.
debit deferred revenue 4000; credit service revenue 4000
XYZ Company provides services to customers toatling 5000. If the customers are expected to pay in 30 days, how would the transaction be recorded?
debit accounts receivable 5000; credit service revenue 5000
ABC had the following net income (loss) the first three years of operations: 7800 (1500) 2500. If the retained earning balance at the end of year three is 800, what was the total amount of dividends paid over these three years.
8000
use the following appropriate amounts to calculate owners’ claims to the company’s resources: assets 1200000 liabilities 800000 net income 100000 retained earnings 250000
400000
a company receives 3000 for servies to be provided over the next three months. How would the transaction be recorded today?
debit cash 3000; credit deferred revenue 3000
XYZ general ledger shows a balance of, 12500 before the bank reconciliation was prepared. After examining the July bank statement and items included with it, the company’s accountant found the following items: checks outstanding 3150 NSF checks 160 service charges 75 deposits outstanding 29000 XYZ also wrote a check for 115 but recorded it incorrectly for 1150. What is the amount of cash that should be reported in the company’s balance sheet as of July 31?
13300
what account is debited when a company provides a service to a customer
accounts receivable
what accounts are considered assets
debited assets:
cash
accounts receivable
interest receivable
inventory
prepaid insurance
prepaid rent
equipment
supplies
notes receivable
equipment
land
building
credited asset:
accumulated depreciation
liabilities
credited:
accounts payable
salaries payable
interest payable
unearned revenue
notes payable
stockholders’ equity
credited:
common stock
retained earnings
debited:
dividends
expenses accounts:
debited:
salaries expense
rent expense
supplies expense
Advertising expense
Utilities expense
interest expense
depreciation expense
service fee expense
revenue
credited:
Service revenue
sales revenue
interest revenue
accounting equation
assets= liabilities + stockholders’ equity
stockholders’ equity breaks into…
common stock and retained earnings
retained earnings breaks down into
net income - dividends
net income is
revenue - expenses
DEALOR means
Dividends
Expenses
Assets
———————debits^ credits v
Liabilities
Owners’ Equity
Revenue
in adjusting entries what is credited and what is debited
expenses are debited
revenues are credited
adjusting entries will always include…
expenses or revenues
closing entries involve which accounts
revenue, expenses and dividends
closing entries do…
They close temporary accounts into retained earnings by using three journals
add the amount of revenues to retained earnings
subtract expenses and dividends from retained earnings
closing revenues
debit revenue
credit retained earnings
closing expenses
debit retained earnings
credit salaries expense and rent expense
closing dividends
debit retained earnings
credit dividends
bank reconciliations are between
bank statement and company book/ledger
what affects the bank statement side?
checks outstanding (-)
Deposits outstanding (+)
bank errors (-/+)
what affects the company side
service fees (-)
interest earned (+)
cash collections by the bank (+)
NSF bad checks (-)
company errors (-/+)
