Exam 2: Financial Statements and the Accounting System

Aaliyah Turner opened Turner Photography on January 1 of the current year.During January,the following transactions occurred and were recorded in the company's books: 1.Aaliyah invested $13,500 cash in the business in exchange for common stock. 2.Aaliyah contributed $20,000 of photography equipment to the business in exchange for common stock. 3.The company paid $2,100 cash for an insurance policy covering the next 24 months. 4.The company received $5,700 cash for services provided during January. 5.The company purchased $6,200 of office equipment on credit. 6.The company provided $2,750 of services to customers on account. 7.The company paid cash of $1,500 for monthly rent. 8.The company paid $3,100 on the office equipment purchased in transaction #5 above. 9.Paid $275 cash for January utilities. Based on this information,the amount of total stockholders' equity reported on the Balance Sheet at the end of the month would be:

At the beginning of the current year,Trenton Company's total assets were $248,000 and its total liabilities were $175,000.During the year,the company reported total revenues of $93,000,total expenses of $76,000 and dividends of $5,000.There were no other changes in equity during the year and total assets at the end of the year were $260,000.Trenton Company's debt ratio at the end of the current year is:

Jeremy Consulting received $3,000 from a customer for services provided.Jeremy's general journal entry to record this transaction will be:

Jackson Consulting had the following accounts and balances at December 31: Using the information in the table,calculate Jackson Consulting's reported net income for the period.

A business paid $100 cash to Charles Nice (the sole stockholder)for his personal use.Set up the necessary T-accounts below and show how this transaction would be recorded directly in those accounts.

Crediting an expense account decreases it.

A revenue account normally has a debit balance.

When a company provides services for which cash will not be received until some future date,the company should record the amount billed as accounts receivable.

Smiles Entertainment had the following accounts and balances at December 31: Using the information in the table,calculate the company's reported net income for the period.

A company's ledger is:

A debit is used to record which of the following:

Compare the list of accounts below and choose the list that contains only accounts that would be classified as asset accounts on the Chart of Accounts.

The detail of individual revenue and expense accounts is reported on the statement of retained earnings.

A credit entry:

A business's general journal provides a place for recording all of the following except:

In a seller's accounting records,________ are promises of payment waiting to be received from customers.

The same four basic financial statements are prepared by both U.S.GAAP and IFRS.

At a given point in time,a business's trial balance is a list of all of its general ledger accounts and their balances.

Based on the following trial balance for Barry's Automotive Shop,prepare an income statement,statement of retained earnings,and a balance sheet.Barry,the company's sole stockholder,made no additional investments in the company during the year.

A business's record of the increases and decreases in a specific asset,liability,equity,revenue,or expense is known as a(n):