Exam 1: Accounting in Action

For each of the following, describe a transaction that will have the stated effect on the elements of the accounting equation. (a) Increase one asset and decrease another asset. (b) Increase an asset and increase a liability. (c) Decrease an asset and decrease a liability. (d) Increase an asset and increase stockholders' equity. (e) Increase one asset, decrease one asset, and increase a liability.

If the retained earnings account increases from the beginning of the year to the end of the year, then

A basic assumption of accounting assumes that the dollar is

Listed below in alphabetical order are the balance sheet items of Madjack Company at December 31, 2018. Prepare a balance sheet and include a complete heading.

Two items are omitted from each of the following summaries of balance sheet and income statement data for two proprietorships for the year 2018, Holly Enterprises and Cat Stevens. Instructions Determine the missing amounts.

Determine the missing items.

GAAP, compared to IFRS, tends to be more

Sources of increases to stockholder's equity are

The amount of stockholders' equity in a business is not affected by

International standards are developed by the

Centro-matic Company began the year with stockholders' equity of $30,000. During the year, Centro-matic issued additional shares of stock in exchange for cash of $42,000, recorded expenses of $120,000, and paid dividends of $8,000. If Centro-matic's ending stockholders' equity was $112,000, what was the company's revenue for the year?

The residual claim on total assets of a business is known as ________________ and is equal to total assets minus total liabilities.

Balance sheet amounts as of December 31, 2018 for Matt Pond's Tutoring Service are listed below. Prepare a balance sheet in good form.

Which of the following is not part of the accounting process?

Which of the following events is not a business transaction?

Identifying is the process of keeping a chronological diary of events measured in dollars and cents.

The economic entity assumption requires that the activities

At September 1, the balance sheet accounts for Stanley's Restaurant were as follows: The following transactions occurred during the next two days: The company issued additional shares of stock for $22,000 cash in the business. The accounts payable were paid in full. (No payment was made on the notes payable.) Instructions Prepare a balance sheet at September 1, 2018.

For each of the following, indicate whether the transaction affects revenue (R), expense (E), dividends (D), common stock (CS), or no effect on stockholders' equity (NOE). 1. Made an investment to start the business. 2. Billed customers for services performed. 3. Purchased equipment on account. 4. Paid monthly rent. 5. Paid dividends.

Joanna Newsom owns and operates Joanna's Burgers, a small fast food store, located at the edge of City College campus in Newton, Ohio. After several very profitable years, Joanna's Burgers began to have problems. Most of the problems were related to Joanna's expansion of the eating area in the restaurant without corresponding increases in the food preparation area. Joanna does not have the cash or financial backing to expand further. She has therefore decided to sell her business. Vivian Girls is interested in purchasing the business. However, she is located in another city and is unfamiliar with Newton. She has asked Joanna why she is selling Joanna's Burgers. Joanna replies that her elderly mother requires extra care, and that her brother needs help in his manufacturing business. Both are true, but neither is her primary reason for selling. Joanna reasons that Vivian should not have asked her anyway, since profitable businesses don't come up for sale. Required: 1. Identify the stakeholders in this situation. 2. Did Joanna act ethically in not revealing fully her reasons for selling the business? Why or why not?