Exam 1: Accounting in Action

The basic accounting equation is in balance when the creditor and ownership claims against the business equal the assets.

Collection of a $1,000 Accounts Receivable

A basic assumption of accounting that requires activities of an entity be kept separate from the activities of its owner is referred to as the

Druganaut Company buys a $21,000 van on credit. The transaction will affect the

The Duce Company has five plants nationwide that cost a total of $100 million. The current fair value of the plants is $500 million. The plants will be recorded and reported as assets at

On June 1, 2018, Secretly Canadian Company prepared a balance sheet that shows the following: Shortly thereafter, all of the assets were sold for cash. How would the balance sheet appear immediately after the sale of the assets for cash for each of the following cases?

Net income for the period is determined by subtracting total expenses and drawings from total revenues.

Misra Company compiled the following financial information as of December 31, 2018: Revenues \ 340,000 Retained earnings (1/1/18) 60,000 Equipment 80,000 Expenses 250,000 Cash 90,000 Dividends 20,000 Supplies 10,000 Accounts payable 40,000 Accounts receivable 70,000 Common stock 80,000 Misra's stockholders' equity on December 31, 2018 is

Keeping a systematic, chronological diary of events that are measured in dollars and cents is called

Compute the missing amount in each category of the accounting equation.

The accounting process involves all of the following except

Bookkeeping and accounting are one and the same because the bookkeeping function includes the accounting process.

Net income results when

Owners' claims to total business assets take precedence over the claims of creditors because owners invest assets in the business and are liable for losses.

If services are rendered on account, then

Teamboo Company's stockholders' equity at the beginning of August 2018 was $750,000. During the month, the company earned net income of $175,000 and paid dividends of $75,000. At the end of August 2018, what is the amount of stockholders' equity?

At the beginning of the year, Shaolin Company had total assets of $520,000 and total liabilities of $210,000. Answer the following questions viewing each situation as being independent of the others. (1) If total assets increased $200,000 during the year, and total liabilities decreased $75,000, what is the amount of stockholders' equity at the end of the year? (2) During the year, total liabilities increased $230,000 and stockholders' equity decreased $90,000. What is the amount of total assets at the end of the year? (3) If total assets decreased $40,000 and stockholders' equity increased $130,000 during the year, what is the amount of total liabilities at the end of the year?

The monetary unit assumption requires that all dollar amounts be rounded to the nearest dollar.

Fat Possum's Service Shop started the year with total assets of $330,000 and total liabilities of $2400,000. During the year, the business recorded $630,000 in revenues, $420,000 in expenses, and paid dividends of $60,000. The net income reported by Fat Possum's Service Shop for the year was

Prepare an income statement, a retained earnings statement, and a balance sheet for the accupuncture practice of Golda Bear, from the items listed below for the month of September, 2018.