Exam 1: Introduction to Accounting and Business

Match the following business types with each business listed below. Each may be used more than once. -A book publisher

The assets and liabilities of Thompson Computer Services at March 31, the end of the current year, and its revenue and expenses for the year are listed below. The capital of the owner was $180,000 at April 1, the beginning of the current year. Mr. Thompson invested an additional $25,000 in the business during the year. ? Accounts payable \ 2,000 Miscellaneous expense \ 1,030 Accounts receivable 10,340 Office expense 1,240 Cash 21,420 Supplies 1,670 Fees earned 73,450 Wages expense 23,550 Land 47,000 Drawing 16,570 Building 157,630 -Prepare an income statement for the current year ended March 31.

Give the major disadvantage of disregarding the cost concept and constantly revaluing assets based on appraisals and opinions.

Match the following characteristics with the form of business entity that best describes it. Each may be used more than once. -Organized as a separate legal taxable entity

The primary financial statements of a proprietorship are the income statement, statement of owner's equity, and balance sheet.

If total assets increased by $190,000 during a specific period and liabilities decreased by $10,000 during the same period, the period's change in total owner's equity was a $200,000 increase.

Match the following characteristics with the form of business entity that best describes it. Each may be used more than once. -Generates 90% of business revenues

On July 1 of the current year, the assets and liabilities of John Wong, DVM, are as follows: Cash, $27,000; Accounts Receivable, $12,300; Supplies, $3,100; Land, $35,000; Accounts Payable, $13,900. What is the amount of owner's equity (John Wong's capital) as of July 1 of the current year?

Ramierez Company received its first electric bill in the amount of $60 which will be paid next month. How will this transaction affect the accounting equation?

Match each transaction with its effect on the accounting equation. Each letter may be used more than once. -Received payment from a customer on account

The assets and liabilities of Rocky's Day Spa on December 31 and its revenue and expenses for the year are listed below. The capital of the owner is $68,000 on January 1. The owner invested an additional $10,000 during the year.? Accounts payable \ 4,375 Spa operating expense \ 23,760 Accounts receivable 8,490 Office expense 2,470 Cash 13,980 Spa supplies 9,230 Fees earned 98,435 Wages expense 26,580 Spa furniture and equipment 56,000 Drawing 38,170 Computers 2,130 Prepare a statement of owner's equity for the current year ended December 31.

List the five steps in the process by which accounting provides information to users.

Determine the missing amount for each of the following:

Karen Meyer owns and operates Crystal Cleaning Company. Recently, Meyer withdrew $10,000 from Crystal Cleaning, and she contributed $6,000, in her name, to the American Red Cross. The contribution of the $6,000 should be recorded on the accounting records of which of the following entities?

If total assets decreased by $88,000 during a period of time and owner's equity increased by $71,000 during the same period, then the amount and direction (increase or decrease) of the period's change in total liabilities would be a (n)

Match each transaction with its effect on the accounting equation. Each letter may be used more than once. -Received cash for services provided

An entity that is organized according to state or federal statutes and in which ownership is divided into shares of stock is a

Match each transaction with its effect on the accounting equation. Each letter may be used more than once. -Investment of land by owner

The main objective for all business is to maximize unrealized profits.

Discuss internal and external users of accounting information. What areas of accounting provide them with information? Give an example of the type of report each type of user might use.