Exam 1: Accounting in Action

Ethics are the standards of conduct by which one's actions are judged as

The purchase of office equipment on credit increases total assets and total liabilities.

The ________________ reports the assets, liabilities, and owner's equity of a business enterprise at a specific date.

A private accountant can perform many activities in a business organization but would not work in

Liabilities of a company are owed to

Drawings ________________ owner's equity but are not expenses.

When an owner withdraws cash or other assets from a business for personal use, these withdrawals are termed

If an individual asset is increased, then

The following information relates to Ty Ringo Co. for the year 2010. Instructions After analyzing the data, prepare an income statement and an owner's equity statement for the year ending December 31, 2010

Bill Phinnes decides to open a cleaning and laundry service near the local college campus that will operate as a sole proprietorship. Analyze the following transactions for the month of June in terms of their effect on the basic accounting equation. Record each transaction by increasing (+) or decreasing (-) the dollar amount of each item affected. Indicate the new balance of each item after a transaction is recorded. It is not necessary to identify the cause of changes in owner's equity. Transactions (1) Bill Phinnes invests $20,000 in cash to start a cleaning and laundry business on June 1. (2) Purchased laundry equipment for $5,000 paying $3,000 in cash and the remainder due in 30 days. (3) Purchased laundry supplies for $1,200 cash. (4) Received a bill from College News for $300 for advertising in the campus newspaper. (5) Cash receipts from customers for cleaning and laundry amounted to $1,500. (6) Paid salaries of $200 to student workers. (7) Billed the Lion Soccer Team $200 for cleaning and laundry services. (8) Paid $300 to College News for advertising that was previously billed in Transaction 4. (9) Bill Phinnes withdrew $900 from the business for living expenses. (10) Incurred utility expenses for month on account, $400.

At the beginning of 2008, Bonds Company had total assets of $550,000 and total liabilities of $330,000. Answer each of the following questions. 1. If total assets increased $60,000 and owner's equity decreased $90,000 during the year, determine the amount of total liabilities at the end of the year. 2. During the year, total liabilities decreased $75,000 and owner's equity increased $50,000. Compute the amount of total assets at the end of the year. 3. If total assets decreased $100,000 and total liabilities increased $55,000 during the year, determine the amount of owner's equity at the end of the year.

At October 1, Smithson Enterprises reported owner's equity of $35,000. During October, no additional investments were made and the company posted a net loss of $3,000. If owner's equity at October 31 totals $32,000, what amount of owner drawings were made during the month?

The origins of accounting are attributed to Luca Pacioli, a famous mathematician.

Preparing tax returns and engaging in tax planning is performed by

Collection of a $500 Accounts Receivable

Use the accounting equation to answer the following questions. 1. Force 10 Sails Co. has total assets of $120,000 and total liabilities of $35,000. What is owner's equity? 2. Marcy Fun Center has total assets of $225,000 and owner's equity of $105,000. What are total liabilities? 3. Franco's Restaurant has total liabilities of $40,000 and owner's equity of $95,000. What are total assets?

Accountants record both internal and external transactions.

The primary purpose of the statement of cash flows is to provide information about the cash receipts and cash payments of a company during a period.

Generally accepted accounting principles are

The ________________ principle states that assets should be recorded at the value exchanged at the time the asset is acquired.