Exam 1: Accounting and the Business Environment

All of the following describe a liability except:

Which of the following transactions would increase one asset, decrease another asset, and increase a liability?

Which of the following financial statements lists the entity's assets, liabilities, and owner's equity as of a specific date?

For each of the following events, indicate the amount by which owner's equity increased or decreased. a)Owner invested cash of $25,000 and equipment valued at $10,500 into the business. b)Purchased $600 of supplies on account. c)Borrowed $10,000 from the bank, issuing a note payable. d)Performed a service for $1,500 and immediately collected the cash. e)Paid the employee salaries of $1,200 cash. f)Purchased equipment for $550 cash. g)Received monthly rent bill of $1,300, to be paid in the following month. h)Performed a service on account for $2,300.

Table 1-1 Following is a random list showing the account balances of various assets, liabilities, revenues, and expenses for Spiffy's Garage at December 31, 2019, the end of its first year of operations. Accounts receivable \ 15,000 Accounts payable 3,500 Salary expense 4,500 Repairs expense 800 Truck 8,500 Equipment 6,300 Notes payable 8,200 Cash 6,800 Supplies expense 1,600 Service revenue 12,800 Gasoline expense 800 Salary payable 2,200 The owner, Spiffy Sloan, invested $22,600 at the beginning of the year and withdrew $5,000 during the year for personal use. -Refer to Table 1-1. Total expenses for the year were:

Cash investments by the owner are reported on the:

Which of the following statements is false?

Financial statement users having easier access to information is a reason for the development of Accounting Standards for Private Enterprises (ASPE).

Determine net income for the period if beginning owner's equity is $20,000, cash withdrawals by the owner amount to $7,000, and ending owner's equity is $37,000.

Describe the three forms of business ownership and include how the owners' liability is affected by each form.

Table 1-2 Following is a list showing the account balances of various assets, liabilities, revenues, and expenses for Tim's Landscaping at December 31, 2019, the end of its first year of operations. Accounts receivable \ 30,000 Accounts payable 7,000 Salary expense 9,000 Repairs expense 1,600 Truck 17,000 Equipment 12,600 Notes payable 16,400 Cash 13,600 Supplies expense 3,200 Service revenue 25,600 Gasoline expense 1,600 Salary payable 4,400 The owner, Tim Brown, invested $45,200 during the year and withdrew $10,000 during the year for personal use. -Refer to Table 1-2. The statement of owner's equity would show an ending balance in the Capital account at December 31, 2019, of:

The income statement presents a summary of the:

Earning a revenue on account would:

Owner's equity and total assets were $32,000 and $79,000 respectively at the beginning of the period. Assets increased 50% and liabilities decreased 60% during the period. What is owner's equity at the end of the period?

Which of the following amounts appears on both the income statement and statement of owner's equity?

All of the following are forms of business organizations except:

Following is a list of events for Manning Cleaning for the month of April. Show the effects in dollars of these events on the accounting equation by completing the table below. April 1 Owner invested $10,000 cash and equipment valued at $25,000 into the business. 3 Purchased $5,500 of equipment on account. 5 Purchased $400 of supplies for cash. 10 Bought a truck, paying $4,000 in cash and signing a note for $11,000. 14 Performed services for a customer for $1,850 cash. 15 Paid employee wages of $1,200. 18 Paid $2,000 on the equipment purchased on April 3. 24 Performed services for a customer on account, $2,500. 27 Collected $500 from the customer of April 24. 30 Owner withdrew $900 cash for personal use. Date Cash A/R Supp. Equip. Truck A/P N/P Capital Apr. 1 3 5 10 14 15 18 24 27 30 Totals

For the following independent situations, determine the amount of net income or net loss. a)Revenues for the year were $200,000 and expenses were $103,000. The owner withdrew $40,000 for personal use and made an additional investment of $30,000 during the year. b)Revenues for the year were $249,000 and expenses were $136,000. The owner withdrew $55,000 for personal use and made no additional investments. c)Revenues for the year were $154,000 and expenses were $189,000. The owner made an additional investment of $90,000 and withdrew $67,000 for personal use. d)Revenues for the year were $150,000 and expenses were $101,000. The owner made no withdrawals during the year but invested $20,000 cash during the year into the business.

Table 1-1 Following is a random list showing the account balances of various assets, liabilities, revenues, and expenses for Spiffy's Garage at December 31, 2019, the end of its first year of operations. Accounts receivable \ 15,000 Accounts payable 3,500 Salary expense 4,500 Repairs expense 800 Truck 8,500 Equipment 6,300 Notes payable 8,200 Cash 6,800 Supplies expense 1,600 Service revenue 12,800 Gasoline expense 800 Salary payable 2,200 The owner, Spiffy Sloan, invested $22,600 at the beginning of the year and withdrew $5,000 during the year for personal use. -Refer to Table 1-1. Total liabilities at December 31, 2019, were:

Which of the following types of organizations have the entity legally separate from its owners?