Exam 1: Accounting and the Business Environment

Westwood Supply Services received $1,000 cash from a customer; the amount was owed to the business from the previous month.Which of the following accounts will decrease as a result of this transaction?

Newton Company settles a liability by making a payment in cash.How does paying this liability affect the accounting equation of the business?

Indicate the effects on the accounting equation of the following business transactions of Pilgrim Service Company for b)to d)below.The company is a sole proprietorship.Use proper account titles.Transaction a)is answered as a guide. a)Maxwell Jones,the sole proprietor,contributed cash to the business in exchange for capital. b) Received cash from a customer on accounts receivable. c) Maxwell Jones withdrew cash from the business for personal use. d) Paid cash on accounts payable.

Which of the following financial statements reports that total assets are equal to total liabilities plus total owner's equity?

Green Lawns Company earned $500 for landscaping services rendered.The customer promised to pay at a later time.Which of the following accounts increased as a result of this transaction?

Many liabilities have the word receivable in their titles.

The balance sheet helps analyze the business's performance in terms of profitability.

Spring Company has assets and equity that amount to $260,000 and $70,000,respectively.Liabilities total ________.

The income statement provides information about profitability for a particular period for the company.

Define assets.Provide three examples of assets.

Accountants assume that the dollar's purchasing power is stable.

The earnings of a sole proprietorship are ________.

Certified Management Accountants (CMAs)specialize only in financial management knowledge and typically work for a single company.

Nick's Landscaping Services incurred $500 as a repair expense and promised to pay the repair company within 30 days.Which of the following accounts will increase as a result of this transaction?

As per the ________,the entity will remain in operation for the foreseeable future.

A law firm provides legal services for clients who do not pay immediately.There is no effect on the accounting equation until the clients pay for the services.

List three private groups that work with the Financial Accounting Standards Board (FASB).

Which of the following financial statements would be most useful if an analyst wants to know the likelihood of repayment of business debts?

The balance sheet is prepared after the statement of owner's equity.

Brooks Landscaping Company performs lawn mowing services for its customers in May.Payments for May's services are expected to be received in June.How does the transaction for performing services in May affect the accounting equation of Brooks Landscaping?