Advertisement Upgrade to remove ads

an information system that provides reports t sers about the economic activities and condition of a business

accounting

three parts of a financial statement are

income statement
owners equity
balance sheet

fees earned =

revenue

a business earns ____ by selling items or providing a service

revenue

cost of doing business like food and rent

expenses

What is the accounting equation

assets= liabilites + owners equity

____ is what you own

assets

examples of assets

cash, accounts recievable, car, equipment, computers, inventory, land

debts that a business owes

liabilities

examples of liabilities

accounts payable
note payable
salary payable

what the owners own of the assets

owners equity

owners equity = ___ ____

net worth

a business that provide service rather products
-cleaning services
-car wash

service business

a business that sells products they purchse from other businesses to customers
-walmart
target

merchandising busines

a business that changes raw materials into products that are sold to customers
-BMW

manufacturing business

a business that sells services and merchandise
-verizon

hybrid company

____ rules of accounting

GAAP

___ ___ ____ what i do as a business and hwat i do personally must be kept seperate. If owning 2 business those must be kept seperate

business entity concept

___ ____ : i have to record this business transaction at whatever dollar amoun that business transaction occured. record what you buy and sell them for

cost concept

___ ____ ___: everything is used in the currency that the company is based in

monitary unit assumption

___ ____: business owned by 1 person

sole proprietorship

_____ more than 1 person formin a business
-still have unlimited liability
partnership agreement: still have to divide up profits and loses

partnership

____ owned by stock holders

corporation

___ unlimited liability concept, all you lose is what you invest. acts as a sole proprietorship

LLC

___ value systems, beliefs

ethics

Out of the three financial statements which do you prepare first

Income statement

List the steps for preparing an income statement

heading: name of company
year end date 12/31/12
- fees earned
- Expenses
- Total expenses
- Net income (fees earned - total expenses)

Out of the three financial statements which do you prepare second

statement of owners equity

list the steps for preparing statement of owers equity

beginning capital
ADD: net income
DEDUCT: drawing
Ending capital

Out of the three financial statements which do you prepare last

balance sheet

list the steps for preparing a balance sheet

Assets: LIABILITIES
Cash: ACC PAY:
ACC REC: TABER CAPITAL
SUPPLIES:
TOTAL ASSETS: OWNER EQUITY(ACC PAY + PAY CAPITAL)

cash is a

asset

wages expense is a

owners equity, expense

accoucts payable is

liability

fees earned is

owners equity

supplies is a

asset

land is an

asset

What is the normal balance

wherever the plus side is for that account

in a t account what is the normal balance for assets

debit

in a t account what is the normal balance for liabilities

credit

in a t account what is the normal balance for owners equity or capital

credit

in a t account what is the normal balance for cash

debit

in a t account what is the normal balance for accounts payable

credit

in a t account what is the normal balance for
accounts recievable

debit

in a t account what is the normal balance for supplies

debit

in a t account what is the normal balance for fees earned

credit

in a t account what is the normal balance for expenses

debit

in a t account what is the normal balance for investment

credit

in a t account what is the normal balance for drawing

debit

a ___ ____ uses all the numbers from the balances of the spread sheet or the balances from the t accounts

trial balance

List the steps for making a unadjusted trial balance

Heading: trail balance
Date:
debit/credit
cash
acc rec
supplies
acc pay
capital
drawing
fees earned
expenses

Totals for both debit and credit

The ___ ____ should always match up with t accounts

journal entry

On April 25, Gregg Repair Service extended an offer of $115,000 for land that had been priced for sale at $140,000. On May 3, Gregg Repair Service accepted the seller's counteroffer of $127,000. On June 20, the land was assessed at a value of $88,000 for property tax purposes. On August 4, Gregg Repair Service was offered $150,000 for the land by a national retail chain. At what value should the land be recorded in Gregg Repair Service's records?

$127,000

If total liabilities decreased by $55,000 during a period of time and owner's equity increased by $60,000 during the same period, the amount and direction (increase or decrease) of the period's change in total assets is

$5,000 increase

Revenues are reported when

work is completed on the job

The assets and liabilities of the company are $175,000 and $40,000, respectively. Owner's equity should equal

$135,000

Allen Marks is the sole owner and operator of Great Marks Company. As of the end of its accounting period, December 31, 2011, Great Marks Company has assets of $940,000 and liabilities of $300,000. During 2012, Allen Marks invested an additional $65,000 and withdrew $45,000 from the business. What is the amount of net income during 2012, assuming that as of December 31, 2012, assets were $995,000, and liabilities were $270,000?

$ 65,000

A business paid $7,000 to a creditor in payment of an amount owed. The effect of the transaction on the accounting equation was to

decrease an asset, decrease a liability

Denzel Jones owns and operates Crystal Cleaning Company. Recently, Denzel withdrew $18,000 from Crystal Cleaning, and he contributed $14,000, in his name, to Habitat for Humanity. The contribution of the $14,000 should be recorded on the accounting records of which of the following entities?

Denzel Jones' personal records and Habitat for Humanity

Donner Company is selling a piece of land adjacent to their business. An appraisal reported the market value of the land to be $120,000. The Focus Company initially offered to buy the land for $107,000. The companies settled on a purchase price of $115,000. On the same day, another piece of land on the same block sold for $122,000. Under the cost concept, what is the amount that will be used to record this transaction in the accounting records?

$115,000

Land, originally purchased for $20,000, is sold for $75,000 in cash. What is the effect of the sale on the accounting equation?

assets increase $55,000; owner's equity increases $55,000

Clifford Moore is starting his computer programming business and has deposited in initial investment of $15,000 into the business cash account. Identify how the accounting equation will be affected.

Increase Assets (Cash) and increase Owner's Equity (Clifford Moore, Capital)

Prarie Clinic purchased X-ray equipment for $4,000, paid $1,275 down, with the remainder to be paid later. The correct entry would be

Equipment 4,000
accountd payable 2725
cash 1275

Which of the following accounts would be increased with a credit?

Accounts Payable, Unearned revenue, Collins Capital

#3 quiz 2

...

may 24 land 53000
cash 53000

purchased land for business

Increase to Land and decrease to Cash

May 31 Supplies 120
ACC PAY 120
??????????????????

purchased supplies on account

Which of the following groups of accounts have a normal debit balance?

assets, expenses

#7 quiz 2

...

Which of the following entries records the investment of cash by Ron York, owner of a proprietorship?

debit Cash; credit Ron York, Capital

The payment for the monthly rent will require the following entry

Debit Rent Expense and Credit Cash

April 23 cash 14000
Jim Xu, capital 14000
Invest cash in Xu Co.

Increase Cash and increase Capital

Please allow access to your computer’s microphone to use Voice Recording.

Having trouble? Click here for help.

We can’t access your microphone!

Click the icon above to update your browser permissions above and try again

Example:

Reload the page to try again!

Reload

Press Cmd-0 to reset your zoom

Press Ctrl-0 to reset your zoom

It looks like your browser might be zoomed in or out. Your browser needs to be zoomed to a normal size to record audio.

Please upgrade Flash or install Chrome
to use Voice Recording.

For more help, see our troubleshooting page.

Your microphone is muted

For help fixing this issue, see this FAQ.

Star this term

You can study starred terms together

NEW! Voice Recording

Create Set