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Investment in Preferred Stock.*

current asset

Treasury Stock.*

shareholder's equity

Common Stock.*

shareholder's equity

Dividends Payable.*

current liability

Accumulated Depreciation—Equipment.*

P,P,E

Construction in Process (Constructed for another party).*

current asset

Construction in Process (Constructed for the use of Cunningham, Inc. aka you).*

P,P,E

Petty Cash.*

current asset

Interest Payable.*

current liability

Deficit.*

retained earnings

Equity Investments (trading).*

current asset

Income Tax Payable.*

current liability

Unearned Subscription Revenue.*

current liability

Work in Process.*

current asset

Vacation Wages Payable.*

current liability

Issuance of capital stock.

financing activity-add

Purchase of land and building.

investing activity-subtract

Redemption of bonds

financing activity

Sale of equipment.

investing activity-add

Depreciation of machinery.

operating activity-add to net income

Amortization of patent.

operating activity-add to net income

Issuance of bonds for plant assets.

reported as significant non-cash activity

Payment of cash dividends.

financing activity-subtract

Exchange of furniture for office equipment.

reported as significant non-cash activity

Purchase of treasury stock.

financing activity

Loss on sale of equipment.

operating activity-add to net income

Increase in accounts receivable during the year.

operating activity-deduct from net income

Decrease in accounts payable during the year.

operating activity-deduct from net income

A special machine, fabricated to order for a customer, was finished and specifically segregated in the back part of the shipping room on December 31, 2012. The customer was billed on that date and the machine excluded from inventory although it was shipped on January 4, 2013.

include in inventory as of December 31, 2012

Merchandise costing $2,800 was received on January 3, 2013, and the related purchase invoice recorded January 5. The invoice showed the shipment was made on December 29, 2012, f.o.b. destination.

do not include in inventory as of December 31, 2012

A packing case containing a product costing $3,400 was standing in the shipping room when the physical inventory was taken. It was not included in the inventory because it was marked "Hold for shipping instructions." Your investigation revealed that the customer's order was dated December 18, 2012, but that the case was shipped and the customer billed on January 10, 2013. The product was a stock item of your client.

include in inventory as of December 31, 2012

Merchandise costing $720 was received on December 28, 2012, and the invoice was not recorded. You located it in the hands of the purchasing agent; it was marked "on consignment."

do not include in inventory as of December 31, 2012

Merchandise received on January 6, 2013, costing $680 was entered in the purchases journal on January 7, 2013. The invoice showed shipment was made f.o.b. supplier's warehouse on December 31, 2012. Because it was not on hand at December 31, it was not included in inventory.

include in inventory as of December 31, 2012

decrease in inventory

operating activity-add to net income

sale of investments

investing activity-add

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