Transactions affecting owner's equity include
owner's investments and owner's withdrawals, revenues, and expenses
The financial statements of a proprietorship should include the owner's personal assets and liabilities.
The two most common specialized fields of accounting in practice are
managerial accounting and financial accounting
Manufacturing and merchandising companies are similar because they purchase products from other companies to sell to their customers.
Only large companies such as Wal-Mart, JCP, General Motors, and the Bank of America can be organized as corporations.
How does receiving a bill to be paid next month for services rendered affect the accounting equation?
liabilities increase; owner's equity decreases
A balance sheet is a list of the assets, liabilities, and owner's equity of a business for a period of time.
Rivers Computer Makeover Company purchased various computer supplies on account to be used for repairing their customers' computers. How will this business transaction affect the accounting equation?
Increase Assets (Supplies) and Increase Liabilities (Accounts Payable)
Four financial statements are usually prepared for a business. The statement of cash flows is usually prepared last. The statement of owner's equity (OE), the balance sheet (B), and the income statement (I) are prepared in a certain order to obtain information needed for the next statement. In what order are these three statements prepared?
Which of the following entries records the acquisition of equipment on account?
Equipment, debit; Accounts Payable, credit
A proof of the equality of debits and credits in the ledger at the end of an accounting period is called a balance sheet.
The order of the flow of accounting data is (1) record in the ledger, (2) record in the journal, (3) prepare the financial statements.
When a transposition error is made on the trial balance, the difference between the debit and credit totals on the trial balance will be
divisible by 9
Joe Able invested $6,000 in his company, Able Co. on June23. The journal entry will:
Increase Cash and increase Capital
Adjusting entries are made at the end of an accounting period to adjust accounts on the balance sheet.
The matching concept requires expenses be recorded in the same period that the related revenue is recorded.
The following adjusting journal entry was found on page 4 of the journal. Select the best explanation for the entry. Debit: Wages Expense 2,555 Credit Wages Payable 2,555
Record wages expense incurred and to be paid next month
If the adjustment for depreciation for the year is inadvertently omitted, the assets on the balance sheet at the end of the period will be understated.
All adjusting entries always involve
at least one income statement account and one balance sheet account.
Entries required to close the balances of the temporary accounts at the end of the period are called final entries.
The phase of accounting system installation in which the information needs of people in the organization are taken into account is
Office salaries, depreciation of office equipment, and office supplies are examples of what type of expense?
Sales to customers who use bank credit cards, such as MasterCard and VISA, are generally treated as credit sales.
A retailer purchases merchandise with a catalog list price of $10,000. The retailer receives a 25% trade discount and credit terms of 2/10, n/30. How much cash will be needed to pay this invoice within the discount period?
Apple Co sells merchandise on credit to Zea Co in the amount of $8,000. The invoice is dated on September 15 with terms of 1/15, net 45. If Zea Co. chooses not to take the discount, by when should the payment be made?
When merchandise sold is assumed to be in the order in which the expenditures were made, the inventory method is called
KoKo Company uses the retail method of inventory costing. They started the year with an inventory that had a retail cost of $35,000. During the year they purchased an inventory with a retail cost of $300,000. After performing a physical inventory, they calculated their inventory at $60,000. The mark up is 100% of cost. Determine the ending inventory at its estimated cost.