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72 terms

ACC test 1

STUDY
PLAY
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
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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