If a company initially records prepaid expenses with debits to expense accounts, what type of account is debited in the adjusting entries for those prepaid expenses?
> Identify whether a debit or credit yields the indicated change for each of the following accounts. a. To increase Land b. To decrease Cash c. To increase Fees Earned (Revenues) d. To increase Office Expense e. To decrease Unearned Revenue f. To decr
> Identify which accounting principle or assumption best describes each of the following practices: a. In December 2014, Chavez Landscaping received a customer’s order and cash prepayment to install sod at a new house that would not be ready for installati
> Indicate whether a debit or credit decreases the normal balance of each of the following accounts. a. Interest Payable b. Service Revenue c. Salaries Expense d. Accounts Receivable e. Owner, Capital f. Prepaid Insurance g. Buildings h. Interest Re
> Identify each of the following terms/phrases as either an accounting: (a) principle, (b) assumption, or (c) constraint. 1. Materiality 2. Time period 3. Benefit exceeds cost 4. Revenue recognition
> Identify the items from the following list that are likely to serve as source documents. a. Sales ticket b. Trial balance c. Balance sheet d. Telephone bill e. Invoice from supplier f. Company revenue account g. Income statement h. Bank statement i
> The following are common categories on a classified balance sheet. A. Current assets B. Long-term investments C. Plant assets D. Intangible assets E. Current liabilities F. Long-term liabilities For each of the following items, select the letter that ide
> Identify which of the following accounts would be included in a post-closing trial balance. a. Accounts Receivable b. Salaries Expense c. Goodwill d. Land e. Income Tax Expense f. Salaries Payable
> In preparing a work sheet, indicate the financial statement Debit column to which a normal balance in the following accounts should be extended. Use IS for the Income Statement Debit column and BS for the Balance Sheet and Statement of Owner’s Equity Deb
> Cal Consulting initially records prepaid and unearned items in income statement accounts. Given this company’s accounting practices, which of the following applies to the preparation of adjusting entries at the end of its first accounting period? a. Unea
> Identify the following users as either external users (E) or internal users (I). a. Customers b. Suppliers c. Brokers d. Business press e. Managers f. District attorney g. Shareholders h. Lenders i. Controllers j. FBI and IRS k. Consumer group l. Sale
> Answer each of the following questions related to international accounting standards. a. Explain how the closing process is different between accounting under IFRS versus U.S. GAAP. b. What basic principle do U.S. GAAP and IFRS rely upon in recording the
> Answer each of the following questions related to international accounting standards. a. Do financial statements prepared under IFRS normally present assets from least liquid to most liquid or vice versa? b. Do financial statements prepared under IFRS no
> Samsung (Samsung.com) is a leading manufacturer of consumer electronic products. The following selected information is available from Samsung’s financial statements along with that from Apple and Google. Required 1. Compute profit mar
> Match each of the numbered descriptions with the term or phrase it best reflects. Indicate your answer by writing the letter for the term or phrase in the blank provided. A. SASB B. Principles C. Social dimension D. Sustainability E. Conceptual framewo
> Answer each of the following questions related to international accounting standards. a. The International Accounting Standards Board (IASB) issues preferred accounting practices that are referred to as what? b. The FASB and IASB are working on a converg
> List the following steps in preparing a work sheet in their proper order by writing a number from 1 through 5 in the blank space provided. ______ a. Total the statement columns, compute net income (loss), and complete work sheet. ______ b. Extend adjuste
> Classify each of the following items as revenues (R), expenses (EX), or withdrawals (W). 1. Cost of sales (expense) 2. Service revenue 3. Wages expense 4. Owner withdrawal
> Classify the following adjusting entries as involving prepaid expenses (PE), unearned revenues (UR), accrued expenses (AE), or accrued revenues (AR). a. To record revenue earned that was previously received as cash in advance. b. To record wages expense
> Choose from the following list of terms/phrases to best complete the statements below. a. Fiscal year b. Timeliness c. Calendar year d. Accounting period e. Annual financial statements f. Interim financial statements g. Natural business year h. Tim
> Identify the normal balance (debit or credit) for each of the following accounts. a. Fees Earned (Revenues) b. Office Supplies c. Owner, Withdrawals d. Wages Expense e. Accounts Receivable f. Prepaid Rent g. Wages Payable h. Building i. Owner, Capi
> Choose from the following list of terms/phrases to best complete the following statements. a. Accounting b. Identifying c. Recording d. Communicating e. Recordkeeping (bookkeeping) f. Technology g. Language of business h. Governmental 1. reduces the t
> In the blank space beside each adjusting entry, enter the letter of the explanation A through F that most closely describes the entry. A. To record this period’s depreciation expense. B. To record accrued salaries expense. C. To record
> Key comparative figures ($ millions) for both Apple and Google follow. Required 1. What is the total amount of assets invested in (a) Apple and (b) Google? 2. What is the return on assets for (a) Apple and (b) Google? Apple’s beginnin
> Enter the number for the item that best completes each of the descriptions below. 1. Chart 2. General ledger a. A ______ of accounts is a list of all accounts a company uses. b. The ______ is a record containing all accounts used by a company.
> Enter the number for the item that best completes each of the descriptions below. 1. Asset 2. Equity 3. Account 4. Liability 5. Three a. Accounts are arranged into ______ general categories. b. Owner, Capital and Owner, Withdrawals are examples of ___
> The following describe several different business organizations. Determine whether the description refers to a sole proprietorship (SP), partnership (P), or corporation (C). a. Micah Douglas and Nathan Logan own Financial Services, a financial services p
> Order the following steps in the accounting process that focus on analyzing and recording transactions. a. Prepare and analyze the trial balance. b. Analyze each transaction from source documents. c. Record relevant transactions in a journal. d. Post jou
> Match each of the numbered descriptions with the term or phrase it best reflects. Indicate your answer by writing the letter for the term or phrase in the blank provided. A. Audit B. GAAP C. Ethics D. Tax accounting E. SEC F. Public accountants H. IAS
> Many accounting professionals work in one of the following three areas: A. Financial accounting B. Managerial accounting C. Tax accounting Identify the area of accounting that is most involved in each of the following responsibilities: 1. Internal auditi
> Match each transaction or event to one of the following activities of an organization: financing activities (F), investing activities (I), or operating activities (O). a. An owner contributes resources to the business. b. The organization borrows money f
> Part A. Identify the following questions as most likely to be asked by an internal (I) or an external (E) user of accounting information. 1. What are reasonable payroll benefits and wages? 2. Should we make a five-year loan to that business? 3. What are
> Indicate the section where each of the following would appear on the statement of cash flows. O. Cash flows from operating activity I. Cash flows from investing activity F. Cash flows from financing activity 1. Cash purchase of equipment 2. Cash withdra
> The following table shows the effects of five transactions (a through e) on the assets, liabilities, and equity of Mulan’s Boutique. Write short descriptions of the probable nature of each transaction. Assets = Liabilities + Equity
> Four types of adjustments are described in the chapter: (1) prepaid expenses, (2) unearned revenues, (3) accrued expenses, and (4) accrued revenues. Required 1. Form learning teams of four (or more) members. Each team member must select one of the f
> These 16 accounts are from the Adjusted Trial Balance columns of a company’s 10-column work sheet. In the blank space beside each account, write the letter of the appropriate financial statement column (A, B, C, or D) to which a normal account balance is
> Accounting is an information and measurement system that identifies, records, and communicates relevant, reliable, and comparable information about an organization’s business activities. Classify the following activities as part of the identifying (I), r
> If an incorrect amount is journalized and posted to the accounts, how should the error be corrected?
> Why does the recordkeeper prepare a trial balance?
> If assets are valuable resources and asset accounts have debit balances, why do expense accounts also have debit balances?
> Should a transaction be recorded first in a journal or the ledger? Why?
> Are debits or credits typically listed first in general journal entries? Are the debits or the credits indented?
> What kinds of transactions can be recorded in a general journal?
> Refer to Google’s most recent balance sheet in Appendix A. Identify the eight accounts listed as current liabilities. Google’s Balance Sheet from Appendix A: Google Inc. CONSOLIDATED BALANCE SHEETS (In millions,
> Refer to Samsung’s most recent balance sheet in Appendix A. Identify and list its nine current assets. Samsung’s Balance Sheet from Appendix A: / Samsung Electronics Co., Ltd. and its subsidiaries CONSOLIDATED
> Jessica Boland works for Sea Biscuit Co. She and Farah Smith, her manager, are preparing adjusting entries for annual financial statements. Boland computes depreciation and records it as Smith agrees with her computation but says the credit entry should
> Refer to the most recent balance sheet for Apple in Appendix A. What five main noncurrent asset categories are used on its classified balance sheet? Apple’s Balance Sheet from Appendix A: Apple Inc. CONSOLIDATED BALANCE SHEETS (I
> How do reversing entries simplify recordkeeping?
> What are the characteristics of plant assets?
> How is unearned revenue classified on the balance sheet?
> Assume Samsung has unearned revenue. What is unearned revenue and where is it reported in financial statements?
> What type of assets requires adjusting entries to record depreciation?
> Refer to Samsung’s balance sheet in Appendix A. If it made an adjustment for unpaid wages at year-end, where would the accrued wages be reported on its balance sheet? Samsung’s Balance Sheet from Appendix A: /
> What is the difference between the cash basis and the accrual basis of accounting?
> What information is reported in an income statement?
> Key figures for the recent two years of both Apple and Google follow. Required 1. Compute profit margins for (a) Apple and (b) Google for the two years of data shown. 2. Which company is more successful on the basis of profit margin? Explain. Apple
> What information is reported in a balance sheet?
> Identify the four financial statements of a business.
> Provide the names of two (a) asset accounts, (b) liability accounts, and (c) equity accounts.
> Does the sender (maker) of a debit memorandum record a debit or a credit in the recipient’s account? What entry (debit or credit) does the recipient record?
> Why would a company’s manager be concerned about the quantity of its purchase returns if its suppliers allow unlimited returns?
> What is the difference between a sales discount and a purchase discount?
> How does a company that uses a perpetual inventory system determine the amount of inventory shrinkage?
> Explain how a business can earn a positive gross profit on its sales and still have a net loss.
> In comparing the accounts of a merchandising company with those of a service company, what additional accounts would the merchandising company likely use, assuming it employs a perpetual inventory system?
> Refer to the balance sheet and income statement for Apple in Appendix A. What does the company title its inventory account? Does the company present a detailed calculation of its cost of goods sold? Apple’s Balance Sheet & Income S
> Refer to Apple’s financial statements in Appendix A to answer the following. 1. Identify and write down the revenue recognition principle as explained in the chapter. 2. Review Apple’s footnotes (in Appendix A and/or from its 10-K on its website) to disc
> What items appear in financial statements of merchandising companies but not in the statements of service companies?
> What classes of assets and liabilities are shown on a typical classified balance sheet?
> What is a company’s operating cycle?
> What tasks are aided by a work sheet?
> What two purposes are accomplished by recording closing entries?
> The statement of cash flows reports on what major activities?
> What information is reported in a balance sheet?
> What is the purpose of the statement of owner’s equity?
> Give two examples of expenses a business might incur.
> What information is reported in an income statement?
> Angel Martin is a young entrepreneur who operates Martin Music Services, offering singing lessons and instruction on musical instruments. Martin wishes to expand but needs a $30,000 loan. The bank requests that Martin prepare a balance sheet and key fina
> Identify the four basic financial statements of a business.
> Define net income and explain its computation.
> What do accountants mean by the term revenue?
> What contra account is used when recording and reporting the effects of depreciation? Why is it used?
> What events or transactions change equity?
> Review the Google balance sheet in Appendix A. Identify an asset with the word receivable in its account title and a liability with the word payable in its account title. Google’s Balance Sheet from Appendix A: Google Inc. CONSOLI
> What is a prepaid expense and where is it reported in the financial statements?
> Which financial statement is sometimes called the statement of financial position?
> A business reports its own office stationery on the balance sheet at its $400 cost, although it cannot be sold for more than $10 as scrap paper. Which accounting principle and/or assumption justifies this treatment?
> What does the concept of objectivity imply for information reported in financial statements? Why?
> Assume that Brittany Merrill Underwood of Akola Project plans on expanding her business to accommodate more product lines. She is considering financing her expansion in one of two ways: (1) contributing more of her own funds to the business or (2) borro
> Why is accounting described as a service activity?
> How do ethics rules affect auditors’ choice of clients?
> What are some accounting-related professions?
> Samsung (Samsung.com) is a leading manufacturer of consumer electronic products. The following selected information is available from Samsung’s financial statements. Required 1. Compute Samsung’s current ratio for bo
> What type of accounting information might be useful to the marketing managers of a business?
> Identify three types of services typically offered by accounting professionals.
> Describe the internal role of accounting for organizations.
> Identify three actual businesses that offer services and three actual businesses that offer products.
> What are at least three questions business owners and managers might be able to answer by looking at accounting information?
> What type of business is most likely to select a fiscal year that corresponds to its natural business year instead of the calendar year?
> Lila Corentine is an aspiring entrepreneur and your friend. She is having difficulty understanding the purposes of financial statements and how they fit together across time. Required Write a one-page memorandum to Corentine explaining the purposes of t
> Why is the accrual basis of accounting generally preferred over the cash basis?
