Question: Match each definition with its related term
Match each definition with its related term by entering the appropriate letter in the space provided. There should be only one definition per term (that is, there are more definitions than terms). 
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Term Definition (1) Expenses (2) Gains (3) Revenue principle (4) Cash basis accounting (5) Unearned revenue (6) Operating cycle (7) Accrual basis accounting (8) Prepaid expenses (9) Revenues – Expenses A. Report the long life of a company in shorter periods. B. Record expenses when incurred in earning revenue. C. The time it takes to purchase goods or services from sup- pliers, sell goods or services to customers, and collect cash from customers. D. Record revenues when earmed and expenses when incurred. E. Increases in assets or decreases in liabilities from peripheral transactions. F. An asset account used to record cash paid before expenses have been incurred. G. Record revenues when earned and measurable (delivery of goods or services has occurred, there is persuasive evidence of an arrangement for customer payment, the price is fixed or determinable, and collection is reasonably assured). Net Income (10) Ending Retained Earnings = Beginning Retained Earnings + Net Income - Dividends Declared H. Decreases in assets or increases in liabilities from peripheral transactions. I. Record revenues when received and expenses when paid. J. The income statement equation. K. Decreases in assets or increases in liabilities from ongoing operations. L. The retained earnings equation. M. A liability account used to record cash received before revenues have been earned.
> Find three blogs related to tax practice. On one PowerPoint slide, list the URLs for each blog and the general topical areas addressed at each. Send your slide to the others in your course.
> Locate the following Code citations, and give a brief topical description of each. a. § 708(a). b. § 1371(a). c. § 2503(a).
> Refer to E4-18 Red River Company prepared the following trial balance at the end of its first year of operations ending December 31, 2011. To simplify the case, the amounts given are in thousands of dollars. Other data not yet recorded at December 31,
> Refer to E4-18. Red River Company prepared the following trial balance at the end of its first year of operations ending December 31, 2011. To simplify the case, the amounts given are in thousands of dollars. Other data not yet recorded at December 31
> Red River Company prepared the following trial balance at the end of its first year of operations ending December 31, 2011. To simplify the case, the amounts given are in thousands of dollars. Other data not yet recorded at December 31, 2011 include:
> Tyson, Inc., a party rental business, completed its first year of operations on December 31, 2011. Because this is the end of the annual accounting period, the company bookkeeper prepared the following tentative income statement: Income Statement, 2011
> On December 31, 2011, the bookkeeper for Grillo Company prepared the following income statement and balance sheet summarized here but neglected to consider three adjusting entries. Data on the three adjusting entries follow: a. Rent revenue of $2,500
> On December 31, 2011, Yates Company prepared an income statement and balance sheet and failed to take into account four adjusting entries. The income statement, prepared on this incorrect basis, reflected pretax income of $60,000. The balance sheet (befo
> Cohen & Boyd, Inc., publishers of movie and song trivia books, made the following errors in adjusting the accounts at year-end (December 31): a. Did not accrue $1,400 owed to the company by another company renting part of the building as a storage f
> Deere & Company is the world’s leading producer of agricultural equipment; a leading supplier of a broad range of industrial equipment for construction, forestry, and public works; a producer and marketer of a broad line of lawn and
> Note 1: On April 1, 2011, Warren Corporation received a $30,000, 10 percent note from a customer in settlement of a $30,000 open account receivable. According to the terms, the principal of the note and interest are payable at the end of 12 months. The a
> Foot Locker, Inc., is a large global retailer of athletic footwear and apparel selling directly to customers and through the Internet. It includes the Foot Locker family of stores, Champs Sports, and Eastbay. The following are several of Foot Locker’s in
> Kate’s Kite Company (a corporation) sells and repairs kites from manufacturers around the world. Its stores are located in rented space in malls and shopping centers. During its first month of operations ended April 30, 2011, Kateâ
> Terbish Company started operations on January 1, 2012. It is now December 31, 2012, the end of the annual accounting period. The part-time bookkeeper needs your help to analyze the following three transactions: a. During 2012, the company purchased offic
> The following accounts are used by Britt’s Knits, Inc. Required: For each of the following nine independent situations, give the journal entry by entering the appropriate code(s) and amount(s). The first transaction is used as an exam
> Refer to E4-7. Cardon’s Boat Yard, Inc., repairs, stores, and cleans boats for customers. It is completing the accounting process for the year just ended, November 30, 2012. The transactions during 2012 have been journalized and posted
> Refer to E4-6 . Dittman’s Variety Store is completing the accounting process for the year just ended, December 31, 2011. The transactions during 2011 have been journalized and posted. The following data with respect to adjusting entrie
> Cardon’s Boat Yard, Inc., repairs, stores, and cleans boats for customers. It is completing the accounting process for the year just ended, November 30, 2012. The transactions during 2012 have been journalized and posted. The following data with respect
> Dittman’s Variety Store is completing the accounting process for the year just ended, December 31, 2011. The transactions during 2011 have been journalized and posted. The following data with respect to adjusting entries are available: a. Wages earned by
> Refer to E4-3 and E4-4. Ramos Company completed its first year of operations on December 31, 2011. All of the 2011 entries have been recorded except for the following: a. At year-end, employees earned wages of $7,000, which will be paid on the next payr
> Aubrae Company is making adjusting entries for the year ended December 31, 2011. In developing information for the adjusting entries, the accountant learned the following: a. A two-year insurance premium of $3,600 was paid on October 1, 2011, for coverag
> Ramos Company completed its first year of operations on December 31, 2011. All of the 2011 entries have been recorded except for the following: a. At year-end, employees earned wages of $7,000, which will be paid on the next payroll date, January 6, 2012
> In its annual report, Hewlett-Packard Company states, “We are a leading global provider of products, technologies, solutions and services to individual consumers, small- and medium-sized businesses, and large enterprises, including cust
> Refer to E3-13 . Lisa Frees and Amelia Ellinger had been operating a catering business for several years. In March 2011, the partners were planning to expand by opening a retail sales shop and decided to form the business as a corporation called Traveli
> The following T-accounts indicate the effects of normal business transactions: Required: 1. Describe the typical investing and financing transactions that affect each T-account. That is, what economic events occur to make each of these accounts increa
> Paige Consultants, Inc., provides marketing research for clients in the retail industry. The company had the following unadjusted balances at September 30, 2012: Required: Prepare in good form an unadjusted trial balance for Paige Consultants, Inc., a
> As a team, select an industry to analyze. Reuters provides lists of industries under Sectors and Industries at www.reuters.com . (Click on an industry and then select Company Rankings for a list of members of that industry.) Each team member should acqui
> Crystal Mullinex owns and operates Crystal’s Day Spa and Salon, Inc. She has decided to sell the business and retire. She has had discussions with a representative from a regional chain of day spas. The discussions are at the complex st
> Waddell Company was organized on January 1, 2011. At the end of the first year of operations, December 31, 2011, the bookkeeper prepared the following trial balances (amounts in thousands of dollars): Required: 1. Based on inspection of the two trial b
> Carey Land Company, a closely held corporation, invests in commercial rental properties. Carey’s annual accounting period ends on December 31. At the end of each year, numerous adjusting entries must be made because many transactions completed during cur
> The pre-closing balances in the T-accounts of Waldman Company at the end of the third year of operations, December 31, 2011, follow. The 2011 adjusting entries are identified by letters. Required: 1. Develop three 2011 trial balances for Waldman Compan
> The following information was provided by the records of Elm Tree Apartments (a corporation) at the end of the annual fiscal period, December 31, 2011: Rent a. Rent revenue collected in cash during 2011 for occupancy in 2011, $492,000. b. Rent revenue e
> You are the regional sales manager for Miga News Company. Miga is making adjusting entries for the year ended March 31, 2013. On September 1, 2012, customers in your region paid $24,000 cash for three-year magazine subscriptions beginning on that date. T
> Stoscheck Moving Corporation has been in operation since January 1, 2012. It is now December 31, 2012, the end of the annual accounting period. The company has not done well financially during the first year, although revenue has been fairly good. The th
> Refer to E3-13 . Lisa Frees and Amelia Ellinger had been operating a catering business for several years. In March 2011, the partners were planning to expand by opening a retail sales shop and decided to form the business as a corporation called Traveli
> Refer to the financial statements of American Eagle Outfitters in Appendix B, Urban Outfitters in Appendix C, and the Industry Ratio Report in Appendix D at the end of this book. Required: 1. What was Advertising Expense for each company for the most re
> Waltman Furniture Repair Service, a company with two stockholders, began operations on June 1, 2011. The following T-accounts indicate the activities for the month of June. Required: Explain events ( a ) through (d) that resulted in the entries in the
> Refer to the financial statements of Urban Outfitters in Appendix C at the end of this book. Required: 1. How much is in the Prepaid Expenses and Other Current Assets account at the end of the most recent year (for the year ended January 31, 2009)? Wher
> Refer to the financial statements of American Eagle Outfitters in Appendix B at the end of this book. Required: 1. How much cash did the company pay for income taxes in its 2008 fiscal year (for the year ended January 31, 2009)? 2. What was the company’
> South Bend Repair Service Co. keeps its records without the help of an accountant. After much effort, an outside accountant prepared the following unadjusted trial balance as of the end of the annual accounting period, December 31, 2011: Data not yet r
> Blaine Air Transport Service, Inc., has been in operation for three years. The following transactions occurred in February: February 1 Paid $275 for rent of hangar space in February. February 2 Purchased fuel costing $490 on account for the next fli
> Vail Resorts, Inc., owns and operates five premier year-round ski resort properties (Vail Mountain, Beaver Creek Resort, Breckenridge Mountain, and Keystone Resort, all located in the Colorado Rocky Mountains, and Heavenly Valley Mountain Resort, located
> Sysco, formed in 1969, is North America’s largest marketer and distributor of food service products, serving approximately 400,000 restaurants, hotels, schools, hospitals, and other institutions. The following summarized transactions are typical of those
> Wolverine World Wide, Inc., manufactures military, work, sport, and casual footwear and leather accessories under a variety of brand names, such as Hush Puppies, Wolverine, and Bates, to a global market. The following transactions occurred during a recen
> The following transactions occurred during a recent year: a. Issued stock to organizers for cash (example). b. Purchased equipment on credit. c. Declared and paid cash dividends. d. Earned revenue, collected cash. e. Incurred expenses, on credit. f
> Revenues are normally recognized when goods or services have been provided and payment or promise of payment has been received. Expense recognition is guided by an attempt to match the costs associated with the generation of those revenues to the same ti
> Taos Company is completing the information processing cycle at the end of its fiscal year, December 31, 2011. Following are the correct balances at December 31, 2011, for the accounts both before and after the adjusting entries for 2011. Required: 1. C
> Revenues are normally recognized when the delivery of goods or services has occurred, there is persuasive evidence of an arrangement for customer payment, the price is fixed or determinable, and collection is reasonably assured. The amount recorded is th
> Payson Sports, Inc., sells sports equipment to customers. Its fiscal year ends on December 31. The following transactions occurred in 2012: a. Purchased $314,000 of new sports equipment inventory; paid $90,000 in cash and owed the rest on account. b. Pai
> As a team, select an industry to analyze. Reuters provides lists of industries under Sectors and Industries at www.reuters.com . (Click on an industry and then select Company Rankings for a list of members of that industry.) Each team member should acqui
> Your best friend from home writes you a letter about an investment opportunity that has come her way. A company is raising money by issuing shares of stock and wants her to invest $20,000 (her recent inheritance from her great-aunt’s es
> Pete’s Painting Service was organized as a corporation on January 20, 2011, by three individuals, each receiving 5,000 shares of stock from the new company. The following is a schedule of the cumulative account balances immediately afte
> The October 4, 2004, edition of BusinessWeek presented an article titled “Fuzzy Numbers” on issues related to accrual accounting and its weaknesses that have led some corporate executives to manipulate estimates in their favor, sometimes fraudulently. Yo
> Refer to the annual report for American Eagle Outfitters in Appendix B. Required: 1. The annual report or 10-K report for American Eagle Outfitters provides selected financial data for the last five years. Compute the total asset turnover ratio for eac
> Mike Lynch is the manager of an upstate New York regional office for an insurance company. As the regional manager, his compensation package comprises a base salary, commissions, and a bonus when the region sells new policies in excess of its quota. Mike
> Julio Estela started and operated a small boat repair service company during 2012. He is interested in obtaining a $100,000 loan from your bank to build a dry dock to store boats for customers in the winter months. At the end of the year, he prepared the
> Refer to AP4-3. Bill’s Catering Company is at its accounting year-end, December 31, 2011. The following data that must be considered were developed from the company’s records and related documents: a. During 2011, off
> Refer to the financial statements of American Eagle Outfitters in Appendix B, Urban Outfitters in Appendix C, and the Industry Ratio Report in Appendix D at the end of this book. Required: 1. By what title does each company call its income statement? E
> Refer to the financial statements of Urban Outfitters in Appendix C at the end of the book. Required: 1. What is the company’s revenue recognition policy? 2. Assuming that $50 million of cost of sales was due to non inventory purchase expenses (distribu
> Refer to the financial statements of American Eagle Outfitters in Appendix B at the end of the book. Required: 1. State the amount of the largest expense on the income statement for the year ended January 31, 2009, and describe the transaction represen
> The following are the summary account balances from a recent balance sheet of Exxon Mobil Corporation. The accounts have normal debit or credit balances, but they are not necessarily listed in good order. The amounts are shown in millions of dollars. Ass
> Refer to AP3-4. Alpine Stables, Inc., was established in Denver, Colorado, on April 1, 2011. The company provides stables, care for animals, and grounds for riding and showing horses. You have been hired as the new assistant controller. The following tr
> In July 2004, the U.S. government filed civil and criminal charges against four former executives of Netherlands-based Ahold’s subsidiary U.S. Foodservice, Inc., an operator of supermarkets such as Bi-Lo and Giant Food Stores. Two of the four executives
> Alpine Stables, Inc., was established in Denver, Colorado, on April 1, 2011. The company provides stables, care for animals, and grounds for riding and showing horses. You have been hired as the new assistant controller. The following transactions for Ap
> Big Dog Holdings, Inc., is the parent company of Big Dog USA, a company that develops, markets, and retails a collection of consumer products centered around the signature BIG DOGS name, logo, and “Big Dog” characters.
> Jimmy Langenberger is the president of TemPro, Inc., a company that provides temporary employees for not-for-profit companies. TemPro has been operating for five years; its revenues are increasing with each passing year. You have been hired to help Jimmy
> The following is a series of accounts for Kruger & Laurenzo, Incorporated, which has been operating for two years. The accounts are listed and numbered for identification. Following the accounts is a series of transactions. For each transaction, indi
> Refer to AP4-2 . Hannah Company’s annual accounting year ends on June 30. It is June 30, 2012, and all of the entries for the current year have been made except the following adjusting entries: a. On March 30, 2012, Hannah paid a six-m
> What is a journal entry?
> Briefly explain what is meant by transaction analysis. What are the two steps in transaction analysis?
> Explain what debit and credit mean.
> Define a business transaction in the broad sense, and give an example of two different kinds of transactions.
> Explain what the following accounting terms mean: a. Separate-entity assumption b. Unit-of-measure assumption c. Continuity assumption d. Historical cost principle
> Define the following: a. Asset b. Current asset c. Liability d. Current liability e. Contributed capital f. Retained earnings
> Refer to the financial statements of American Eagle Outfitters in Appendix B, Urban Outfitters in Appendix C, and the Industry Ratio Report in Appendix D at the end of this book. Required: 1. Compute the current ratio for both companies. Compared to the
> What is the primary objective of financial reporting for external users?
> How is the current ratio computed and interpreted?
> What transactions are classified as investing activities in a statement of cash flows? What transactions are classified as financing activities?
> Bill’s Catering Company is at its accounting year-end, December 31, 2011. The following data that must be considered were developed from the company’s records and related documents: a. During 2011, office supplies amounting to $1,200 were purchased for c
> What is a T-account? What is its purpose?
> What two accounting equalities must be maintained in transaction analysis?
> You purchased an XIT auto for $18,000 by making a $3,000 cash payment and six semi annual installment payments for the balance at 12 percent interest. Determine the amount of each payment.
> If you hold a valid contract that will pay you $8,000 cash in 10 years and the going rate of interest is 10 percent, what is its present value? Show your computations.
> Explain the concept of the time value of money.
> Compute 2011 interest expense for the following note: face, $4,000; 12 percent interest; date of note, April 1, 2011.
> Define working capital. How is it computed?
> What is an annuity?
> What is the fundamental accounting model?
> Explain the basic difference between future value and present value.
> Hannah Company’s annual accounting year ends on June 30. It is June 30, 2012, and all of the entries for the current year have been made except the following adjusting entries: a. On March 30, 2012, Hannah paid a six-month premium for property insurance,
> Lisa Frees and Amelia Ellinger had been operating a catering business for several years. In March 2011, the partners were planning to expand by opening a retail sales shop and decided to form the business as a corporation called Traveling Gourmet, Inc. T
> What is a contingent liability? How is a contingent liability reported?
> Define note payable. Differentiate between a secured and an unsecured note.
> Define deferred revenue. Why is it a liability?
> Define accrued liability. What type of entry usually reflects an accrued liability?
> What is the quick ratio? How is it related to the classification of liabilities?
> A liability is a known obligation of either a definite or an estimated amount. Explain.
> Liabilities are measured and reported at their current cash equivalent amount. Explain.
> How can external parties be informed about the liabilities of a business?
> Define liability. Differentiate between a current liability and a long-term liability.
