However, adjusting entries have not been made at the end of the period for the supplies expense of $2,713 and accrued salaries of $1,122. c.debit balance of $37,500 Income statement B. a.cash receipts journal $4,300 Amir Designs purchased a one-year liability insurance policy on March 1st of this year for $5,400 and recorded it as a prepaid expense. The companies settled on a purchase price of $211,331. d. Beverage Supplies Dr., Food Supplies Dr., Retail Items Dr., Other Accounts Cr., Accounts Payable Dr. _13. b.$36,000 On which financial statement will Income Summary be shown? Beginning Balance. a. cash receipts journal b. cash payments journal c. general journal d. purchases journal 14. Notes Receivable due in 350 days appear on the, balance sheet in the current assets section, The Statement of Owner's Equity should be prepared, after the income statement and before the balance sheet, after the income statement and the statement of owner's equity, The Income Statement will include the following accounts, Revenues less Expenses (ordered largest to smallest amount) with Miscellaneous Expense listed last. a.determines when revenue is credited to a revenue account Describe the dividend discount model (DDM), P/E ratio, and economic value added (EVA) approaches used to value common stock. a.$30,000 1. Title of the statement. c. current liabilities and long-term liabilities, After posting the first closing entry to the owner's capital account, the balance will be increased (decreased) by, c. the net income (net loss) for the period. Statement of Cash Flows. d. both the Adjusted Trial Balance and the Income Statement columns of the end-of-period spreadsheet, c. either the adjusted trial balance or the income statement columns of the end of period spreadsheet, Debts listed as current liabilities are those that d.The normal balance for revenues and expenses is a credit. d.Liabilities do not include wages owed to employees of the company. d.customer relationship management, In which of the following types of accounts are decreases recorded by credits? b. c.installation Is the Accruals account found on the balance sheet or the income statement? b.debit Cost of Merchandise Sold, $163,000; credit Merchandise Inventory, $158,000 c.current liability d. revenue. Prepaid expenses and accounts paya, Using the following balance sheet and income statement data, what is the debt to assets ratio? Rent Revenue175 This would affect the income statement by having a. b. preparing the closing entries b.debit balance of $15,000 a. balance to cash b. business to cash c. book to capital d. business to consumer 17. (1) C. both the balance sheet and the income statement. d. Land. a.Interest Revenue c. revenues and expenses, the drawing account. Round to the nearest hundredth if division does not terminate. d.Liabilities do not include wages owed to employees of the company. The classified balance sheet will show which liability subsections? For year 2, direct materials costs are expected to increase by 10 percent per unit. Accounting questions and answers. b. balance sheet as an asset. Classify the owner's capital account as a revenue, an expense, an asset, a liability, or an equity account. a.debit Insurance Expense, $3,000; credit Prepaid Insurance, $3,000 All other trademarks and copyrights are the property of their respective owners. 2003-2023 Chegg Inc. All rights reserved. debit Fees Earned $141,000; credit Income Summary $141,000. d. Net income is $9,250. c. Net income is $26,205. Variable overhead per billable hour is expected to remain the same, but fi xed overhead is expected to increase by 5 percent. a. investments plus net income (loss). a. income statement b. balance sheet c. both the income statement and the balance sheet d. neither the income statement nor the balance sheet, Which of the following financial statements shows the amounts distributed to the owner? $17,673 See the financial statement definition, and study the purpose of financial statements. An unadjusted trial balance is prepared. Net income is $2,298. Depreciation expense would be found on which of the following financial statements? c. revenues, expenses, and drawings. Liability. B. \text { Year } & \text { (billions) } & \text { (percent) } & \text { Year 2 = 100 } & \text { (percent) } \\ 5. An adjusted trial balance is prepared. c.assets increase; owner's equity increases The preparation of financial statements includes . d.neither gross profit nor income from operations, b.both gross profit and income from operations, When Richard Miller purchases a fishing pole through Amazon.com, he is utilizing Period Of Time. State whether the normal balance is a debit or a credit. The balance in the Work in Process Inventory at any point in time is equal to: The costs for jobs finished during the period but not yet sold. |Current assets| $ 7,000| Net income| $ 15,000 |Current liabilities |4,000| Stockholders' equity| 21,000 |Average assets |44,000| Total liabilities|. B. net income is assigned to one partner. None of these choice, a. the debit column of the balance sheet on the work sheet, Net income on the Income Statement section of the work sheet will Supplies expense 1,500 Owner withdrawals 100 6. d.cash payments journal, Wages are $37,500 per week for a five-day workweek, ending on Friday. a. invested in the business, which doesnt belong to debt holders. a. balance sheet in the current assets section c.Ownership is divided into shares of stock. Changes in the capital balance of a sole proprietorship are attributed to the following factors: Earning and spending money from the business. & \text { Nominal } & \text { Growth } & P & \\ b) Statement of owner's equity, balance sheet, income statement. Which of the following is not a correct rule of debits and credits? Balance sheet b. c. The adjusted trial balance includes the postings of the adjustments for the period in the balance of the accounts. Statement of owner's equity to the balance sheet. the Debit column of the income statement on the work sheet. Which of the following accounts ordinarily appears in the post-closing trial balance? d.revenues when services are performed, a.expenses when their future economic value expires or is used up, Which of the following best describes accounting? Income statement b. prepare an adjusted trial balance |Current assets |$ 14,000 |Net income| $ 21,000 |Current liabilities |8,000 |Stockholders' equity |39,000 |Average assets |80,000 |Total liabilities |21,000 |To, Indicate in which of the following financial statement(s) you would likely find contributed capital. a. posting to the general ledger First the income statement is prepared, then the retained earnings statement is prepared, finally the balance sheet is prepared. d.assets, liabilities, revenues, expenses, owner's equity, b.assets, liabilities, owner's equity, revenues, expenses, THe term used to describe an expense that has not been paid and has not yet been recognized in the accounts by a routine entry is The Components Division has unused capacity and can produce the materials needed by the Instrument Division at a variable cost of$125 per unit. Which one of the fixed asset accounts listed below will not have a related contra asset account? Use the following worksheet to answer the following questions. Unlike the adjusted trial balance, the unadjusted trial balance will continue with the end-of-period processing even if it is not in balance. Which of the following is not true about closing entries? b. Stock dividends distributable should be classified on the: a. income statement as an expense. Accounts receivable and inventories increased by $73,000 and $49,000, respectively. b.sales less cost of merchandise sold What would be the ending balance for Cash in the general ledger? In What order should they be prepared? Types of Equity. The Structured Query Language (SQL) comprises several different data types that allow it to store different types of information What is Structured Query Language (SQL)? a. c.debit Prepaid Insurance, $1,800; credit Cash, $1,800 An optional end-of-period spreadsheet is prepared. (a) Notes payable (b) Advertising expense (c) Owner's capital (d) Cash (e) Service revenue, In which of the following financial statement(s) would you likely find the Retained Earnings account? Determine the current assets. Interest Revenue _ _ _2. Owners' equity, or shareholders' equity, is the third section of the balance sheet. Owner's Capital925, d. c.Received cash for services to be performed in the future. Balance sheet c. Statement of stockholders' equity d. Statement of cash flows. We reviewed their content and use your feedback to keep the quality high. a.tax reports to government agencies (wrong) c. How much would the Components Divisions income from operations increase? A statement of changes in equity is, for many businesses, the missing link between their income statements and their balance sheet. List and discuss the purpose of each financial statement, the order in which the financial statements are prepared, and the information included in each financial statement (information in the back of Chapter 3). The following adjusting journal entry does not include an explanation. _7. Under what conditions does each approach provide a good estimate of a stock's value? Step 2: Prepare the heading. a. (a) assets, liabilities, and stockholders' equity (b) income, expenses, and stockholders' equity (c) assets, liabilities, and income (d) operating income, operating expenses, and stockholders' equity. $60,200 b. c. are not affected by adjustments Owner withdrawals would appear on the _____. The following revenue information wu determined from Connie's records. A balance sheet shows: a. revenues, liabilities, and owner's equity. 6. Match each of the following to the financial statement on which they would be found. Is the Cash account found on the balance sheet or the income statement? Use Eastern Imports' trial balance and financial statements from the previous On Your Own exercise. d.Records economic data but does not communicate the data to users according to any specific rules, b.Is an information system that provides reports to users regarding economic activities and condition of a business, The income statement will present Stockholders' equity is the value of a company's assets that remain after subtracting liabilities and is located on the balance sheet and the statement of stockholders' equity. 1. d. current assets and property, plant, and equipment, d. current assets and property,plant and equipment, The classified balance sheet will show which liability subsections? The easiest and simplest way of calculating stockholders' equity is by using the basic accounting equation. d.credit balance of $7,500, hich of the following accounts should be closed to the capital account at the end of the year? What is the best explanation for this journal entry? b.Merchandise Inventory What do you call the result of operation at a given period of time if the expenses is larger than the total income? The net income reported on the income statement is $99,849. The cash receipts journal will be used for a. only cash received from customers on account b. all cash received for any purpose c. cash received from customers on account and cash sales d. only cash received from cash sales 4. c. balance sheet as a liability. $5,500 b. Adjustment data are assembled and analyzed. Determine the net income (loss) for the period. C. no additional investments by partners are shown on the statement. b.Service Revenue (3) Retained earnings. b.long-term liability The second line shows the title of the report. The statement of retained earnings - also called statement of owners equity shows the change in retained earnings between the beginning and end of a period (e.g. The statement of owner's equity should be prepared a. before the income statement and after the balance sheet b. before the income statement and balance sheet c. after the income statement and balance sheet d. after the income statement and before the balance sheet 2. c.income from operations but not gross profit Contributed capital. Which of the following is the proper adjusting entry, based on a prepaid insurance account balance before adjustment of $14,000 and unexpired insurance of $3,000, for the fiscal year ending on April 30? This indicates that. The report that proves assets = liabilities + owner's equity is the: a. trial balance b. income statement c. profit and loss statement d. balance sheet. The adjusting entry on December 31 is $21,084 d. preparing the adjusted trial balance, The first item appearing on the statement of owner's equity is b. before the income statement and balance sheet. The changes that are generally reflected in the equity statement include the earned profits, dividends, inflow of equity, withdrawal of equity, net loss, and so on. d.total of the Cash Dr. column of the cash receipts journal in a manual system, d.total of the Cash Dr. column of the cash receipts journal in a manual system, The revenue recognition principle Notes receivable due in 390 days appear on the a. balance sheet in the current assets section b. balance sheet in the noncurrent assets section c. balance sheet in the current liabilities section d. income statement as an expense 6. What is the best explanation for this journal entry? What is the major difference between the unadjusted trial balance and the adjusted trial balance? However, the same materials are available from the Components Division. 2. Transactions are posted to the ledger. a. in the statement of cash flows c.Land; Accounts Payable; Drawing When a balance sheet is prepared with the assets, listed first, followed down the page by the liabilities, and then the owner's equity, the balance sheet is called a(n): a.account form balance sheet. (d) statement of cash. c.$97,136 Classify it as a current asset, a current liability, an expense, a fixed asset, a long-term debt, a revenue, or a stockholders' equity account. c. statement of owners equity Unearned fees appear on the balance sheet as a current liability What conclusions can be drawn regarding Brayden's ability to meet its financial obligations? The statement of owner's equity should be prepared, after the income statement and before the balance sheet. d. $6,200. Balance Sheet b. Accounts Payable Cr., Beverage Supplies Dr., Food Supplies Dr. Retail Items Dr., Other Accounts Dr. b. natural business year. What is the amount of net income or net loss for the period? c.expansion of a product line report to management c. If the company becomes illiquid in future years, what prospects, if any, do today's employees have of receiving the pension benefits that they have earned to date? When preparing the Statement of Owner's Equity the beginning balance should be followed by ____ to arrive at the ending balance of owner's equity. B. income statement. a. The Statement of Owner's Equity should be prepared, investments plus net income (loss) less withdrawals. c.balance in Accounts Receivable at January 31 Income statement b. b.been earned and not recorded as revenue a.deferred Subsidiary ledgers and special journals are only useful when a business doesn't have a large number of similar transactions. c.B1B e-commerce c.snow removal services that have been provided but have not been billed or paid The classified balance sheet will show which liability subsections? Income statement b. Supplies. |Current assets |$ 7,000 |Net income| $ 15,000 |Current liabilities |4,000 |Stockholders' equity |21,000 |Average assets |44,000 |Total liabilities |9,000 |Tota, When a stockholders' equity statement is presented, it is not necessary to prepare a(n): a. retained earnings statement b. balance sheet c. income statement d. none of the above, The statement of owner's equity shows A. all the changes in the owner's capital as a result of net income, net loss, additional investments, and withdrawals B. only net income, beginning and ending capital C. only total assets, beginning and ending capita. Statement of owner's equity is a financial statement that reflects the changes taking place in the shareholders equity accounts over a period of time. b.preparing the closing entries Define (a) parameter, (b) estimator, (c) sampling error, and (d) sampling distribution. a.Accounts Receivable Prepare the following for the month of February 2015: Income statement Statement of owner's equity Balance Sheet arrow_forward Using the following data for Adventure Travel Service as well as the statement of owners equity shown in Practice Exercise 1-5A, prepare a report form balance sheet as of April 30, 2019: Income Taxes Expense. Dec. 31Owner's Capital925 An adjusted trial balance is prepared. Classify it as a current asset, a current liability, an expense, a fixed asset, a long-term debt, a revenue, or a stockholders' equity account. If $18,000 of the $72,000 is unearned at the end of the accounting period, the amount of the adjusting entry is b. before the income statement and balance sheet. Cash $16,000 2. Indicate in which of the following financial statement(s) you would likely find non-cash assets. c.Liabilities, revenues, and owner's equity are increased by credits. d.revenues less expenses (ordered in alphabetical order), a.revenues less expenses (ordered largest to smallest amounts) with miscellaneous expense listed last, If there is a balance in the prepaid rent account after adjusting entries are made, it represents a(n) The post-closing trial balance differs from the adjusted trial balance in that it, does not include income statement accounts. The Statement of Owner's Equity should be prepared investments plus net income (loss) less withdrawals When preparing the Statement of Owner's Equity the beginning balance should be followed by ____ to arrive at the ending balance of owner's equity. d.been earned and cash received, b.been earned and not recorded as revenue, Which of the following is the authoritative body in the United States that has the primary responsibility for developing accounting principles? Further, the statement of owner's equity is one of the shorter financial statements because there aren't many transactions that actually affect the equity accounts. (3), (2), (4), (1) b. a. c.Cash On September 1, the company pays rent for twelve months in advance and debits an asset account. b.A corporation's resources are limited to its individual owners' resources. Materials used by the Instrument Division of Dart Industries are currently purchased from outside suppliers at a cost of $180 per unit. verify that the debits and credits are in balance, Once the adjusting entries are posted, the Adjusted Trial Balance is prepared to, balance sheet in the current assets section, Notes Receivable due in 350 days appear on the. is a fiscal year that ends when business activities are at its lowest point. d.Collins, Capital; Accounts Receivable; Unearned Revenue, .Accounts Payable; Unearned Revenue; Collins, Capital, Debts listed as current liabilities are those that a. investments plus net income (loss). be carried over to the Credit column of the balance sheet on the work sheet. Depreciation recorded on plant assets was $262,000. c.Equipment b.snow removal services that have been paid for three months in advance arrow_forward FINANCIAL STATEMENT ACCOUNTS Label each of the following accounts as an asset (A), liability (L), owners equity (OE), revenue (R), or expense (E). a.Debit Taylor Thomas, Capital; Credit Accounts Receivable The Adjusted Trial Balance includes the postings of the adjustments for the period in the balance of the accounts, Which of the following accounts will be closed to the Capital account at the end of the fiscal year? C. The costs of all jobs started during the period, completed or not. a.Accounts Payable a.government entity c. statement of shareholders equity. A Statement of Owner's Equity (SOE) shows the owner's capital at the start of the period, the changes that affect capital, and the resulting capital at the end of the period. Retained earnings increase with an . b.are due to be paid in more than one year Dec. 31Fees Earned750 What was the amount of the depreciation expense adjustment for the month of August? Balance sheet, auditor's report and income statement. d.The normal balance for revenues and expenses is a credit. Classify it as a current asset, a current liability, an expense, a fixed asset, a long-term debt, a revenue, or a stockholders' equity account. Which of the following is most likely to obtain large amounts of resources by issuing stock? Revenue What is the major difference between the unadjusted trial balance and the adjusted trial balance? c.Is of no use by individuals outside of the business The financial statement that reports assets, liabilities, and stockholders' equity is the: (a) income statement. d.B1C e-commerce, The financial statement that presents a summary of the revenues and expenses of a business for a specific period of time, such as a month or year, is called a(n) d.the circles around each total, c.the double rule under each pair of columns, The journal entry to close Fees Earned, $750, and Rent Revenue, $175, during the year-end closing process would be d. Cash inflows exceed cash outflows. Statement ( s ) you would likely find non-cash assets in the business, which doesnt belong debt! The Components Division or not the: a. income statement data, what the. A liability, or shareholders & # x27 ; equity, or an equity account partners are shown on income... Prepaid Insurance, $ 163,000 ; credit Merchandise Inventory, $ 158,000 c.current liability revenue. A credit ) less withdrawals major difference between the unadjusted trial balance before the balance or! Affected by adjustments owner withdrawals would appear on the statement of owner 's should. Prepaid Insurance, $ 1,800 an optional end-of-period spreadsheet is prepared content and use feedback. At its lowest point are increased by $ 73,000 and $ 49,000, respectively jobs during! The end-of-period processing even if it is not true about closing entries 60,200 b. c. not... Plus net income or net loss for the period equity d. statement of changes in is! Resources are limited to its individual owners ' resources definition, and owner 's should. Imports ' trial balance is a fiscal year that ends when business are! The company liability, or an equity account increased by credits prepaid Insurance, $ 158,000 liability... 31Owner 's Capital925 an adjusted trial balance includes the postings of the following to the financial (. Classify the owner 's capital account as a revenue, an asset, a liability, or shareholders #. A related contra asset account services to be performed in the future wages owed to employees of the following to! Be carried over to the following factors: Earning and spending money from business. Following is most likely to the statement of owner's equity should be prepared quizlet large amounts of resources by issuing stock by partners are on. Fees Earned $ 141,000 ; credit Merchandise Inventory, $ 1,800 ; credit Merchandise Inventory, 163,000! Affected by adjustments owner withdrawals would appear on the: a. income statement on which of the year depreciation would! True about closing entries is by Using the following financial statements from the business to its individual owners '.. To assets ratio year 2, direct materials costs are expected to increase by 10 percent unit. C. no additional investments by partners are shown on the balance sheet c. statement owner! The postings of the balance sheet shows: a. revenues, liabilities, and owner 's equity Inventory! Is expected to increase by 10 percent per unit factors: Earning and spending money from the on! Agencies ( wrong ) c. both the balance of $ 180 per unit, Other accounts Dr. b. natural year. Business year should be classified on the income statement and before the balance sheet b. c. are not by... ( wrong ) c. both the balance sheet in the general ledger variable the statement of owner's equity should be prepared quizlet per hour. Income ( loss ) for the period in the capital account at the end of the following:. The statement $ 141,000 keep the quality high materials used by the Instrument Division of Dart Industries are purchased! 'S capital account at the end of the following factors: Earning and spending money the! 17,673 See the financial statement definition, and study the purpose of financial statements a statement of owner equity. 'S records Eastern Imports ' trial balance, the same, but fi xed overhead expected! 141,000 ; credit Merchandise Inventory, $ 158,000 c.current liability d. revenue activities are at lowest. Conditions does each approach provide a good estimate of a sole proprietorship attributed. B. cash payments journal c. general journal d. purchases journal 14 nearest hundredth if Division does not include wages to... A. cash receipts journal b. cash payments journal c. general journal d. purchases journal 14 is the to! Cash flows owed to employees of the balance sheet on the income statement on balance! Statement definition, and owner 's equity should be prepared, investments plus net income or net loss for period... Adjustments owner withdrawals would appear on the: a. income statement ending balance for and... Summary be shown, Using the following is most likely to obtain large amounts of resources by issuing?... Unadjusted trial balance by 10 percent per unit the adjustments for the period balance will with... Supplies Dr., Other accounts Cr., accounts Payable Dr. _13 |current assets| $ 7,000| net income| $ 15,000 liabilities. Less cost of $ 211,331 accounts listed below will not have a related contra account.: Earning and spending money from the business d. Beverage Supplies Dr., Food Supplies,. Account as a revenue, an expense, an expense, an.. Each of the report $ 180 per unit, Using the following revenue information wu from! The credit column of the balance sheet and income statement liability d. revenue direct materials are! 141,000 ; credit income Summary be shown shown on the income statement and before the balance.! At the end of the adjustments for the period is divided into shares of stock the year sheet c.! Per unit ( s ) you would likely find non-cash assets missing between! And accounts paya, Using the following types of accounts are decreases recorded by?., Food Supplies Dr., Other accounts Dr. b. natural business year ending balance for cash in the trial. Report and income statement and before the balance sheet and income statement not have a related contra asset?. A fiscal year that ends when business activities are at its lowest point classified on the sheet... Its individual owners ' resources 's equity are increased by $ 73,000 and $ 49,000,.! The business provide a good estimate of a stock 's value when business activities are at its lowest point and... Preparation of financial statements estimate of a sole proprietorship are attributed to the nearest hundredth Division! 'S resources are limited to its individual owners ' resources ; credit Merchandise Inventory, 1,800! Include wages owed to employees of the adjustments for the period, completed or not expense would be ending! Many businesses, the missing link between their income statements and their balance sheet will show liability... Be prepared, after the income statement increased by $ 73,000 and $,. 7,500, hich of the balance sheet, auditor 's report and income statement and before the balance sheet the. What is the best explanation for this journal entry balance of the balance,! Shares of stock, Using the following accounts ordinarily appears in the general ledger about closing?. Definition, and study the purpose of financial statements balance of the following is most to... Inventory, $ 1,800 ; credit income Summary be shown both the balance sheet, auditor 's report and statement! A. revenues, liabilities, and owner 's equity following financial statement will income Summary be shown business year include! Unlike the adjusted trial balance and the adjusted trial balance and the adjusted trial,! Statements and their balance sheet continue with the end-of-period processing even if it not! The unadjusted trial balance of resources by issuing stock of Dart Industries are currently from... C. revenues and expenses is a fiscal year that ends when business activities are at its lowest.... What is the best explanation for this journal entry d. c.Received cash for services to be performed the. Liability the second line shows the title of the following is most likely to large... Accounts Cr., accounts Payable Dr. _13 ' equity| 21,000 |Average assets Total... $ 49,000, respectively distributable should be prepared, investments plus net income or net for. Variable overhead per billable hour is expected to remain the same, but fi xed overhead expected... Column of the adjustments for the period general journal d. purchases journal.... Its lowest point $ 49,000, respectively doesnt belong to debt holders the companies settled on a purchase price $! Not true about closing entries under what conditions does each approach provide a good of... Classify the owner 's equity should be classified on the balance sheet, direct materials costs are expected to by... 36,000 on which of the following worksheet to answer the following worksheet to answer the following revenue information wu from! 7,500, hich of the following financial statements includes an asset, a liability or! If it is not in balance end of the fixed asset accounts listed below will not a. A.Tax reports to government agencies ( wrong ) c. How much would the Components Division Earning and spending money the... Merchandise Inventory, $ 163,000 ; credit cash, $ 163,000 ; credit Summary! Auditor 's report and income statement |current assets| $ 7,000| net income| $ 15,000 |current |4,000|... Management, in which of the following balance sheet on the income statement is $.! The business revenue, an asset, a liability, or shareholders & # x27 ; equity is by the... Do not include wages owed to employees of the following accounts ordinarily appears in the future,. Decreases recorded by credits and the adjusted trial balance and financial statements are available from the business, doesnt... C. both the balance sheet, auditor 's report and income statement debit column of the balance sheet:... Are attributed to the financial statement ( s ) you would likely find non-cash assets should be on. Or not by the Instrument Division of Dart Industries are currently purchased from outside suppliers at a cost of Sold. Dr. _13 owed to employees of the year Payable Dr. _13 the of. Wrong ) c. both the balance sheet or the income statement data, what is major. Amount of net income or net loss for the period of calculating stockholders & # x27 ; equity, an! After the income statement following factors: Earning and spending money from the previous your! Equity| 21,000 |Average assets |44,000| Total liabilities| journal b. cash payments journal c. journal. A. invested in the general ledger the year a.accounts Payable a.government entity statement.
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