Questions and Answers of College Accounting A Contemporary Approach 5th Edition

What are posting references? Why are they used?
For each of the following situations, determine the necessary adjustments.1. A firm purchased a three-year insurance policy for $27,000 on July 1, 20X1. The $27,000 was debited to the Prepaid
The adjusted trial balance of Sergio Mendez, Attorney-at-Law, as of November 30, 20X1, after the company had completed the first month of operations, appears below. Appropriate adjustments have been
The account balances for the Pittman International Company on January 31, 20X1, follow. The balances shown are after the first month of operations.INSTRUCTIONS1. Prepare the Trial Balance section of
The completed worksheet for Chavarria Corporation as of December 31, 20X1, after the company had completed the first month of operation, appears below.INSTRUCTIONS1. Prepare an income statement.2.
A worksheet:a. Is a form used to gather all data needed at the end of the account period to prepare the financial statements.b. Is a form to facilitate the efficient preparation of the financial
Shayla Green owns Creative Designs. The trial balance of the firm for January 31, 20X1, the first month of operations, is shown below.INSTRUCTIONS1. Complete the worksheet for the month.2. Prepare an
Christopher Foster owns Estate Planning and Investments Company. The trial balance of the firm for June 30, 20X1, the first month of operations, is shown below.INSTRUCTIONS1. Complete the worksheet
Tobias Cleaning and Maintenance, owned by Triana Tobias, provides cleaning services to hotels, motels, and hospitals. On January 31, 20X1, the firm’s worksheet showed the following adjustment data.
The Trial Balance section of the worksheet for Fashion World for the period ended December 31, 20X1, appears below. Adjustments data are also given.ADJUSTMENTSa. Supplies used, $7,200b. Expired
What is the journal entry to close the drawing account?a. Debit the Capital account and credit the Drawing accountb. Debit the Drawing account and credit the Capital accountc. Debit the Revenue
On December 31, 20X1, the ledger of Hunter Company contained the following account balances:All the accounts have normal balances. Journalize the closing entries. Use 4 as the general journal page
What are the last three steps (7th, 8th, and 9th) in the accounting cycle?a. Post the journal entries, journalize transactions, analyze transactionsb. Prepare financial statements, prepare a
Research Associates, owned by Alex Raman, is retained by large companies to test consumer reaction to new products. On January 31, 20X1, the firm’s worksheet showed the following adjustments
A completed worksheet for Elegant Lawn Nursery and Landscape is shown below.INSTRUCTIONS1. Record the balances as of December 31 in the ledger accounts.2. Journalize (use 3 as the page number) and
Kimberly Ashley, the bookkeeper for Interiors Designs, has just finished posting the closing entries for the year to the ledger. She is concerned about the following balances: Capital account balance
The Income Summary account is a temporary:a. Liability account.b. Expense account.c. Drawing account.d. Owner’s equity account.
Why is a postclosing trial balance prepared?a. To ensure the general journal is in balance after the adjusting and closing entries are journalizedb. To ensure the general ledger is in balance after
A completed worksheet for The Best Group is shown below.INSTRUCTIONS1. Record balances as of December 31, 20X1, in the ledger accounts.2. Journalize (use 3 as the page number) and post the adjusting
On December 31, after adjustments, The Pollock Family Farm’s ledger contains the following account balances.INSTRUCTIONS1. Record the balances in the ledger accounts as of December 31.2. Journalize
In 2018, CSX Corporation, which operates under the name Surface Transportation, reported operating expenses of $7,381 million. A partial list of the company’s operating expenses follows. CSX
The fourth step in the closing process is toa. Interpret the financial information.b. Prepare a worksheet.c. Analyze transactions.d. Journalize the transactions.
On December 31, after adjustments, Ponthieu Company’s ledger contains the following account balances:INSTRUCTIONS1. Record the balances in the ledger accounts as of December 31.2. Journalize the
What accounts appear on the postclosing trial balance?a. Asset, liability, and the owner’s capital accountsb. Asset, liability, and the owner’s drawing accountsc. Asset, liability, and revenue
A partially completed worksheet for Rissa Potter, CPA, for the month ending June 30, 20X1, is shown below.INSTRUCTIONS1. Record the balances as of June 30 in the ledger accounts.2. Prepare the
After the closing entries are posted, which account normally has a balance other than zero?a. Capitalb. Rent Expensec. Income Summaryd. Fees Income
Which of the following accounts will not appear on the postclosing trial balance?a. B. J. Hall, Capitalb. B. J. Hall, Drawingc. Accounts Payabled. Cash
Managers often consult financial statements for specific types of information. Indicate whether each of the following items would appear on the income statement, the statement of owner’s equity, or
A partially completed worksheet for At Home Pet Care Service, a firm that grooms pets at the owner’s home, follows.INSTRUCTIONS1. Record balances as of December 31 in the ledger accounts.2. Prepare
The Income Summary and Violante Autro, Capital accounts for Autro Production Company at the end of its accounting period follow.Complete the following statements:1. Total revenue for the period is
After closing, which accounts have zero balances?a. Liability and capital accountsb. Asset and liability accountsc. Revenue, drawing, and expense accountsd. Liability, drawing, and expense accounts
After the revenue and expense accounts are closed, Income Summary has a credit balance of $80,000. What does this figure represent?a. Net loss of $80,000b. Net profit of $80,000c. Owner’s
The business owner removes supplies that are worth $1,200 from the company stockroom. She intends to take them home for personal use. What effect will this have on the company’s net income?a. Net
The ledger accounts of Aveeno Company appear as follows on March 31, 20X1:All accounts have normal balances. Journalize and post the closing entries. Use 4 as the page number for the general journal
Which financial statement would indicate how much customers owe to the business?a. Income statementb. Balance sheetc. Statement of owner’s equityd. Statement of cash flows
Which financial statement would indicate total revenues, total expenses, and whether the business had a net income or net loss?a. Balance sheetb. Statement of owner’s equityc. Statement of cash
On December 31, the Income Summary account of Ballon Company has a debit balance of $222,000 after revenue of $234,000 and expenses of $456,000 were closed to the account. Kenneth Ballon, Drawing has
Which financial statement would indicate whether there is enough cash to purchase new equipment and how much money is owed to suppliers?a. Income statementb. Balance sheetc. Statement of owner’s
What accounts appear on a postclosing trial balance?
Since graduating from college five years ago, you have worked for a national chain of men’s clothing stores. You have held several positions within the company and are currently manager of a local
The names of three accounting jobs include all but:a. Logistics manager.b. Accountant.c. Bookkeeper.d. Accounts payable clerk.
Generally accepted accounting principles are accounting standards that are changed and refined in response to changes in the environment in which businesses operate.a. Trueb. False
Accounting is called:a. The language of economics.b. The language of finance.c. The language of business.d. The language of commerce.
Generally accepted accounting principles are not needed to ensure that financial information is fairly presented in the operating results and financial positions of firms.a. Trueb. False
Selecting the right employees is a critical step for enhancing the entity’s system of internal control and fraud prevention. Reflected below are several possible ways to check the background of
Financial statements are:a. Accumulated financial data summarized in periodic reports.b. Accumulated transactions of the firm’s sales activities.c. A summary of records and procedures that make up
Generally accepted accounting principles are developed by the Financial Accounting Standards Board (FASB) through proposed statements and solicitation of feedback from interested individuals, groups,
The organization that has the final say on financial accounting issues faced by publicly owned corporations is the:a. Federal Trade Commission.b. Securities and Exchange Commission.c. Internal
A nonprofit organization such as a public school is a(n):a. Social unit.b. Economic unit.c. Economic entity.d. Social entity.
As the owner of a small business, you have decided to apply for a loan to expand your locations. Information that you most likely will need to provide to the lender include all but:a. Current sales
You plan to open a business with two of your friends. You would like to form a corporation, but your friends prefer the partnership form of business. All of the following are advantages of the
What is tax planning?
One requirement for becoming a CPA is to pass the:a. Final CPA Examination.b. SEC Accounting Examination.c. Uniform CPA Exam.d. State Board Examination.
An organization that has two or more owners who are legally responsible for the debts and taxes of the business is a:a. Social entity.b. Partnership.c. Sole proprietorship.d. Corporation.
The CPA designation stands for:a. Certified Public Analyst.b. Certified Public Appraiser.c. Certified Public Accountant.d. Certified Public Associate.
A limited liability company may choose to be taxed as a partnership or corporation.a. Trueb. False
The Certified Bookkeeper exam includes all of the parts below except:a. Business Law.b. Adjustments and Error Corrections.c. Inventory.d. Payroll and Depreciation.
To become a Certified Bookkeeper, one must meet all requirements below except:a. Pass the national certified bookkeeper exam.b. Sign a code of ethics.c. Pass a criminal background check.d. Submit
All of the following are users of accounting information except:a. Owners and managers.b. Banks and suppliers.c. Search engines on a website.d. Tax authorities and regulatory agencies.
The following account balances are for Ping Chung, Certified Public Accountant, as of April 30, 20X1.INSTRUCTIONSUsing the accounting equation form, determine the balance for Ping Chung, Capital,
A business transaction is:a. Any financial event that changes the resources of the firm.b. Any financial event that changes the ownership of the firm.c. Any nonfinancial event that changes the
What affect do withdrawals have on the basic account equation?a. Increase the owner’s equity in the businessb. Decrease the owner’s equity in the businessc. Increase the liabilities of the
Just before Henderson Laboratories opened for business, Eugene Henderson, the owner, had the following assets and liabilities. Determine the totals that would appear in the firm’s fundamental
Carter Wilson is a painting contractor who specializes in painting commercial buildings. At the beginning of June, his firm’s financial records showed the following assets, liabilities, and
Royce Alexander owns Alexander’s Consulting Service. At the beginning of September, his firm’s financial records showed the following assets, liabilities, and owner’s equity.INSTRUCTIONSSet up
Santiago Madrid opened a gym and fitness studio called Perfect Body Fitness and Spa Center at the beginning of November of the current year. It is now the end of December, and Madrid is trying to
A good system of internal control requires business entities to have well-documented (written) policies and procedures on accounts receivables. These policies and procedures should cover segregation
Which transaction below increases an asset and the owner’s equity?a. A purchase of equipment on creditb. A purchase of equipment with cashc. Payment of rent with cashd. A sale of merchandise on
The fundamental accounting equations for several businesses follow. Supply the missing amount Assets 1. $64,700 2. $57,800 3. $96,150 4.$? 5. $108,000 || Liabilities $13,440 $12,760 $ ? $11,400 $
If an owner gives personal tools to the business, how is the transaction recorded?a. This is not a transaction and is not recorded.b. This is a decrease in the owner’s equity in the business.c.
Rayshanti Williamson is opening a tax preparation service on December 1, which will be called Williamson’s Tax Service. Williamson plans to open the business by depositing $50,000 cash into a
Review the following excerpt from the 2018 consolidated statement of income for Southwest Airlines Co. Answer the questions that follow.Analyze:1. Although the format for the heading of an income
Amounts that a business must pay in the future are known as:a. Accounts receivable.b. Revenue.c. Expense.d. Accounts payable.
What information is included in the financial statement headings?a. The owner’s name (who); title of the statement (what); time period covered (when)b. The firm’s name (who); type of business
What information does the balance sheet contain?
The equation below shows the transactions of Kathryn Proctor, Attorney and Counselor at Law, during August. This law firm is owned by Kathryn Proctor.INSTRUCTIONSAnalyze each transaction carefully.
Elizabeth Tolliver purchased a computer for $6,700 on account for her business. What is the effect of this transaction?a. Equipment decrease of $6,700 and Accounts Payable increase of $6,700b.
Home Interiors has assets of $120,000 and liabilities of $45,000. What is the owner’s equity?a. $25,000b. $15,000c. $75,000d. $55,000
What information does the income statement contain?
On September 1, Takka Myers opened Takka Myers Tutoring Service.INSTRUCTIONSAnalyze the following transactions. Use the fundamental accounting equation form to record the changes in property, claims
On July 1, Alfred Herron established Herron Commercial Appraisal Services, a firm that provides expert commercial appraisals and represents clients in commercial appraisal
What is a limited liability company (LLC)?
How does one become a Certified Bookkeeper (CB)?
What does the Certified Bookkeeper (CB) designation imply?
What is the purpose of the Public Company Accounting Oversight Board?
Fraud is intentional or reckless acts that result in the confiscation of a firm’s assets or the misrepresentation of the firm’s accounting data.a. Trueb. False
All of the following are goals of internal control except:a. Policies and procedures to safeguard assets.b. Ensuring reliability of accounting data.c. Fraud prevention.d. Encouraging noncompliance
What is the function of the Securities and Exchange Commission?
Pauline Palmer began a new business by depositing $100,000 in the business bank account. She wrote two checks from the business account: $20,000 for office furniture and $5,000 for office supplies.
What information does the statement of owner’s equity contain?
U Fix It Hardware had revenues of $105,000 and expenses of $60,000. How does this affect owner’s equity?a. $90,000 increaseb. $45,000 increasec. $165,000 decreased. $40,000 decrease
Oriental Rugs has no liabilities. The assets and owner’s equity balances are as follows. What is the balance of Supplies?Cash
Technology World had the following revenue and expenses during the month ended July 31. Did the firm earn a net income or incur a net loss for the period? What was the amount? Fees for computer
What information is contained in the income statement?a. Revenues and expenses for a period of timeb. Assets, liabilities, and owner’s equity for a period of timec. Revenue and expenses on a
Precision Drilling has the following balances in its assets and liability accounts. What is the balance of Avion Canada, Capital?Cash
What information is contained on the balance sheet?a. Revenues and expenses for a period of timeb. Assets, liabilities, and owner’s equity for a period of timec. Revenue and expenses on a specific
The following equation shows the effects of a number of transactions that took place at Cantu Auto Repair Company during the month of July. Describe each transaction. Assets Accounts Cash +
Zena Brown has the following balances in its assets, liability, and owner’s equity accounts. What is the balance of Cash?Cash
All of the following information is contained on the statement of owner’s equity except:a. Net income or net loss for the period.b. Owner’s equity at the beginning and end of the period.c.
What is revenue?

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