Questions and Answers of Financial Accounting Tool

Which account will have a zero balance after a com- (L0 4) pany has journalized and posted closing entries?(a) Service Revenue.(b) Supplies.(c) Prepaid Insurance.(d) Accumulated Depreciation.
Which types of accounts will appear in the post- (L0 4) closing trial balance?(a) Permanent accounts.(b) Temporary accounts.(c) Expense accounts.(d) None of the above.
All of the following are required steps in the account- ( $L 04$ ) ing cycle except:(a) journalizing and posting elosing entries.(b) preparing an adjusted trial balance.(c) preparing a post-closing
Brady Company entered into these transactions during May 2017, its first month of operations.1. Stockholders invested $40,000 in the business in exchange for common stock of the company.Purchased
During 2017, its first year of operations as a delivery service, Persimmon Corp. Determine effect of transactions entered into the following transactions. on basic accounting equation.1. Issued
A tabular analysis of the transactions made during August 2017 by Wolfe Company Analyze transactions and during its first month of operations is shown below. Each increase and decrease in stock-
The tabular analysis of transactions for Wolfe Company is presented in E3-4.Instructions Prepare an income statement and a retained earnings statement for August and a classified balance sheet at
The following accounts, in alphabetical order, were selected from recent financial statements of Krispy Kreme Doughnuts, Inc.Instructions For each account, indicate (a) whether the normal balance is
This information relates to McCall Real Estate Agency.Oct. 1 corporation.Stockholders invest $30,000 in exchange for common stock of the 2 Hires an administrative assistant at an annual salary of
Transaction data for McCall Real Estate Agency are presented in E3-8.Instructions Journalize the transactions. Do not provide explanations.
The T-accounts below summarize the ledger of Salvador’s Gardening Company, Inc.at the end of the first month of operations.Instructions Apr. 15 800 (a) Prepare the journal entries (including
Here is the ledger for Kriscoe Co.Instructions (a) Reproduce the journal entries for only the transactions that occurred on October 1, 10, and 20, and provide explanations for each.(b) Prepare a
The accounts in the ledger of Rapid Delivery Service contain the following balances financial statements. on July 31, 2017.Instructions (a) Prepare a trial balance with the accounts arranged as
Review the transactions listed in E3-1 for Thyme Advertising Company. Classify cash-flow activities. each transaction as either an operating activity, investing activity, or financing activity, or(LO
Review the transactions listed in E3-3 for Persimmon Corp. Classify each transaccash-flow activities. tion as either an operating activity, investing activity, or financing activity, or if no cash
On April 1, Wonder Travel Agency Inc. was established. These transactions were compute net income. completed during the month.(LO 1), AP . Stockholders invested $30,000 cash in the company in
Nona Curry started her own consulting firm, Curry Consulting Inc., on May 1, 2017. The following transactions occurred during the month of May.May 1 Stockholders invested $15,000 cash in the business
Bradley's Miniature Golf and Driving Range Inc. was opened on March 1 by Bob Dean. These selected events and transactions occurred during March.Mar. 1 Stockholders invested $50,000 cash in the
This is the trial balance of Lacey Company on September 30.The October transactions were as follows.Oct. 5 Received $1,300 in cash from customers for accounts receivable due.10 Billed customers for
This trial balance of Washburn Co. does not balance.Each of the listed accounts has a normal balance per the general ledger. An examination of the ledger and journal reveals the following errors:Ls
In November 2017, after having incorporated Cookie Creations Inc., Natalie begins operations. She has decided not to pursue the offer to supply cookies to Biscuits. Instead, the company will focus on
Which is not part of the recording process?(a) Analyzing transactions.(b) Preparing an income statement.(c) Entering transactions in a journal.(d) Posting journal entries.
What are the normal balances for the following accounts of Apple? (a) Accounts Receivable, (b) Accounts Payable, (c) Sales, and (d) Selling, General, and Administrative Expenses.
Presented below are three economic events. On a sheet of paper, list the letters (a),(b), and (c) with columns for assets, liabilities, and stockholders’ equity. In each column, indicate whether
During 2017, Manion Corp. entered into the following transactions.1. Borrowed $60,000 by issuing bonds.2. Paid $9,000 cash dividend to stockholders.3. Received $13,000 cash from a previously billed
During 2017, Rostock Company entered into the following transactions.1. Purchased equipment for $286,176 cash.2. Issued common stock to investors for $137,590 cash.3. Purchased inventory of $68,480
Selected transactions for Montes Company are presented below in journal form (without explanations). Post the transactions to T-accounts. Date Account Title Debit Credit May 5 Accounts Receivable
From the ledger balances below, prepare a trial balance for Peete Company at June 30, 2017. All account balances are normal. Accounts Payable $ 1,000 Service Revenue $8,600 Cash 5,400 Accounts
Suppose the following items are taken from the 2017 balance sheet of Yahoo! Inc.(All dollars are in millions.)Instructions Prepare a classified balance sheet for Yahoo! Inc. as of December 31, 2017.
These items are taken from the financial statements of Martin Corporation for 2017.Instructions Prepare an income statement, a retained earnings statement, and a classified balance sheet as of
You are provided with the following information for Lazuris Enterprises, effective as of its April 30, 2017, year-end.Instructions (a) Prepare an income statement and a retained earnings statement
The financial statements of Apple Inc. are presented in Appendix A at the end of textbook.Instructions Answer the following questions using the financial statements and the notes to the financial
The financial statements of Columbia Sportswear Company are presented in £Appendix B. Financial statements of VF Corporation are presented in Appendix C. Assume Columbia’s weighted-average number
Amazon.com, Inc.'s financial statements are presented in Appendix D. Financial £statements of Wal-Mart Stores, Inc. are presented in Appendix E.Instructions(a) For each company, calculate the
Purpose: Identify summary liquidity, solvency, and profitability information about companies, and compare this information across companies in the same industry.Address: http://biz.yahoo.com/i Steps
The Feature Story described the dramatic effect that investment bulletin boards are having on the investment world. This exercise will allow you to evaluate a bulletin board discussing a company of
Every company needs to plan in order to move forward. Its top management must consider where it wants the company to be in three to five years. Like a company, you need to think about where you want
Auditors provide a type of certification of corporate financial statements. Certification is used in many other aspects of business as well. For example, it plays a critical role in the
The following information is available for Lessila Bowling Alley at December 31, 2017.Prepare a classified statement of financial position. Assume that $13,900 of the notes payable will be paid in
The financial statements of Louis Vuitton are presented in Appendix F. Instructions for accessing and using the company’s complete annual report, including the notes to its financial statements,
The following information (in millions of dollars) is available for Limited Brands for a recent year: sales revenue $\$ 9,043$, net income $\$ 220$, preferred dividend $\$ 0$, and
Given the characteristics of useful accounting information, complete each of the following statements.(a) For information to be , it should have predictive and confirmatory value.(b) means that
Here are some qualitative characteristics of useful accounting information:1. Predictive value 3. Verifiable 2. Neutral 4. Timely Match each qualitative characteristic to one of the following
Mylar Corporation has collected the following information related to its December 31, 2017, balance sheet.Prepare the assets section of Mylar Corporation’s balance sheet. Accounts receivable
The following financial statement items were taken from the financial statements of Gomez Corp.Match each of the financial statement items to its proper balance sheet classification. (See E2-1, on
The following characteristics, assumptions, principles, and constraint guide the FASB when it creates accounting standards. Relevance Faithful representation Comparability Consistency Monetary unit
The following are the major balance sheet classifications.Instructions Classify each of the following financial statement items taken from Ming Corporation’s balance sheet. Current assets (CA)
The major balance sheet classifications are listed in E2-1.Instructions Classify each of the following financial statement items based upon the major balance (LO 1), AP PaaS : ;sheet classifications
These items are taken from the financial statements of Longhorn Co. at December 31, 20 17.Instructions Prepare a classified balance sheet. Assume that $13,600 of the note payable will be paid in
Suppose the following information is available for Callaway Golf Company for the years 2017 and 2016. (Dollars are in thousands, except share information.)There were 73,139,000 shares outstanding at
Nordstrom, Inc. operates department stores in numerous states. Selected financial statement data (in millions of dollars) for a recent year follow.Instructions (a) Compute working capital and the
Which of the following is an example of a financing activity? die(a) Issuing shares of common stock.(b) Selling goods on account.(c) Buying delivery equipment.(d) Buying inventory.
The financial statements for Macias Corporation contained the following information.Accounts receivable $ 5,000 Sales revenue 75,000 Cash 15,000 Salaries and wages expense 20,000 Rent expense 10,000
As of December 31, 2017, Rockford Corporation has assets of $3,500 and stockholders’ equity of $1,500. What are the liabilities for Rockford Corporation as of December 31, 2017?(a) $1,500.(b)
Why would a bank want to monitor the dividend payment practices of the corporations to which it lends money?
Introduction to Financial Statements Which of these items are liabilities of White Glove Cleaning Service? (a) Cash. (b) Accounts payable. (c) Dividends. (f) Equipment. (g) Salaries and wages
The accounting equation is Assets = Liabilities + Stockholders’Equity. Appendix A, at the end of this textbook, reproduces Apple’s financial statements. Replacing words in the equation with
Presented below are a number of transactions. Determine whether each transaction affects common stock (C), dividends (D), revenues (R), expenses (E), or does not affect stockholders’ equity (NSE).
In alphabetical order below are balance sheet items for Karol Company at December 31, 2017. Prepare a balance sheet following the format of Illustration 1-7 (page 13). Accounts payable $65,000
Eskimo Pie Corporation markets a broad range of frozen treats, including its famous Eskimo Pie ice cream bars. The following items were taken from a recent income statement and balance sheet. In each
Indicate which statement you would examine to find each of the.following items:income statement (IS), balance sheet (BS), retained earnings statement (RES), or statement of cash flows (SCF).(a)
Identify each of the following organizational characteristics sith the bane iisainedieeel form or forms with which it is associated.(a) Easier to transfer ownership.(b) Easier to raise funds.(c) More
Here is a list of words or phrases discussed in this chapter: 1. Corporation 2. Creditor 3. Accounts receivable Instructions 4. Partnership 7. Accounts payable 8. Auditor's opinion 6. Common stock 5.
All businesses are involved in three types of activities—financing, investing, and operating. Listed below are the names and descriptions of companies in several different industries.Instructions
The Bonita Vista Golf & Country Club details the following accounts in its financial statements.Instructions Classify each of the above accounts as an asset (A), liability (L), stockholders’
This information relates to Benser Co. for the year 2017.Instructions After analyzing the data, prepare an income statement and a retained earnings statement for the year ending December 31, 2017.
Presented here is information for Zheng Inc. for 2017.Instructions Prepare the 2017 retained earnings statement for Zheng Inc. Retained earnings, January 1 Service revenue Total expenses Dividends
Consider each of the following independent situations.(a) The retained earnings statement of Lee Corporation shows dividends of $68,000, while net income for the year was $75,000.(b) The statement of
This information is for Williams Corporation for the year ended December 31, 2017.Instructions (a) Prepare the 2017 statement of cash flows for Williams Corporation.(b) Suppose you are one of
The summaries of data from the balance sheet, income statement, and retained earnings statement for two corporations, Walco Corporation and Gunther Enterprises, are missing amounts. presented as
Presented below are five independent situations.(a) Three physics professors at MIT have formed a business to improve the speed of information transfer over the Internet for stock exchange
Amazon.com, Inc.’s financial statements are presented in Appendix D. Financial statements of Wal-Mart Stores, Inc. are presented in Appendix E.Instructions(a) Based on the information contained in
Purpose: Identify summary information about companies. This information includes basic descriptions of the company’s location, activities, industry, financial health, and financial
The FASB has developed the Financial Accounting Standards Board Account- ©ing Standards Codification (or more simply “the Codification”). The FASB’s primary goal in developing the Codification
. Natalie Koebel spent much of her childhood learning the art of cookie-making from her grandmother. They spent many happy hours mastering every type of cookie imaginable and later devised new
O- Which is an indicator of profitability?(a) Current ratio.(b) Earnings per share.(c) Debt to assets ratio.(d) Free cash flow
O- For 2017, Spanos Corporation reported net income $\$ 26,000$, net sales $\$ 400,000$, and weightedaverage shares outstanding 4,000 . There were preferred dividends of $\$ 2,000$. What was
The following ratios are available for Reilly Inc. and(a) higher liquidity, higher solvency, and higher profitability.(b) lower liquidity, higher solvency, and higher profitability.(c) higher
Companies can use free cash flow to:(a) pay additional dividends.(b) acquire more property, plant, and equipment.(c) pay off debts.(d) All of the above.
What is the primary criterion by which accounting ( 103 ) information can be judged?(a) Consistency.(b) Predictive value.(c) Usefulness for decision-making.(d) Comparability.
The characteristicofinformation thatevaluates whether ( 103 ) it is large enough to impact a decision.(a) Comparability.(c) Cost.(b) Materiality.(d) Consistency.
Oolding all other factors constant, indicate whether each of the following signals generally good or bad news about a company.(a) Increase in earnings per share.(b) Increase in the current ratio.(c)
How much federal income tax would be paid by a corporation with $\$ 8$ million of taxable income, assuming that tax rates have not changed from those shown in Table 26-2? TABLE 26-2 Corporate Tax
Explain the need for financial managers to balance liquidity and solvency.
Coffin Corporation is preparing a worksheet for labor. Their average starting salary is $\$ 45,000$. Benefits are $25 %$ this year. They expect them to go up to $27 %$ next year. They are expecting
What is the equation that provides a framework for financial accounting?
What is a fiscal year?
What does an accountant mean by short-term?
What does the income statement demonstrate for the organization?
Why do organizations that use accrual accounting also have cash flow statements?
What are the two major sources of capital for an organization, aside from reinvestment of profits?
Where do sole proprietorships generally get debt funds from?
What is the major capital source for not-for-profit organizations, early in their existence?
What are two main advantages that the corporate form has over partnerships?
What are several advantages of common stock?
What is a bond?
Why would an organization issue stock options, stock rights, or warrants?
Do stock splits provide a direct benefit to stockholders?
Many companies need to get funding from venture capitalists to get their business going. What are the major negatives of using venture capitalists to finance a business?
What is a strategic plan?

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