FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 1: Introduction to Accounting and Business

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 51

Essay

Review LaterAdd Note

Review Later

Explain the meaning of the business entity concept.

Correct Answer

verified

The business entity concept limits the e...

View Answer

Show Answer

Question 52

Essay

Review LaterAdd Note

Review Later

The accountant for Scott Industries prepared the following list of accounting equation element balances from the company's records for the year ended December 31: ​ $\begin{array} { l r l r } \text { Fees earned } & \$ 165,000 & \text { Cash } & \$ 30,000 \\\text { Accounts receivable } & 14,000 & \text { Selling expenses } & 44,000 \\\text { Equipment } & 64,000 & \text { Scott, capital } & 27,000 \\\text { Accounts payable } & 12,000 & \text { Interest income } & 3,000 \\\text { Salaries and wages expense } & 40,000 & \text { Prepaid rent } & 2,000 \\\text { Income taxes payable } & 5,000 & \text { Income taxes expense } & 18,000 \\\text { Notes payable } & 20,000 & \text { Rent expense } & 20,000\end{array}$ -Determine the total assets at the end of the current year for Scott Industries.

Correct Answer

verified

$110,000
($30,000 Cash + $14,0...

View Answer

Show Answer

Question 53

Essay

Review LaterAdd Note

Company G has a ratio of liabilities to stockholders' equity of 0.12 and 0.28 for Year 1 and Year 2, respectively. In contrast, Company M has a ratio of liabilities to stockholders' equity of 1.13 and 1.29 for the same period.​REQUIRED:Based on this information, which company's creditors are more at risk and why? Should the creditors of either company fear the risk of nonpayment?

Generally accepted accounting principles regulate how and what financial information is reported by businesses.

Financial reports are used by

No significant differences exist between the accounting standards issued by the FASB and the IASB.

Match the following characteristics with the form of business entity that best describes it. Each may be used more than once. -Comprises 70% of business entities in the United States

The accountant for Scott Industries prepared the following list of accounting equation element balances from the company's records for the year ended December 31: ​ $\begin{array} { l r l r } \text { Fees earned } & \$ 165,000 & \text { Cash } & \$ 30,000 \\\text { Accounts receivable } & 14,000 & \text { Selling expenses } & 44,000 \\\text { Equipment } & 64,000 & \text { Scott, capital } & 27,000 \\\text { Accounts payable } & 12,000 & \text { Interest income } & 3,000 \\\text { Salaries and wages expense } & 40,000 & \text { Prepaid rent } & 2,000 \\\text { Income taxes payable } & 5,000 & \text { Income taxes expense } & 18,000 \\\text { Notes payable } & 20,000 & \text { Rent expense } & 20,000\end{array}$ -Determine the total liabilities at the end of the current year for Scott Industries.

The balance sheet represents the accounting equation.

Selected transaction data of a business for September are summarized below. Determine the following amounts for September: (a) total revenue, (b) total expenses, (c) net income. Service sales charged to customers on account during September$33,000 Cash received from cash customers for services performed in September28,000 Cash received from customers on account during September:Services performed and charged to customers prior to September13,000 Services performed and charged to customers during September18,000 Expenses incurred prior to September and paid during September 6,500Expenses incurred and paid in September36,250 Expenses incurred in September but not paid in September5,000 Expenses for supplies used and insurance (not included above)applicable to September2,000

Two factors that typically lead to ethical violations are relevance and timeliness of accounting information.

If the liabilities owed by a business total $300,000 and owner's equity is equal to $300,000, then the assets also total $300,000.

Revenues are reported when

Donner Company is selling a piece of land adjacent to its business. An appraisal reported the market value of the land to be $120,000. Focus Company initially offered to buy the land for $107,000. The companies settled on a purchase price of $115,000. On the same day, another piece of land on the same block sold for $122,000. Under the cost concept, what amount will be used to record this transaction in the accounting records?

Which of the following is a service business?

The statement of cash flows consists of three sections: cash flows from operating activities, cash flows from income activities, and cash flows from equity activities.

Match each of the following characteristics with the financial statement that best describes it. Each may be used more than once. -Reports only revenues and expenses

Match the following business types with each business listed below. Each may be used more than once. -A men's clothing store

Profit is the difference between

Match the following business types with each business listed below. Each may be used more than once. -An automobile dealer