b. Do not recognize revenue until steel is shipped. c. Do not recognize revenue until next year after the games are played.

Size: px
Start display at page:

Download "b. Do not recognize revenue until steel is shipped. c. Do not recognize revenue until next year after the games are played."

Transcription

1 CHAPTER FOUR SE4-2 Revenue recognition a. Recognize revenue from car sales for 12,000. Notes receivable $12,000 Sales revenue $12,000 b. Do not recognize revenue until steel is shipped. c. Do not recognize revenue until next year after the games are played. $50,000 Unearned revenue $50,000 d. Do not recognize revenue in current year. Revenue should have been recognized in previous year as accounts receivable. e. Do not recognize revenue until services are rendered in the following year. SE4-3 $5,000 Unearned revenue $5,000 Revenue recognition a. Recognize $5,000 of Salary Expense. b. Do not recognize expense until shirts are sold. c. Do not recognize expense. d. Recognize Cost of Goods Sold of $6,000. e. Recognize expense for the amount of the utility bill, Utilities Expense. f. Recognize Insurance Expense for $2,500. Page 1 of 6

2 E4-1 Transactions for JG Company and how they affect the accounts a. Increases assets (cash) and liabilities (notes payable) b. Increases assets (prepaid rent) and decreases assets (cash) c. Increases assets (prepaid insurance) and decreases assets (cash) d. Increases assets (supplies on hand) and decreases assets (cash) e. Increases assets (cash) and increases owners equity (revenue) E4-2 Prepaid insurance Revenues 5,000 (a) 3,000 (b) 960 (c) 35,000 (e) 35,000 (e) 960 (c) Supplies on hand Prepaid rent (on equipment) Notes payable BB*100 3,000 (b) 5,000 (a) * BB = beginning balance Adjustments to JG s accounts (from E4 1) Adjustment 1 (adj. 1) Adjustment 2 (adj. 2) Interest on note in transaction 4 1(a): $5, (9 12) = $300. Debit Interest expense; credit Interest payable. Rent on copy machine for June December 7 $250 per month = $1,750 Debit Rent expense; credit Prepaid rent. Adjustment 3 (adj. 3) Insurance expense from July 1 Dec. 31 (6 12) $960 = $480 Debit Insurance expense; credit Prepaid insurance Page 2 of 6

3 E4-2 CONTINUED Adjustment 4 (adj. 4) Record supplies expense for the period. Adjustment to make balance in Supplies $200. Debit Supplies expense; credit Supplies for $500. Prepaid insurance Revenues 5,000 (a) 3,000 (b) 960 (c) 35,000 (e) 35,000 (e) 960 (c) Supplies on hand Prepaid rent (on equipment) Notes payable BB*100 3,000 (b) 5,000 (a) * BB = beginning balance Interest expense Supplies expense Rent expense 300 (adj. 1) 500 (adj. 4) 1,750 (adj. 2) Interest payable Insurance expense 2,000 (adj. 5) 480 (adj. 3) E4-6 Climbers Rock Company: Closing entry and net income for the period Date Closing Journal Entry DR CR 12/31 Sales $94,000 Dividends $ 4,000 Cost of goods sold $ 45,000 Depreciation expense $ 3,000 Salaries expense $ 5,000 $27,000 Net income = $27,000 Page 3 of 6

4 P4-5A Randy s Radiator Repair Shop: Journal entries, closing entries, and trial balance a. Prepaid rent b. Supplies c. Equipment d. Prepaid insurance e. Prepaid advertising Journal Entries 12,000 10,000 2, ,000 10,000 2, f. Notes payable 30,000 30,000 g. Revenues h. No entry at this time. i. Dividends Adjusting Entries Interest expense Interest payable Depreciation expense Accumulated depreciation Rent expense Prepaid rent Supplies expense Supplies Insurance expense Prepaid insurance Advertising expense Prepaid advertising ,500 8, ,500 8, Page 4 of 6

5 P4-5A CONTINUED Closing Entries Revenues Depreciation expense Interest expense Rent expense Supplies expense Insurance expense Advertising expense Dividends 15, ,500 8, Trial Balance (in $) Unadjusted Adjusted DR CR DR CR 23,100 23,100 Supplies 10,000 2,000 Equipment 2,000 2,000 Accumulated depreciation 400 Prepaid rent 12,000 6,500 Prepaid insurance 250 Prepaid advertising Revenues Notes payable 30,000 30,000 Interest payable 600 Dividends Interest expense 600 Rent expense 5,500 Supplies expense 8,000 Depreciation expense 400 Insurance expense 750 Advertising expense 525 Totals $50,000 $50,000 $5 $5 Page 5 of 6

6 P4-5A CONTINUED Trial Balance (in $) Closing Postclosing DR CR DR CR 23,100 Supplies 2,000 Equipment 2,000 Accumulated depreciation 400 Prepaid rent 6,500 Prepaid insurance 250 Prepaid advertising 375 Revenues Notes payable 30,000 Interest payable 600 Dividends Interest expense 600 Rent expense 5,500 Supplies expense 8,000 Depreciation expense 400 Insurance expense 750 Advertising expense 525 3,225 3,225 Totals $ $ $34,225 $34,225 Page 6 of 6

Accounting Cycle. Matching Principle

Accounting Cycle. Matching Principle CHAPTER 3 Accounting Cycle Analyze and record the transactions Post the transactions and prepare trial balance Adjust the accounts and prepare trial balance Prepare the financial statements Close the accounts

More information

TRANSACTIONS ANALYSIS EXAMPLE. Maxwell Partners Medical Diagnostic Services report the following information for 2011, their first year of operations:

TRANSACTIONS ANALYSIS EXAMPLE. Maxwell Partners Medical Diagnostic Services report the following information for 2011, their first year of operations: TRANSACTIONS ANALYSIS EXAMPLE Maxwell Partners Medical Diagnostic Services report the following information for 2011, their first year of operations: 1. Billings to clients for services provided: $350,000

More information

COMPLETION OF THE ACCOUNTING CYCLE - Closing Entries -

COMPLETION OF THE ACCOUNTING CYCLE - Closing Entries - COMPLETION OF THE ACCOUNTING CYCLE - Closing Entries - Worksheet Overview Trial Balance Adjustments Adjusted Trial Balance Income Statement Balance Sheet Account Titles Debit Credit Debit Credit Debit

More information

Vol. 1, Chapter 3 - Accounting Adjustments

Vol. 1, Chapter 3 - Accounting Adjustments Vol. 1, Chapter 3 - Accounting Adjustments Problem 1 1. ($20,000 2,000) 48 = $375 per month 2. Jan. 31 Depreciation Expense $375 Accumulated Depreciation Van $375 To record depreciation expense for January

More information

Accrual accounting ACCRUAL VERSUS CASH BASIS OF ACCOUNTING. ACCRUAL VERSUS CASH BASIS OF ACCOUNTING continued. Chapter 3

Accrual accounting ACCRUAL VERSUS CASH BASIS OF ACCOUNTING. ACCRUAL VERSUS CASH BASIS OF ACCOUNTING continued. Chapter 3 Chapter 3 Accrual accounting concepts PowerPoint presentation by Anne Abraham University of Wollongong 2009 John Wiley & Sons Australia, Ltd ACCRUAL VERSUS CASH BASIS OF ACCOUNTING Accrual-based accounting

More information

EXERCISES. Does not normally require adjustment. Normally requires adjustment (AE).

EXERCISES. Does not normally require adjustment. Normally requires adjustment (AE). EXERCISES Ex. 3 1 1. Prepaid expense 2. Accrued revenue 3. Unearned revenue 4. Accrued expense 5. Unearned revenue 6. Prepaid expense 7. Accrued expense 8. Accrued expense Ex. 3 2 Account Accounts Receivable...

More information

SOLUTIONS. Learning Goal 16

SOLUTIONS. Learning Goal 16 Learning Goal 16: Prepare Closing Entries S1 Learning Goal 16 Multiple Choice 1. d 2. a 3. b 4. d Because drawing is closed directly into the capital account, not into income summary. 5. c 6. b This a

More information

Closing Entries and the Postclosing Trial Balance

Closing Entries and the Postclosing Trial Balance 6-1 McGraw-Hill 2009 The McGraw-Hill Companies, Inc. All rights reserved. Chapter Closing Entries and the Postclosing Trial Balance 6 Section 1: Closing Entries Section Objectives 1. Journalize and post

More information

Time Period Assumption

Time Period Assumption ILLUSTRATION 3-1 GUIDELINES TO REPORT REVENUE AND EXPENSES Time Period Assumption Economic life of business can be divided into artificial time periods Revenue Recognition Principle Revenue recognized

More information

Accumulated Depreciation Equipment

Accumulated Depreciation Equipment Chapter 4 Completing the Accounting Cycle > DO IT! Worksheet Balance sheet: Extend assets to debit column. Extend liabilities to credit column. Extend contra assets to credit column. Extend drawings account

More information

ACCT1115. Review Package - Midterm SOLUTION Fall 2013

ACCT1115. Review Package - Midterm SOLUTION Fall 2013 ACCT1115 Review Package - Midterm SOLUTION Fall 2013 Part I Multiple Choice 1) How should you record the purchase of an expensive automobile? a) Decrease cash, increase assets b) Decrease cash, increase

More information

Chapter 4. Completing the accounting cycle

Chapter 4. Completing the accounting cycle 1 Chapter 4 Completing the accounting cycle 2 Learning objectives 1. Prepare an accounting worksheet and describe its purpose 2. Prepare a classified balance sheet and explain the major headings 3. Explain

More information

1. If the assets owned by a business total $100,000 and liabilities total $70,000, stockholders' equity totals $30,000.

1. If the assets owned by a business total $100,000 and liabilities total $70,000, stockholders' equity totals $30,000. Rallis Page 1 Name: _ Date: 1. If the assets owned by a business total $100,000 and liabilities total $70,000, stockholders' equity totals $30,000. A) True B) False 2. If total liabilities decreased by

More information

Chapter 3. Adjusting the accounts. Appendix 3A: An alternative method of recording deferrals

Chapter 3. Adjusting the accounts. Appendix 3A: An alternative method of recording deferrals 1 Chapter 3 Adjusting the accounts Appendix 3A: An alternative method of recording deferrals 2 Learning objectives 1. Prepare adjusting entries for prepaid expenses originally recorded in an expense account

More information

CHAPTER 3 ADJUSTING THE ACCOUNTS

CHAPTER 3 ADJUSTING THE ACCOUNTS CHAPTER 3 ADJUSTING THE ACCOUNTS TIME PERIOD ASSUMPTION The time period (or periodicity) assumption assumes that the economic life of a business can be divided into artificial time periods generally a

More information

CHAPTER 3. BE3-2 Advertising. Dec. 31 Advertising Supplies Expense 7200 Advertising Supplies 7200 to adjust. BE3-3 Bere Co.

CHAPTER 3. BE3-2 Advertising. Dec. 31 Advertising Supplies Expense 7200 Advertising Supplies 7200 to adjust. BE3-3 Bere Co. CHAPTER 3 BE3-2 Advertising Advertising Supplies Supplies Expense 8700 7200 7200 1500 7200 Dec. Advertising Supplies Expense 7200 Advertising Supplies 7200 BE3-3 Bere Co. Prepaid Insurance Insurance Expense

More information

Chapter 5 Accounting for Merchandising Operations

Chapter 5 Accounting for Merchandising Operations Chapter 5 Accounting for Merchandising Operations Purchase Transactions Purchaser records goods at cost. When goods are returned, purchaser reduces Inventory. On September 5, De La Hoya Company buys merchandise

More information

Assignment 6: Adjusting Journal Entries and

Assignment 6: Adjusting Journal Entries and Name: Due Date: December 12, 2011 Score: out of a possible 47 Course value: 7.5% Assignment 6: Adjusting Journal Entries and Worksheets A series of transactions are presented and their journal entries

More information

Supplement to CHAPTER 3 CLOSING ENTRIES AND THE WORK SHEET

Supplement to CHAPTER 3 CLOSING ENTRIES AND THE WORK SHEET Supplement to CHAPTER 3 CLOSING ENTRIES AND THE WORK SHEET Answers to Review Questions 1. No, the work sheet cannot be used as a substitute for the financial statements. It is a tool used in preparing

More information

Completing the Accounting Cycle

Completing the Accounting Cycle C H A P T E R 4 Completing the Accounting Cycle Financial Accounting 14e Warren Reeve Duchac human/istock/360/getty Images Flow of Accounting Information (slide 1 of 5) End-of-Period Spreadsheet (Work

More information

CHAPTER 5. Accounting for Merchandising Operations ASSIGNMENT CLASSIFICATION TABLE. Brief. B Problems. A Problems 2, 3, 4 1 1

CHAPTER 5. Accounting for Merchandising Operations ASSIGNMENT CLASSIFICATION TABLE. Brief. B Problems. A Problems 2, 3, 4 1 1 CHAPTER 5 Accounting for Merchandising Operations ASSIGNMENT CLASSIFICATION TABLE Study Objectives Questions Brief Exercises Exercises A Problems B Problems *1. Identify the differences between service

More information

The worksheet for Hancock Company shows the following in the financial statement

The worksheet for Hancock Company shows the following in the financial statement Chapter 4 Do it! Susan Elbe is preparing a worksheet. Explain to Susan how she should extend the following adjusted trial balance accounts to the financial statement columns of the worksheet. Cash Accumulated

More information

(a) Prepaid Insurance to recognize insurance expired during the period.

(a) Prepaid Insurance to recognize insurance expired during the period. BRIEF EXERCISE 4-1 (a) (b) (c) (d) (e) (f) Cash $ 100 0 0 +800 2,500 0 Net Income $0 20 +1,300 0 0 600 BRIEF EXERCISE 4-2 (a) Prepaid Insurance to recognize insurance expired during the period. (b) Depreciation

More information

The Statement of Cash Flows Direct Method

The Statement of Cash Flows Direct Method 23 The Statement of Cash Flows Direct Method DEMONSTRATION PROBLEM The financial statements of Bolero Corporation follow. Copyright Houghton Mifflin Company. All rights reserved. 1 Bolero Corporation Income

More information

CHAPTER 6 ACQUISITIONS AND PAYMENT: INVENTORY AND LIABILITIES

CHAPTER 6 ACQUISITIONS AND PAYMENT: INVENTORY AND LIABILITIES CHAPTER 6 ACQUISITIONS AND PAYMENT: INVENTORY AND LIABILITIES Acquiring Merchandise for Sale Purchases (pp. 214-16) Purchase Discounts When a company takes advantage of a purchase discount, it reduces

More information

Web Appendix A The Merchandising Work Sheet and Closing Entries

Web Appendix A The Merchandising Work Sheet and Closing Entries Web Appendix A The Merchandising Work Sheet and Closing Entries This appendix shows how to prepare the work sheet and closing entries for merchandising companies. The work sheet for a merchandising company

More information

Authored for ENMU Tutoring Services. By Jessica Huff

Authored for ENMU Tutoring Services. By Jessica Huff By Jessica Huff The standard accounting equation is Assets=Liabilities + Stockholders Equity. Depending on which item someone is looking at will determine what the normal balance is. The normal balance

More information

BUS312A/612A Financial Reporting I. Homework 9.10.2014 & 9.15.2014 The Accounting Cycle Review Chapter 3

BUS312A/612A Financial Reporting I. Homework 9.10.2014 & 9.15.2014 The Accounting Cycle Review Chapter 3 BUS312A/612A Financial Reporting I Homework 9.10.2014 & 9.15.2014 The Accounting Cycle Review Chapter 3 E3-1 (Transaction Analysis-Service Company) During the first month of operations of her business

More information

Accounting II Second Semester Final

Accounting II Second Semester Final Name: Class: Date: Accounting II Second Semester Final Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. 1. Profit is the difference between:

More information

Chapter 4 Adjustments, Financial Statements, and the Quality of Earnings

Chapter 4 Adjustments, Financial Statements, and the Quality of Earnings Chapter 4 Adjustments, Financial Statements, and the Quality of Earnings ANSWERS TO QUESTIONS 1. Adjusting entries are made at the end of the accounting period to record all revenues and expenses that

More information

EXERCISES. Ex Ex. 2 2

EXERCISES. Ex Ex. 2 2 EXERCISES Ex. 2 1 Balance Sheet Accounts Assets Flight Equipment Purchase Deposits for Flight Equipment a Spare Parts and Supplies Liabilities Accounts Payable Air Traffic Liability b Stockholders Equity

More information

> DO IT! Chapter 3 Adjusting the Accounts. Timing Concepts. Adjusting Entries for Deferrals D-12. Solution

> DO IT! Chapter 3 Adjusting the Accounts. Timing Concepts. Adjusting Entries for Deferrals D-12. Solution Chapter 3 Adjusting the Accounts Timing Concepts Review the glossary terms. Study carefully the revenue recognition principle, the expense recognition principle, and the time period assumption. Several

More information

Financial Statements Tutorial

Financial Statements Tutorial Financial Statement Review: Financial Statements Tutorial There are four major financial statements used to communicate information to external users (creditors, investors, suppliers, etc.) - 1. Balance

More information

Adjusting and Closing Entries

Adjusting and Closing Entries Adjusting and Closing Entries Adjusting and Closing entries tend to be difficult to grasp at first. A reason for this might be due to the type of transactions requiring adjustment, which tend to be unfamiliar.

More information

PROFIT & LOSS BEFORE. INCOME Fleet Income 10 cars $ 75,000 Recommended tip $ 15,000 TOTAL. $ 90,000 PERSONNEL Gross Admin/accounting salaries $ 16,200

PROFIT & LOSS BEFORE. INCOME Fleet Income 10 cars $ 75,000 Recommended tip $ 15,000 TOTAL. $ 90,000 PERSONNEL Gross Admin/accounting salaries $ 16,200 PROFIT & LOSS BEFORE INCOME Fleet Income 10 cars $ 75,000 Recommended tip $ 15,000 TOTAL $ 90,000 PERSONNEL Gross Admin/accounting salaries $ 16,200 Payroll taxes benefits processing $ 3,000 CHAUFFEURS

More information

Learn Accounting Understand Business: Course Review Answers

Learn Accounting Understand Business: Course Review Answers Learn Accounting Understand Business: Course Review Answers 1. What type of accounting measures the activity of the company by looking at economic events regardless of when cash transactions occur? A.

More information

Chapter 5 Accrual Adjustments and Financial Statement Preparation. Revenue recognition Matching expenses to revenues Expenses related to periods

Chapter 5 Accrual Adjustments and Financial Statement Preparation. Revenue recognition Matching expenses to revenues Expenses related to periods Chapter 5 Accrual Adjustments and Financial Statement Preparation Revenue recognition Matching expenses to revenues Expenses related to periods 1 The Measurement of Income major function of accounting

More information

ACC 211/212: Double Entry Logs

ACC 211/212: Double Entry Logs ACC 211/212: Double Entry Logs Journal Entries: o Credits are always indented (account name and value). o The sum of debits will always equal the sum of credits. o The month name is required only for the

More information

CHAPTER 4. Adjusting the accounts and preparing financial statements CONTENTS

CHAPTER 4. Adjusting the accounts and preparing financial statements CONTENTS CHAPTER 4 Adjusting the accounts and preparing financial statements CONTENTS Demonstration problem 4.1 Adjusting entries and corrections 4.2 Adjusting centries and effect on financial statements 4.3 Adjusting

More information

ILLUSTRATION 3-1 DOUBLE-ENTRY ACCOUNTING SYSTEM

ILLUSTRATION 3-1 DOUBLE-ENTRY ACCOUNTING SYSTEM ILLUSTRATION 3-1 DOUBLE-ENTRY ACCOUNTING SYSTEM ASSETS Increase Decrease + DOUBLE-ENTRY ACCOUNTING REAL (PERMANENT) ACCOUNTS = LIABILITIES + Rules of Thumb + If the "normal balance" for an account is a

More information

MIDTERM EXAMINATION. Afaaq_tariq@yahoo.com. Fall 2009

MIDTERM EXAMINATION. Afaaq_tariq@yahoo.com. Fall 2009 MIDTERM EXAMINATION Afaaq_tariq@yahoo.com Fall 2009 FIN621- Financial Statement Analysis Asslam O Alikum FIN621- Financial Statement Analysis (Session 3) solved by Afaaq n Shani Bhai with reference n numerical

More information

CHAPTER 12 ACCRUALS, DEFERRALS, AND THE WORKSHEET

CHAPTER 12 ACCRUALS, DEFERRALS, AND THE WORKSHEET CHAPTER 12 ACCRUALS, DEFERRALS, AND THE WORKSHEET Chapter Opener: Thinking Critically Students may assess that an unexpected decline in sales would mean surplus inventory which would have to be reduced

More information

Review of Accounting Principles

Review of Accounting Principles Appendix A Review of Accounting Principles Appendix A is a review of basic accounting principles and procedures. Standard accounting procedures are based on the double-entry system. This means that each

More information

For More Course Tutorials Visit www.uoptutorial.com

For More Course Tutorials Visit www.uoptutorial.com ACC 205 WEEK 2 EXERCISE ASSIGNMENT REVENUE AND EXPENSES(NEW) Click Here to Buy the Tutorial http://www.uoptutorial.com/index.php?route=product/p roduct&path=641&product_id=9760 For More Course Tutorials

More information

CHAPTER 2 REVIEW OF THE ACCOUNTING PROCESS. Lecture Outline

CHAPTER 2 REVIEW OF THE ACCOUNTING PROCESS. Lecture Outline CHAPTER 2 REVIEW OF THE ACCOUNTING PROCESS Overview Chapter 1 explained that the primary means of conveying financial information to investors, creditors, and other external users is through financial

More information

CHAPTER 4. Completing the Accounting Cycle ASSIGNMENT CLASSIFICATION TABLE. Brief. A Problems. B Problems 1, 2, 3 1, 2, 3, 5, 6, 17 1B, 2B, 3B, 4B, 5B

CHAPTER 4. Completing the Accounting Cycle ASSIGNMENT CLASSIFICATION TABLE. Brief. A Problems. B Problems 1, 2, 3 1, 2, 3, 5, 6, 17 1B, 2B, 3B, 4B, 5B CHAPTER 4 Completing the Accounting Cycle ASSIGNMENT CLASSIFICATION TABLE Study Objectives Questions Brief Exercises Exercises A Problems B Problems *1. Prepare a worksheet. 1, 2, 3, 4, 5 1, 2, 3 1, 2,

More information

Chapter 6 Statement of Cash Flows

Chapter 6 Statement of Cash Flows Chapter 6 Statement of Cash Flows The Statement of Cash Flows describes the cash inflows and outflows for the firm based upon three categories of activities. Operating Activities: Generally include transactions

More information

Accounting Principles Dr. Mishari Alfraih. Adjusting the Accounts

Accounting Principles Dr. Mishari Alfraih. Adjusting the Accounts Accrual- vs. Cash-Basis Accounting Accrual-Basis Accounting Adjusting the Accounts Transactions recorded in the periods in which the events occur Revenues are recognized when earned, rather than when cash

More information

2-8. Identify whether each of the following items increases or decreases cash flow:

2-8. Identify whether each of the following items increases or decreases cash flow: Problems 2-8. Identify whether each of the following items increases or decreases cash flow: Increase in accounts receivable Increase in notes payable Depreciation expense Increase in investments Decrease

More information

PROFESSOR S NAME ACC 255 FALL 2011 COVER SHEET FOR COMPREHENSIVE PROBLEM 2 (CHAPTERS 2, 5-8)

PROFESSOR S NAME ACC 255 FALL 2011 COVER SHEET FOR COMPREHENSIVE PROBLEM 2 (CHAPTERS 2, 5-8) COMPREHENSIVE PROBLEM 2 (CHAPTERS 2, 5-8) Page 137 NAME ANSWER KEY PROFESSOR S NAME SECTION SCORE ACC 255 FALL 2011 COVER SHEET FOR COMPREHENSIVE PROBLEM 2 (CHAPTERS 2, 5-8) INSTRUCTIONS: COMPLETE ALL

More information

CHAPTER 6. Accounting for retailing CONTENTS

CHAPTER 6. Accounting for retailing CONTENTS CHAPTER 6 Accounting for retailing CONTENTS 6.1 Journal entries periodic inventory system 6.2 Journal entries involving discounts, closing entries and statements of financial performance both perpetual

More information

Weida Surveying, Inc. provides land surveying services. During September, its transactions included the following:

Weida Surveying, Inc. provides land surveying services. During September, its transactions included the following: Weida Surveying, Inc. provides land surveying services. During September, its transactions included the following: On September 1 paid rent for the month of September, $4,400 On September 3, provided surveying

More information

The General Journal and the General Ledger

The General Journal and the General Ledger 4-1 McGraw-Hill 2009 The McGraw-Hill Companies, Inc. All rights reserved. Chapter 4 The General Journal and the General Ledger Section 1: The General Journal Section Objectives 1. Record transactions in

More information

Lessor Example Derecognition Approach

Lessor Example Derecognition Approach Lessor Example Derecognition Approach **Disclaimer The exposure draft received nearly 700 letters of comment through the comment period ended December 15, 2010. There is some expectation that key features

More information

BAT 4M: Chapter 3 ANSWERS TO QUESTIONS

BAT 4M: Chapter 3 ANSWERS TO QUESTIONS BAT 4M: Chapter 3 ANSWERS TO QUESTIONS 01. (a) Under the time period assumption, an accountant is required to determine the relevance of each business transaction to specific accounting periods, and its

More information

William B. Pollard, Appalachian State University, Boone, NC 28608, pollardwb@appstate.edu INTRODUCTION

William B. Pollard, Appalachian State University, Boone, NC 28608, pollardwb@appstate.edu INTRODUCTION TEACHING PRINCIPLES OF ACCOUNTING: HELPING STUDENTS IDENTIFY TEN DIFFERENCES WHEN COMPARING A TRIAL BALANCE, AN ADJUSTED TRIAL BALANCE AND A BALANCE SHEET William B. Pollard, Appalachian State University,

More information

Self-test Comprehensive Problems II 综 合 自 测 题 II

Self-test Comprehensive Problems II 综 合 自 测 题 II Self-test Comprehensive Problems II 综 合 自 测 题 II Part One (30%) 1. Give the Chinese/English of the following terms: (5%) subsidiary ledger 统 制 账 户 purchase requisition 现 金 溢 缺 petty cash fund 永 续 盘 存 制

More information

Closing the Books Section 7 Accounting 11

Closing the Books Section 7 Accounting 11 Closing the Books At the end of a fiscal year once all the transactions for the entity have been recorded, the revenue and expense accounts must be closed out to a zero balance. These accounts have been

More information

CENTRE FOR CONTINUING EDUCATION BBA (AVIATION OPERATION)

CENTRE FOR CONTINUING EDUCATION BBA (AVIATION OPERATION) CENTRE FOR CONTINUING EDUCATION BBA (AVIATION OPERATION) BATCH: SEMESTER: NAME: ROLL NO: ASSIGNMENT 1 & 2 FOR BUSINESS ACCOUNTING BBCF 131 UNIVERSITY OF PETROLEUM & ENERGY STUDIES Assignment-1 Note: All

More information

$101,114 $40,915 = 2.47

$101,114 $40,915 = 2.47 SOLUTION (concluded) 4. Working Capital = $101,114 $40,915 = $60,199 Current Ratio = $101,114 $40,915 = 2.47 DISCUSSION QUESTIONS Suggested Responses 1. Current assets are listed in the order of their

More information

Review of the Accounting Process THE BASIC MODEL

Review of the Accounting Process THE BASIC MODEL THE BASIC MODEL The accounting information system is designed to collect and organize data into information that is useful for stakeholders. The Accounting Equation The basic accounting equation is what

More information

Assessment Schedule 2013 Accounting: Prepare financial information for an entity that operates accounting subsystems (91176)

Assessment Schedule 2013 Accounting: Prepare financial information for an entity that operates accounting subsystems (91176) NCEA Level 2 Accounting (91176) 2013 Page 1 of 7 Assessment Schedule 2013 Accounting: Prepare financial information for an entity that operates accounting subsystems (91176) Evidence Part A Question One

More information

COMPONENTS OF THE STATEMENT OF CASH FLOWS

COMPONENTS OF THE STATEMENT OF CASH FLOWS ILLUSTRATION 24-1 OPERATING, INVESTING, AND FINANCING ACTIVITIES COMPONENTS OF THE STATEMENT OF CASH FLOWS CASH FLOWS FROM OPERATING ACTIVITIES + Sales and Service Revenue Received Cost of Sales Paid Selling

More information

SOLUTIONS. Learning Goal 15

SOLUTIONS. Learning Goal 15 Learning Goal 15: Prepare a Classified S1 Learning Goal 15 Multiple Choice 1. b 2. c 3. a 4. b 5. d 6. a 7. c Their importance in paying current liabilities is the main reason current assets are shown

More information

CHAPTER 3: PREPARING FINANCIAL STATEMENTS

CHAPTER 3: PREPARING FINANCIAL STATEMENTS CHAPTER 3: PREPARING FINANCIAL STATEMENTS I. TIMING AND REPORTING A. The Accounting Period Time period assumption an organization s activities can be divided into specific time periods. Examples: a month,

More information

appendix C Periodic Inventory Systems for Merchandising Businesses Merchandise Transactions in a Periodic Inventory System

appendix C Periodic Inventory Systems for Merchandising Businesses Merchandise Transactions in a Periodic Inventory System 66124_appC_C1-C14.qxd 11/10/03 7:45 PM Page C-1 appendix C Periodic Inventory Systems for Merchandising Businesses In this text, we emphasize the perpetual inventory system of accounting for purchases

More information

NCEA Level 2 Accounting (91176) 2012 page 1 of 8. Sales 990 000 P. Cost of goods sold 586 000 P. Gross profit 404 000 S* Rent (received) 24 000 V

NCEA Level 2 Accounting (91176) 2012 page 1 of 8. Sales 990 000 P. Cost of goods sold 586 000 P. Gross profit 404 000 S* Rent (received) 24 000 V Assessment Schedule 2012 NCEA Level 2 Accounting (91176) 2012 page 1 of 8 Accounting: Prepare financial information for an entity that operates accounting subsystems (91176) Evidence Statement Question

More information

FINANCIAL STATEMENTS-II

FINANCIAL STATEMENTS-II MODULE - 3 15 FINANCIAL STATEMENTS-II You have learnt that Income Statement i.e. Trading & Profit and Loss Account and Position Statement i.e., Balance Sheet are two financial statements, which are prepared

More information

THE ACCOUNTING INFORMATION SYSTEM

THE ACCOUNTING INFORMATION SYSTEM CHAPTER 3 THE ACCOUNTING INFORMATION SYSTEM OVERVIEW Accounting information must be accumulated and summarized before it can be communicated and analysed. In this chapter, we will discuss the steps involved

More information

SOLUTIONS. Learning Goal 5

SOLUTIONS. Learning Goal 5 Learning Goal 5: Prepare Adjusting Entries for s S1 Learning Goal 5 Multiple Choice 1. b To record the supplies used up. 2. d To record the amount of revenue earned as time passes. 3. d 4. d Debit an expense,

More information

PART 5. External Reporting and Performance Evaluation. Statements of financial performance and position. Statement of cash flows 19

PART 5. External Reporting and Performance Evaluation. Statements of financial performance and position. Statement of cash flows 19 PART 5 External Reporting and Performance Evaluation Statements of financial performance and position 18 Statement of cash flows 19 Analysis and interpretation of financial statements 20 CHAPTER 18 Statements

More information

The Work Sheet and the Closing Process

The Work Sheet and the Closing Process C H A P T E R 4 The Work Sheet and the Closing Process A systematic approach is essential for efficient and accurate processing of large amounts of information. Whether work sheets are on paper or computerized,

More information

Chapter 4. Completing the accounting cycle. Appendix 4A: Reversing entries

Chapter 4. Completing the accounting cycle. Appendix 4A: Reversing entries 1 Chapter 4 Completing the accounting cycle Appendix 4A: Reversing entries 2 Learning objective 1. Prepare reversing entries and describe their purpose 3 Reversing entries Reversing entries are optional

More information

The Nature of Accounting Systems

The Nature of Accounting Systems Basic Accounting & Budgeting February 4, 2009 The Nature of Accounting Systems Accounting is the process of recording, classifying, summarizing, reporting and interpreting information about the economic

More information

Course pack Accounting 202 Chapter 13: Cash Flow Statement

Course pack Accounting 202 Chapter 13: Cash Flow Statement Course pack Accounting 202 Chapter 13: Cash Flow Statement Value Chapter Included 13 Purpose of Cash Flow Understand Operating, Investing, Financing activities Prepare a Cash Flow Statement indirect only

More information

Assessment Schedule 2010 Accounting: Prepare financial statements and related accounting entries for sole proprietors (90224)

Assessment Schedule 2010 Accounting: Prepare financial statements and related accounting entries for sole proprietors (90224) NCEA Level 2 Accounting (90224) 2010 page 1 of 7 Assessment Schedule 2010 Accounting: Prepare financial statements and related accounting entries for sole proprietors (90224) Evidence Statement ONE Part

More information

Gold Run Snowmobile. Adjusting Entries and Closing Entries For The Quarter Ended December 31. Final Project Evaluation. 5 th Edition.

Gold Run Snowmobile. Adjusting Entries and Closing Entries For The Quarter Ended December 31. Final Project Evaluation. 5 th Edition. Gold Run Snowmobile 5 th Edition Adjusting Entries and Closing Entries For The Quarter Ended December 31 and the Final Project Evaluation Page 1 ADJUSTING ENTRIES FOR THE QUARTER Using a copy of the December

More information

CHAPTER 3 Solutions MEASURING BUSINESS INCOME

CHAPTER 3 Solutions MEASURING BUSINESS INCOME CHAPTER 3 Solutions MEASURING BUSINESS INCOME Chapter 3, SE 1. 1. 2. 3. 4. c b d a Chapter 3, SE 2. Dec. 31 Insurance Expense 800 Prepaid Insurance To record insurance expired during the year $460 + $1,040

More information

Foreign Exchange Translation Service

Foreign Exchange Translation Service Name: Audit Report September 1-14 Foreign Exchange Translation Service 1. Number of debits made to 2. Number of credits made to 3. Number of debits made to IVIiscellaneous Expense 4. Total debit or credit

More information

Student Solutions Manual to Accompany. Introduction to Financial Accounting. David Annand. Based on International Financial Reporting Standards

Student Solutions Manual to Accompany. Introduction to Financial Accounting. David Annand. Based on International Financial Reporting Standards Student Solutions Manual to Accompany Introduction to Financial Accounting Based on International Financial Reporting Standards David Annand Copyright 2014 David Annand Published by David Annand 4910C

More information

The Adjusting Process

The Adjusting Process Chapter 03.qxd 5/21/08 7:07 PM Page 99 C H A P T E R 3 AP Photo/Jeff Kravitz Fo r Sa le The Adjusting Process M A R V E L D E N T E R T A I N M E N T, N ot o you subscribe to any magazines? Most of us

More information

a. $ 65,000. b. $ 80,000. c. $130,000. d. $145,000.

a. $ 65,000. b. $ 80,000. c. $130,000. d. $145,000. 注 意 1. 本 試 題 卷 共 50 題, 總 分 100 分 第 01-15 題, 每 題 1.75 分, 合 計 26.25 分 ; 第 16-35 題, 每 題 2 分, 合 計 40 分 ; 第 36-50 題, 每 題 2.25 分, 合 計 33.75 答 錯 不 倒 扣 2. 請 將 答 案 按 試 題 題 號, 依 序 填 入 答 案 卡 1.FastForward had cash

More information

Equipment Lease With a Service Component

Equipment Lease With a Service Component Equipment Lease With a Service Component **Disclaimer The exposure draft received nearly 700 letters of comment through the comment period ended December 15, 2010. There is some expectation that key features

More information

ACCOUNTING COMPETENCY EXAM SAMPLE EXAM. 2. The financial statement or statements that pertain to a stated period of time is (are) the:

ACCOUNTING COMPETENCY EXAM SAMPLE EXAM. 2. The financial statement or statements that pertain to a stated period of time is (are) the: ACCOUNTING COMPETENCY EXAM SAMPLE EXAM 1. The accounting process does not include: a. interpreting d. observing b. reporting e. classifying c. purchasing 2. The financial statement or statements that pertain

More information

Statement of Cash Flows

Statement of Cash Flows HOSP 2110 (Management Acct) Learning Centre Statement of Cash Flows The Statement of Cash Flows (or cash flow statement) is one of the main financial statements used by investors. It shows the cash generated

More information

Accounting 1 Semester 1 Final Exam Review Practice

Accounting 1 Semester 1 Final Exam Review Practice Accounting 1 Semester 1 Final Exam Review Practice True/False Indicate whether the sentence or statement is true or false. 1. Accounting is the language of business. 2. The relationship among assets, liabilities,

More information

The Double-Entry System EFFECTS OF TRANSACTIONS ON THE BALANCE SHEET. Initial Paid-in Capital. An Example Entity. Transaction 2.

The Double-Entry System EFFECTS OF TRANSACTIONS ON THE BALANCE SHEET. Initial Paid-in Capital. An Example Entity. Transaction 2. The Double-Entry System EFFECTS OF TRANSACTIONS ON THE BALANCE SHEET 2001 Richard S. Barr Transaction: Any event that affects the entity's financial position and requires recording Every accounting transaction

More information

Accounting Skills Assessment Practice Exam Page 1 of 10

Accounting Skills Assessment Practice Exam Page 1 of 10 NAU ACCOUNTING SKILLS ASSESSMENT PRACTICE EXAM & KEY 1. A company received cash and issued common stock. What was the effect on the accounting equation? Assets Liabilities Stockholders Equity A. + NE +

More information

ACCOUNTING: TOOLS FOR BUSINESS DECISION MAKING, FIFTH EDITION

ACCOUNTING: TOOLS FOR BUSINESS DECISION MAKING, FIFTH EDITION CHECKLIST OF KEY FIGURES For Exercises and Problems in Kimmel, Weygandt, Kieso FINANCIAL ACCOUNTING: TOOLS FOR BUSINESS DECISION MAKING, FIFTH EDITION Chapter 1 1-4 Net income $8,400. 1-5 Net income $4,576.1.

More information

UNIVERSITY OF WATERLOO School of Accounting and Finance

UNIVERSITY OF WATERLOO School of Accounting and Finance UNIVERSITY OF WATERLOO School of Accounting and Finance AFM 101 Professor Duane Kennedy Mid-Term Examination Fall 2008 Date and Time: October 16, 2008, 7:15 8:45pm Pages: 16, including cover Name: Student

More information

Questions and Answers

Questions and Answers Questions and Answers 1. List and describe the major steps in the accounting cycle. 2. In accounting, debit and credit have specific meanings. What are they? 3. You overheard one of your friends telling

More information

The Accounting Process

The Accounting Process GAAP LITERATURE The Accounting Process Chapter 3 TRADITIONAL: Original pronouncements, issued by the FASB. SEPT. 2009 CHANGE: Codification issued by the FASB. DIFFERENCE: Codification is listed by topic

More information

Chapter 13 Financial Statements and Closing Procedures

Chapter 13 Financial Statements and Closing Procedures Chapter 13 - Financial Statements and Closing Procedures Chapter 13 Financial Statements and Closing Procedures TEACHING OBJECTIVES 13-1) Prepare a classified income statement from the worksheet. 13-2)

More information

Bookkeeping Quiz = + For each account listed below, indicate whether it normally has a debit or a credit balance: III.

Bookkeeping Quiz = + For each account listed below, indicate whether it normally has a debit or a credit balance: III. ookkeeping Quiz I. Match the account titles with the appropriate financial statement classification: A Current Assets Sales Property, Plant and Equipment Cash in Checking C Other Assets Accumulated Depreciation

More information

Periodicity Assumption... Time Period Assumption... Chapter 4 Accrual Accounting Concepts

Periodicity Assumption... Time Period Assumption... Chapter 4 Accrual Accounting Concepts Financial Accounting: Tools for Business Decision Making, 4th Ed. CHAPTER 4 Kimmel, Weygandt, Kieso Chapter 4 Accrual Accounting Concepts KEY THINGS WE LL DO: Refresh and expand Ch.3 concepts. Differentiate

More information

Chapter 6: Closing Entries and the Postclosing Trial Balance

Chapter 6: Closing Entries and the Postclosing Trial Balance Chapter 6: Closing Entries and the Postclosing Trial Chapter Opener: Thinking Critically Students should recognize that financial statements can be used to evaluate net profit or loss, return on investments,

More information

ACCRUAL ACCOUNTING CONCEPTS

ACCRUAL ACCOUNTING CONCEPTS CHAPTER 4 ACCRUAL ACCOUNTING CONCEPTS Summary of Learning Objectives SMH 1 Explain the revenue recognition principle and the 6 Describe the nature and purpose of the adjusted trial expense recognition

More information

Exam 1 chapters 1-4 Needles 10ed

Exam 1 chapters 1-4 Needles 10ed Exam 1 chapters 1-4 Needles 10ed Multiple Choice Identify the choice that best completes the statement or answers the question. 1. Which of the following is the most appropriate definition of accounting?

More information

ACS-1803 Introduction to Information Systems. Functional Area Systems. Lecture 4

ACS-1803 Introduction to Information Systems. Functional Area Systems. Lecture 4 ACS-1803 Introduction to Information Systems Instructor: David Tenjo Functional Area Systems Lecture 4 1 Overview Overview of Functional Areas in the organization Functional Area: Accounting Accounting

More information

CORPORATE ACCOUNTING EXERCISES (these exercises can be used as tests if teachers wish to assess elements of this topic separately)

CORPORATE ACCOUNTING EXERCISES (these exercises can be used as tests if teachers wish to assess elements of this topic separately) CORPORATE ACCOUNTING EXERCISES (these exercises can be used as tests if teachers wish to assess elements of this topic separately) 1 The Trial Balance of Samcat Holdings Ltd at the end of the last financial

More information