Flashcards in Chp 1 Graded Review Q's Deck (18)
The primary objective of financial accounting is to:
Provide accounting information that serves external users.
If a co. is considering the purchase of a parcel of land that was originally acquired by the seller for $85,000, is offered for sale at $150,000, assessed for tax purposes at $95,000, is recognized by the purchaser as easily being worth $140,000, and is purchased for $137,000 the land should be recorded in the purchaser's books at:
Revenue is properly recognized:
Upon completion of the sale of goods or when services have been performed and the business obtains the right to collect the sales price.
If a co. uses $1,300 of its cash to purchase supplies, the effect on the accounting equation would be:
One asset increases $1,300 and another asset decreases $1,300, causing no effect.
If assets are $300,000 and liabilities are $192,000, then equity equals:
On May 31st of the current year, the assets and liabilities of Riser, Inc. are as follows: Cash $20,500; Accounts Receivable, $7,250; Supplies, $650; Equipment, $12,000; Accounts Payable, $9,300. What is the amount of stockholders' equity as of May 31st of the current year?
Saddleback Co. paid off $30,000 of its accounts payable in cash. What would be the effector this transaction on the accounting equation?
Assets and Liabilities both decrease $30,000
If the liabilities of a co. increased $74,000 during a period of time and equity in the co. decreased $19,000 during the same period, what was the effect on the assets?
Assets would have increased $55,000
What is the equity if the asset is $250 and the liabilities are $50?
Equity = $200
Received cash from stockholders as an investment in the co...
-Increases Stockholders' Equity
Paid rent for the current month....
-Decreases Stockholders' Equity
Received cash for services...
-Increase Stockholders' Equity
Paid creditor on account for supplies bought and charged last month...
Received cash on account from a customer for services provided last month...
Paid a dividend...
-Decrease Stockholders' Equity
Purchased a truck on account...
If beginning earnings is $85,000, and ending retained earnings is $65,000, and the co. paid dividends of $15,000, the amount of net income or net loss is...
Net loss of $5,000