an increase in liabilities and a decrease in owner's equity
A business receives its bill for utilities for the current month that it plans to pay next month. This transaction causes
decrease assets and decrease liabilities
The payment of an account payable would
The financial statement that presents a summary of the assets, liabilities, and owner's equity as of a specific date is the
Earning revenue on account
increase owner's equity and have no effect on liabilities
Receiving cash for services performed would
Refer to Table 1. Total liabilities at December 31, 20X5 were
Assets - Liabilities = Owner's Equity
The accounting equation can be stated as
the business entity is considered a separate entity apart from the owner or owners
The business entity concept means that
Determine cash withdrawals for the period if net income is $34,000, beginning owner's equity is $29,000, and ending owner's equity is $55,000.
current market value
The relevant measure of value of the assets of a company that is going out of business is their
debit to the owner's withdrawals account
The withdrawal of cash by the owner for personal use would include a
The account credited when cash is received from a customer on account is
have no effect on total assets or owner's equity
Receiving a payment from a customer on account would
the left side of an account
Debit is a term representing
cash to be overstated
Recording service revenue on account as a cash transaction will cause
debit to cash and a credit to accounts receivable for $1,200
Receiving a check for $1,200 from a customer with an account balance of $2,000 would include a
Accounts Payable 300
The entry to record the return of $300 of supplies purchased on account would be
The account debited when payment is made for equipment purchased previously on account is
All of the following are liabilities except
cash to be understated by $800
$300 receipt of cash on account was recorded as a $500 debit to accounts payable and a $500 credit to cash. This error will cause
At the end of the fiscal period, Burton Company omitted the adjusting entry for depreciation on equipment. The effect of this error on the financial statements is to
before the cash is paid or received
Accruals involve the recording of an expense or a revenue account
debit to salary expense for $20,000
A business pays weekly salaries on Friday of $25,000 for a five-day week ending on Friday. Assuming the fiscal period ends on a Thursday, the adjusting entry for accrued salaries would involve a
revenue decreases and owner's equity decreases
When an unearned revenue is initially recorded as a revenue, the adjusting entry has the following effect on the financial statements
debit to service revenue for $3,750
On April 1 of the current year, Jamie Company received $15,000 for services to be performed evenly over the next 12 months. Jamie Company initially recorded the $15,000 as service revenue. The adjusting entry on December 31 of the current year will includ
Net income is reported on the income statement at $80,000. Adjusting entries for accrued revenues of $6,000 and deferred revenue earned during the current period of $2,500 were accidentally omitted. The correct net income is
an asset on the balance sheet
The balance in prepaid rent after adjustment represents
When a prepaid expense is initially recorded as an expense, the adjusting entry has the following effect on net income
a liability on the balance sheet
The balance in unearned revenue after adjustment represents
An accountant records a transaction when cash is paid or received under which basis of accounting?
When creating a financial statement in order of reverse liquidity, which type of asset is listed first?
Which of the following is the time span during which cash is paid for goods and services, which are then sold to customers from whom the business collects cash?
The _______ is the total liabilities divided by total assets. This ratio reveals the proportion of a company's assets that it has financed with debt
Which columns of the worksheet show net income?
a multicolumn document used by accountants to aid in the preparation of the financial statements
A work sheet is a
Assets and liabilities are listed on the balance sheet in order of their:
Revenues total $10,200, expenses total $7,300, and the owner's withdrawals account has a balance of $2,600. What is the balance in the income summary account prior to closing net income or net loss?
Which of the following are the special journal entries that ease the burden of accounting for transactions in the next period?
Total debits exceed total credits
Which situation indicates a net loss on the income statement?
Which of the following accounts are not closed to the owner's capital account?
LIFO is not allowed under IFRS, but it can be used under other reporting methods
How is accounting for merchandise operations under international financial reporting standards significantly different from when a company follows accounting standards for private enterprises?
sales returns and allowances
Which of the following accounts should be closed to income summary?
Multi-step income statement
An income statement that contains subtotals to highlight significant relationships. In addition to net income, it reports gross profit and operating income
owner's capital account
The income summary account has a $25,000 debit balance after closing the revenue and expense accounts. This balance is closed to the
rapidly inventory is sold
Inventory turnover indicates how
debit to inventory
Using a perpetual inventory system, the entry to record the purchase of merchandise on account involves a
The income summary account has a $25,000 credit balance after closing the revenue and expense accounts. This balance represents
debit to inventory for $400
The inventory account shows an ending balance of $20,800. An actual count of inventory reveals $21,200 of inventory on hand. The adjusting entry involves
cost of goods sold divided by average inventory
Inventory turnover is calculated as
sales discounts, sales returns and allowances and cost of goods sold
Under a perpetual inventory system, which accounts would be closed to income summary with credits?