Questions On Accounting

Submitted By zinemerald
Words: 1087
Pages: 5

Linh D. Phan

Exercise 1-5:

1 + E : Specific accounting principle - Usually created by a pronouncement an authoritative body.
2 + G: Going-concern assumption - Financial statements reflect the assumption that the business continues operating.
3 + A: General accounting principle - Derived from long-used and generally accepted accounting practices.
4 + C: Business entity assumption - Every business is accounted for separately from its owner or owners.
5 + D: Revenue recognition principle - Revenue is recorded only when the earnings process is complete.
6 + B: Cost principle - Information is based on actual costs incurred in transactions.
7 + F: Matching principle - A company records the expenses incurred to generate the revenues reported.
8 + H: Full disclosure principle - A company reports details behind financial statements that would impact user’s decisions.

Exercise 1-9:

Assets = Liabilities + Equity
(a) $ 65,000
$ 20,000
$ 45,000
(b) $ 100,000
$ 34,000
$ 66,000
( c) $ 154,000
$ 114,000
$ 40,000

Exercise 1-14:
Real Answers
Income statement
For month ended October 31
Revenues

Receivable
$ 14,000
Expenses

Rent expense 3,550
Salaries expense 7,000
Telephone expense 760
Miscellaneous expenses 580
Total expenses
11,890
Net income
$ 2,110

Prob. 1-4A:
Amity Company
Balance Sheet
December 31, 2013
Assets
90,000
Liabilities
44,000

Equity
46,000
Total assets
$ 90,000
Total liabilities and equity
$ 90,000

Exercise 2-9:
Cash

(a) 100,750
(b) 1,250

(d) 15,500
(e) 10,050

(h) 1,125
(g) 1,225

(i) 10,000

Balance 94,850

Account Payable
Account Receivable
(e) 10,050
(c) 10,050
(f) 2,700
(h) 1,125

Balance 0
Balance 1,575

K.Spade, Capital
K.Spade, Withdrawals

(a) 100,750
(i) 10,000

Balance 100,750
Balance 10,000

Office Supplies
Office Equipment
(b) 1,250

(c) 10,050

Balance 1,250

Balance 10,050

Fee Earned
Rent Expense

(d) 15,500
(g) 1,225

(f) 2,700
Balance 1,225

Balance 18,200

Exercise 2-11:
a. No entry
b. Account receive 2,300
Service revenue 2,300
c. Cash 875
Service Revenue 875
d. No entry
e. No entry
f. No entry

Exercise 2-13:
Help Today
Income Statement
For month ended August 31
Revenues
27,000
Expenses

Rent expense
9,550
Salaries expense
5,600
Telephone expense
860
Miscellaneous expenses
520
Total expenses
16,530
Net income
$ 10,470

Exercise 2-15:
Help Today
Balance Sheet
August 31
Assets
Liabilities
Cash
25,360
Account Payable 10,500
Account Receivable 22,360

Office Supplies 5,250
Equity
Land 44,000
C. Camry, Capital
106,470
Office Equipment 20,000

Total assets
116,970
Total liabilities and equity
116,970

Problem 2-2A:
General Journal
Date
Account Titles and Explanation
PR
Debit
Credit
Mar. 1
Cash
101
150,000

Office Equipment
163
22,000

D. Brooks, Capital
301

172,000

Owner invested cash and equipment

Mar. 2
Prepaid Rent
131
6,000

Cash
101

6,000

Prepaid six month’s rent

Mar. 3
Office Equipment
163
3,000

Office Supplies
124
1,200

Accounts Payable
201

4,200

Purchased equipment and supplies on credit

Mar. 6
Cash
101 4,000

Services Revenue
403

4,000

Received cash for services

Mar. 9
Accounts Receivable
106
7,500

Services Revenue
403

7,500

Billed client for completed work

Mar. 12
Accounts Payable
201
4,200

Cash
101

4,200

Paid balance due on account

Mar. 19
Prepaid Insurance
128
5,000

Cash
101

5,000

Paid premium for insurance

Mar. 22
Cash
101 3,500

Accounts Receivable
106

3,500

Collected part of amount owed by client

Mar. 25
Accounts Receivable
106
3,820

Services Revenue
403

3,820

Billed client for completed work

Mar. 29
D. Brooks, Withdrawals
302
5,100

Cash
101

5,100

Owner withdrew cash for personal use

Mar. 30
Office Supplies
124