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Exam 2: Reporting Investing and Financing Results on the Balance Sheet

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Question 41

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Partial list of account balances at the end of the year: -Use the information above to answer the following question.The amount of total current assets that will be reported on the company's balance sheet at the end of the year is:

A) $362,600.
B) $368,500.
C) $139,500.
D) $327,000.

E) B) and D)
F) A) and B)

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Question 42

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What is the effect on the balance sheet if a company purchases $100 of supplies using cash?

A) Total assets will remain the same.
B) Total assets will decrease.
C) Liabilities will decrease.
D) Total assets will increase.

E) A) and B)
F) B) and C)

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Question 43

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A current asset is one that the company:

A company receives $100,000 cash from investors in exchange for stock.Several weeks later,the company buys a $250,000 machine using all of the cash from the stock issue and signing a promissory note for the remainder.The accounts involved in these two transactions are:

-Use the information above to answer the following question.What is the amount of current liabilities on the classified balance sheet?

A transaction is an exchange or event that directly affects the assets,liabilities,or stockholders' equity of a company.

Which of the following sequences indicates the correct order of steps in the accounting cycle?

Daisy Company's trial balance was in balance at the end of the period and showed the following accounts: What is the balance of the credit column on Daisy Company's trial balance?

The following is a list of account balances for Pick-A-Pet,Inc.,as of June 30,Year 3: The company entered into the following transactions during July Year 3.Stockholders contribute $300,000 cash for additional ownership shares and the company pays $550,000 in cash and borrows $150,000 from a bank to buy new equipment.No other transactions took place during July,Year 3. Required: Part a.Prepare a classified balance sheet for the company at June 30,Year 3. Part b.Show the effects of the July transactions on the basic accounting equation. Part c.Prepare the journal entries that would be used to record the transactions.

Match the term with its definition.(There are more definitions than terms.) TERM _____ (1)Duality Of Effects _____ (2)Journal Entry _____ (3)Posting _____ (4)Debit _____ (5)Chart Of Accounts _____ (6)T-Account _____ (7)Credit _____ (8)Cost Principle DEFINTION A.A journal entry that lowers the balance of the account. B.When journal entries are recorded in the appropriate T-account. C.The concept that a company must keep separate accounts by time period. D.A simplified version of an account in the General Ledger. E.The mechanism used to record each transaction in the General Journal. F.When a company's balance sheet has been verified by an outside auditor. G.The concept that any transaction must have at least two effects on the accounting equation. H.When a dollar value is assigned to an item recorded in the accounting system. I.Compares balance sheet items from two different time periods. J.An amount that is posted on the left side of a T-account or ledger. K.The principle that a company should use the least optimistic measure,when uncertainty exists. L.Assets are initially recorded at the amount paid to acquire them. M.A journal entry that raises the balance of the account. N.A balance sheet where assets appear on the top,liabilities in the middle and stockholders' equity appears on the bottom. O.An amount that is posted on the right side of a T-account. P.A summary of account names and numbers.

Which of the following would be listed as a current liability?

Which of the following statements about the debit/credit framework is correct?

If a company uses $100 million of its cash to pay off debt,its stockholders' equity will increase $100 million.

Assets totaled $24,250 and liabilities totaled $8,500 at the beginning of the year.During the year, assets decreased by $3,500 and liabilities increased by $2,800. -Use the information above to answer the following question.What is the amount of stockholders' equity at the end of the year?

The Noble Corp.installs $15,000 of equipment,paying $5,000 cash and promising to pay the remaining $10,000 in 6 months.What is the impact to this transaction on the accounting equation?

-Use the information above to answer the following question.What is the amount of the current ratio (round to two decimal places) ?

Every transaction increases at least one account and decreases at least one account.

What will be the effect on the balance sheet of issuing shares of common stock in exchange for cash?

A company signed an agreement to rent store space from another company.This is an example of a transaction that should be recorded.

The current ratio: