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Exam 1: Introduction to Accounting and Business

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Question 21

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Which of the following is not an asset?

A) investments
B) cash
C) inventory
D) owner's equity

E) None of the above
F) A) and C)

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Question 22

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The following data were taken from Miller Company's balance sheet:​ (a)Compute the ratio of liabilities to owner's equity.Round your answer to one decimal place. (b)Has the creditors' risk increased or decreased from December 31,Year 1,to December 31,Year 2?

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Question 23

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The unit of measurement concept requires that economic data be recorded in dollars.

Owner's withdrawals

Given the following data:Compute the ratio of liabilities to owner's equity for each year.Round to two decimal places.

Darnell Company purchased $88,000 of computer equipment from Joseph Company.Darnell Company paid for the equipment using cash that had been obtained from the initial investment by Donnie Darnell.​Which entity or entities (Darnell Company,Joseph Company,and Donnie Darnell)should record the transaction involving the computer equipment on their accounting records?

Many countries outside the United States use financial accounting standards issued by the

Selected transaction data of a business for September are summarized below.Determine the following amounts for September: (a)total revenue, (b)total expenses, (c)net income.

How does paying a liability in cash affect the accounting equation?

Determine the missing amount designated with an "X" for each of the following:

Dave Ryan is the owner and operator of Ryan's Arcade.At the end of its accounting period,December 31,Ryan's Arcade has assets of $450,000 and liabilities of $125,000.Using the accounting equation,determine the following amounts:

Karen Meyer owns and operates Crystal Cleaning Company.Recently,Meyer withdrew $10,000 from Crystal Cleaning,and she contributed $6,000,in her name,to the American Red Cross.The contribution of the $6,000 should be recorded on the accounting records of which of the following entities?

The assets and liabilities of Rocky's Day Spa on December 31 and its revenue and expenses for the year are listed below.The capital of the owner is $68,000 on January 1.The owner invested an additional $10,000 during the year.​ Prepare a statement of owner's equity for the current year ended December 31.

A summary of cash flows for Evelyn's Event Planning for the year ended December 31 is shown below.​ ​ Prepare a statement of cash flows for Evelyn's Event Planning for the year ended December 31.

Indicate whether each of the following accounts represents an asset,liability,or owner's equity:

The objectivity concept requires that

Name and describe the four primary financial statements for a proprietorship.

Donner Company is selling a piece of land adjacent to its business premises.An appraisal reported the market value of the land to be $220,000.Focus Company initially offered to buy the land for $177,000.The companies settled on a purchase price of $212,000.On the same day,another piece of land on the same block sold for $232,000.Under the cost concept,at what amount should the land be recorded in the accounting records of Focus Company?

Receiving a bill or otherwise being notified that an amount is owed is not recorded until the amount is paid.

The business entity concept means that