VOCAB
What is the accounting equation?
Assets = Liabilities + Owners' Equity
If a company issues common stock, what impact will the transaction have for the current period?
A) Assets and OE increase
B) Assets and OE decrease
C) Assets increase, OE decrease
D) Assets decrease, OE increase
E) No impact on assets, liabilities, or OE
Asset and owners' equity will increase
If a company pays for inventory purchased in a prior period, what impact will the transaction have in the current period?
A) Assets and liabilities increase
B) Assets and liabilities decrease
C) Assets increase, liabilities decrease
D) Assets decrease, liabilities increase
E) No impact on assets, liabilities, and OE
Assets and liabilities will decrease
What is the matching concept?
Recording all expenses incurred in generating the revenues of a period
If a company pays for 12 months of rent for the following year, what impact will the transaction have on the current year.
A) Assets will increase
B) Assets will decrease
C) Assets and OE will increase
D) Assets and Liabilities will decrease
E) No impact on assets, liabilities, or OE
No impact on assets, liabilities, or owners' equity for the current year.
What will never be in a closing entry?
A) Wage expense
B) Retained Earnings
C) Cash
D) Rent expense
E) Cost of goods sold
Cash
A company had 10,000 shares of common stock outstanding on Jan. 1, 20X1. The company issued 4,000 shares on May 1, 20X1 and issued 2,000 more shares on Nov. 1, 20X1. If the company earned $50,000 Net Income, how much will EPS be?
$3.85
50,000 / 13,000 -> (10,000 x 4/12) + (14,000 x 6/12) + (16,000 x 2/12)