Financial Statements
Which financial statements would be appropriate with the date: "For the year ended December 31, 2020"
Income Statement and Statement of RE
ABC company has current assets equal to $4455 and current liabilities equal to $3452. What is the working capital?
$1003
What accounts have a normal balance of debit?
Assets, Expenses, and Dividends
Name 2 examples of current assets.
Cash, Accounts Receivable, Inventory, Supplies, .....
What are the 3 types of business organizations?
Sole Proprietorship, Partnership, and Corporation.
Which financial statement includes the accounting formula? (Assets= Liabilities + SE)
Balance Sheet
ABC company has current liabilities equal to $3,000, long-term liabilities equal to $20,000, and current assets equal to $30,000. What is the current ratio?
10
What accounts have a normal balance of credit?
Liabilities, Revenue, Retained Earnings, Common Stock
Name 2 examples of long-term assets.
ABC company paid $300 for supplies. Create a journal entry.
Supplies $300
Cash $300
Which statement would include revenue and expenses?
Income Statement
ABC company has total assets equal to $30,000 and total liabilities equal to $23,000. What is the Debt to Total Assets ratio?
.767
ABC company bought $3000 of land on account. Create the journal entry for the transaction.
Land $3000
Accounts Payable $3000
Name an example of current liabilities.
Accounts Payable, Short-term debt, Dividends payable,....
What is the normal balance for the revenue account?
Credit
When is revenue recognized?
When the performance obligation is satisfied
ABC company has current assets equal to $4,000, long-term assets equal to $30,000, and intangible assets equal to $2000. They also have total liabilities equal to $20,000. What is their Debt to Total Assets ratio?
.556
ABC company bought $400 worth of insurance in advance. Create a journal entry for the transaction.
Prepaid Insurance $400
Cash $400
Name 2 examples of long-term liabilties
Notes Payable, Loans Payable, Mortgage Payable,...
What is liquidity?
How quick you can turn your assets into cash
What is the Retained Earnings formula?
Beginning RE + Net Income - Dividends = Ending RE
Which is a better Debt to Total Assets Ratio? 1.30 or 0.50? Why?
0.50 is better because it shows that they can easily dissolve their debts. 1.30 shows that they have more liabilities than assets.
ABC company paid $900 worth of office rent for the past month. Create a journal entry for the transaction.
Rent Expense $900
Cash $900
Cash. Mortgage Payable. Retained Earnings. Revenue. Land. Expenses.
Cash= Current Asset. Mortgage Payable= Long-term Liability. RE= SE. Revenue= SE. Land= Long-term Asset. Expenses= SE.
What is the Accrual Basis
Revenue is recognized when performance obligation is satisfied.