Financial Statements
What is the financial statement that is represented by the accounting equation?
Balance Sheet
What is the balance of a temporary account at the beginning of the fiscal year?
$0
On September 12, 2023, Winslow Transportation paid $2,500 for supplies. What is the effect on the accounting equation (accounts and amounts)?
Cash: -$2,500; Supplies: $2,500
On December 1, 2023, Hats Fanatics Co. enters into an agreement with Sports Holding Co. to provide consulting services from January 1, 2024 - April 30, 2024 for $24,000. What is the effect on Hats Fanatics Co. accounting equation (accounts and amounts) on December 31, 2023?
N/A
Under what category of the accounting equation does unearned revenue belong?
Liabilities
Jerome Company purchased a new building to use in their business operations. What type of account should the building be classified as?
Asset
What does pressure, rationalization, and opportunity comprise?
Fraud Triangle
Cottonwood Co. buys land in 2019 for $100,000 which was appraised at that time for $110,000. The original cost to the previous owners was $80,000. It is now December 31, 2023 and the land’s current appraised value is $125,000. What is the dollar amount that land is recorded at in Cottonwood’s December 31, 2023 financial accounting records?
$100,000
On September 9, 2023, Winslow Transportation performed services of $5,000 for a customer “on account”. On September 16, 2023, Winslow Transportation collected the $5,000 from the customer “on account. What is the effect on the accounting equation (accounts and amounts) on September 16, 2023?
Cash: $5,000; A/R - $5,000
On October 25, Mario Brothers Plumbing prepaid for 9 months of medical insurance (for November 1 through the following July 31). The 9 months of insurance costs $13,500 and Mario Brothers paid cash. On December 31, after all adjusting entries have been recorded, what is the balance in the Prepaid Insurance account?
$10,500
[$13,500/9 x 7 = $10,500] OR [$13,500 - ($13,500/9 x 2)]
What financial statement do dividends appear on?
Statement of Changes in Stockholders' Equity
Winkelman Co. had revenues of $600, supplies expense of $150, dividends of $100, and wages expense of $200 for the year ended. What is net income?
$250
[$600 - $150 - $200 = $250]
On August 1, 2023, Tires-R-Us issued stock for $20,000. What is the effect on the accounting equation (accounts and amounts)?
Cash: $20,000; Common Stock: $20,000
Tike and Trikes Co. has annual property taxes of $36,000. On December 31, 2023 they need to record the adjusting entry for property taxes from August through December) that will be paid in January. What is the effect on the accounting equation (accounts and amounts) on December 31?
Property Taxes Payable: $15,000; Retained Earnings: -$15,000
[$36,000/12 x 5 = $15,000]
Gilbert Gliders started business on June 1, 2023. At that time, the company purchased $5,000 of supplies for cash. At the end of June, the supplies were counted and totaled $3,500. What is the effect on the accounting equation (accounts and amounts) for the adjusting entry on June 30?
Supplies: -$1500; Retained Earnings: -$1500
$5,000 - x = $3,500
What statement does the Statement of Cash Flows agree to?
Balance Sheet
Fredonia Legal Services has the following at the end of 2023: Common Stock $2,500, Inventory $1,000, Retained Earnings $4,000, Accounts Payable $5,000, Accounts Receivable $2,000. What is the ending cash balance?
$8,500
[$2,500 + $4,000 + $5,000 - $2,000 - $1,000]
Tombstone Co. is a company that sells art to other local businesses. A customer came in to Tombstone and purchased art on May 30, “on account”. Tombstone sent the customer an invoice on June 5 and the customer paid for the art on July 10. Under accrual accounting, when should Tombstone recognize revenue from this sale?
May 30
What-A-Deal Corporation sells bikes. On April 15, they sold $50,000 worth of bikes to their favorite customer for $10,000 cash and the remainder on account. What is the effect on the accounting equation (accounts and amounts)?
Cash:$10,000; A/R:$40,000; Retained Earnings:$50,000
On September 22, 2023, Winslow Transportation prepaid $3,000 for insurance coverage that starts October 1, 2023 and ends March 31, 2024. What is the effect (accounts and amounts) on the accounting equation for the adjusting entry on October 31?
Prepaid Insurance: -$500; Retained Earnings: -$500
[$3,000/6 x 1 = $500]
What section of the statement of cash flows would a loan from a bank be under?
Cash Flows from Financing Activities
Snowflake Shave Ice (SSI) makes ice sculptures for various catering events and parties. SSI started March with $100,000 of assets. During March, SSI completed the following transactions:
1) Borrowed $10,000 cash from the bank
2) Received $2,000 in advance for an April catering event
3) Prepaid $5,000 for insurance coverage covering April through September
As a result of these transactions, what are SSI's total assets at the end of March?
$112,000
[$100,000 + $10,000 (cash) + $2,000 (cash) - $5,000 (cash) + $5,000 (prepaid insurance)]
Goodyear, Inc. has accounts receivable of $60,000 at January 1, 2023 and $72,000 at December 31, 2023. During 2023, the company collected $750,000 of cash from customers for collections of accounts receivable. What amount of sales “on account” did Goodyear have in 2023?
$762,000
[$60,000 + Sales on Account - $750,000 = $72,000]
[Sales on Account = $72,000 + $750,000 - $60,000]
Gilbert Gliders employs workers who earn wages totaling $4,500 per five-day work week. The employees worked from Monday, October 30, 2023, through Friday, November 3, 2023, and were paid $4,500 on Saturday, November 4. What adjusting journal entry is necessary at October 31?
Wages Payable: $1,800; Retained Earnings: -$1,800
[$4,500/5 x 2 = $1,800]
In August, Toledo Theater Company collected $600,000 for season ticket packages for its 12 plays. Of the 12 plays, 3 are in September, 4 in October, 3 in November and 2 in December. What is the ending balance of the unearned revenue account at October 31 (after all adjusting entries)?
$250,000
[$600,000/12 x 5 = $250,000] OR [$600,000 - ($600,000/12 x 7) = $250,000]