General Information
Generally Accepted Accounting Principles (GAAP)
Assets= $4,100 and Total Stockholders' Equity= $2,200
What are total liabilities?
$1,900
A company pays cash dividends of $6,700 to shareholders.
Dividends $6,700
Cash $6,700
A company received $8,000 for services to be provided in the future on 12/1. By the end of the month, they've provided $1,000 worth of those services.
What is the adjusting entry on 12/31?
Deferred Revenue $1,000
Service Revenue $1,000
Dividends are classified as what kind of activity?
Financing
The purpose of accounting is to...?
Measure and communicate
Expenses= $5,300; Assets= $7,800, Revenues=$9,100; Retained Earnings= $1,000; Dividends= $500
Calculate Net Income
$3,800
A company purchases supplies on account, worth $37,000.
Supplies $37,000
Accounts Payable $37,000
A company bought rent in advance on 9/30 for the year worth $30,000.
What is the adjusting entry on 12/31?
Rent Expense $7,500
Prepaid Rent $7,500
Southwest Airlines operates a flight from Cleveland to Dallas on March 13th. The pilots' salaries associated with the flight are paid on March 24th.
When does Southwest Airlines record the expense?
March 13th
What is the fundamental accounting equation?
Assets = Liabilities + Stockholders' Equity
What is the difference between current/long-term assets/liabilities and give an example of each.
Long-term assets/liabilities last longer than a year.
Short-term assets: Cash, A/R, Supplies, Inventory
Long-term assets: Land, equipment, long-term investment
Short-term liabilities: A/P, Interest Payable, Deferred Revenue
Long-term liabilities: Notes Payable (longer than a year)
A company borrows $200,000 from the local bank and signs a note promising to repay the full amount of the debt in three years
Cash $200,000
Notes Payable $200,000
A company bought a piece of equipment on 11/1 worth $150,000 that they have decided to depreciate $3,500 a month.
What is the adjusting entry on 12/31?
Depreciation Expense $7,000
Accumulated Depreciation $7,000
What are the 3 places/steps a transaction goes through and in what order?
What makes Retained Earnings go up/down?
Net income makes R/E go up
Dividends make R/E go down
What is accumulated depreciation classified as and where does it appear in the balance sheet?
Contra-asset; below equipment/land in the long-term asset section
A company pays one year of insurance in advance, $90,000 ($7,500 per
month)
Prepaid Insurance $90,000
Cash $90,000
A company had $2,000 worth of supplies on 12/1. They purchased $6,100 worth up supplies throughout the month. At the end of the month, they had total supplies worth $1,500.
What is the adjusting entry on 12/31?
Supplies Expense $6,600
Supplies $6,600
Beginning Retained Earnings was $100. Net income for the year was $5,400. Ending Retained Earnings $1,750. How much money was paid out in dividends?
$3,750
Label all of DEA LOR and what side goes up with a debit/credit
Dividends, expenses, assets go up with a debit
Liabilities, owners' equity, and revenues go up with a credit
Describe the connections/flow between the 3 financial statements starting with the Income Statement
The Income Statement calculates Net Income, which in turn makes Retained Earnings go up in the Statement of Stockholder Equity. Common Stock, Retained Earnings, and total Stockholders' Equity show up in the S/E part of the Balance Sheet
A company provides a service to customers on account, worth $15,000
Accounts Receivable $15,000
Service Revenue $15,000
A company signs a $60,000 note on 8/1 with a 7% interest rate.
What is the adjusting entry on 12/31?
Interest Expense $1,750
Interest Payable $1,750
Jennifer calls Smoky Mountain Hiking Company on June 2nd about taking a trip. On June 23rd, Smoky Mountain Hiking Company takes her and 4 of her friends on a hike. Each person pays $450 for the hike a week later on June 30th.
How much does Smoky Mountain Hiking Company record for service revenue on June 30th?
0