21stE

TEST 1A (Concluded)

9th Edition

Financial and Managerial AccountingWarren/Reeve

Chapter Test 1A

A

PROBLEMSANALYSISOFTRANSACTIONS

INSTRUCTIONS: Indicate the effect of each of the following transactions for the current month on assets, liabilities, and owners equity by inserting + for increase and for decrease in the appropriate columns at the right.

Answers

ALOE

0.Received cash from owner as original investment

++0. ____

1.Received cash for services provided (sold)

1. ____

2.Purchased equipment for cash

2. ____

3.Paid utilities for month

3. ____

4.Paid creditors on account

4. ____

5.Received cash for service sold to cash customers

5. ____

6.Purchased land by signing a nine-month, non-interest-bearing note payable

6. ____

7.Charged customers for service sold on account

7. ____

8.Paid miscellaneous expenses

8. ____

9.Paid first installment due on the non-interest-bearing note payable

9. ____

10.Purchased office supplies on account

10. ____

11.Paid cash to owner on withdrawal

11. ____

12.Recorded cost of supplies used during the month

12. ____

FILL-IN-THE-BLANKPRINCIPLESANDTERMINOLOGY

INSTRUCTIONS: Answer the following questions or complete the statements by writing the appropriate words or amounts in the Answers column.

Answers

0.A business entity owned by two or more individuals is referred to as a

partnership0. ____

1.A business that changes basic inputs into products is referred to as a

1. ____

2.The least common form of business entity is a

2. ____

3.If revenues exceed expenses, the difference is called

3. ____

4.The resources owned by a business are called

4. ____

continued

Answers

5.The owner of equity in a partnership is called (n)

5. ____

6.The authoritative body that currently has primary responsibility forthe development of GAAP is

6. ____

7.The excess of expenses over revenues is referred to as

7. ____

8.Amounts owed by a business to others are referred to as

8. ____

9.Resources consumed or services used in the process of earningrevenue are called

9. ____

10.Land was offered for sale at $75,000. If you paid $65,000 for the land,the amount that you would record for the purchase of the land in theaccounting records is

$

10. ____

11.Insurance premiums paid in advance are considered to be assets and are called

11. ____

12.Assets are financed by two sources:(1) owners equity and (2)

12. ____

13.The liabilities that result from purchases on account are referred to as

13. ____

14.If operations for an accounting period resulted in fees for cash of $15,000 and fees on account for $40,000, the amount of revenue for the period was

$

14. ____

15.If operations for an accounting period resulted in fees for cash of $19,000, fees on account of $7,000, and expenses paid in cashof $50,000, did the business incur a net income or a net loss forthe period?

15. ____

16.What was the amount of net income or net loss indicated in Question 15?$16. ____

17.A statement detailing the change in cash during a period of time is a

17. ____

18.Principles that guide the conduct of businesses are referred to as

18. ____

19.In the accounting equation, liabilities plus owners equity equals

19. ____

20.The form of the balance sheet with the liability and owners equitysections presented next to the assets section is called

20. ____

21.If liabilities are $75,000 and owners equity is $35,000, the amount ofthe assets is

$

21. ____

22.If assets are $190,000 and owners equity is $50,000, the amountof the liabilities is

$

22. ____

23.If total assets increased by $30,000 and liabilities increased by $20,000 during the period, the amount and direction (increase or decrease) of the periods change in owners equity was

$

23. ____

24.The owners equity at the beginning of the period was $45,000; at the end of the period, assets were $140,000 and liabilities were $71,000. If the owner made no additional investments or withdrawals during the period, did the business incur a net income or a net loss for the period?

24. ____

25.What was the amount of net income or net loss indicated in Question 24?$25. ____

26.If assets are $110,000 and owners equity is $37,000, the amountof liabilities is

$

26. ____

NOTE: No credit is given for a partially correct answer.

ACHIEVEMENTTESTSOLUTIONSCHAPTER1

TEST1A

Problems

ALOE

1.+

+

2.+,

3.

4.

5.+

+

6.++

7.+

+

8.

9.

10.++

11.

12.

Fill-in-the-Blank

1.manufacturing business

2.partnership

3.net income

4.assets

5.partner

6.Financial Accounting Standards Board (FASB)

7.net loss

8.liabilities

9.expenses

10.$65,000

11.prepaid expenses

12.liabilities

13.accounts payable

14.$55,000

15.net loss

16.$24,000

17.cash flows statement

18.ethics

19.assets

20.account form

21.$110,000

22.$140,000

23.$10,000 increase

24.net income

25.$24,000

26.$73,000

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