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Exam 2: The Balance Sheet

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Question 51

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A company signed an agreement to rent store space from another company.This is an example of a recordable transaction.

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Question 52

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When accounts receivable are collected:

A) Stockholders' equity increases.
B) Total assets increase.
C) Total assets decrease.
D) The amount of total assets is unchanged.

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Question 53

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A company issues $20 million in new stock.The company later uses this money to acquire a building.What is the resulting effect of these transactions on the accounts?

Which line items on the balance sheet would be classified as long term?

A long-term liability is one that the company:

CheapBooks Incorporated (CI)had the following business activities,for which you are to prepare journal entries.Reference each journal entry to the transaction number,shown below. 1.Stockholders invest $25,000 cash in the corporation. 2.CI purchased $400 of office supplies on credit. 3.CI purchased office equipment for $7,000,paying $2,500 in cash and signing a 30-day note payable for the remainder. 4.CI paid $200 cash on account for office supplies purchased in transaction 2. 5.CI purchased two acres of land for $10,000,signing a 2-year note payable. 6.CI sold one acre of land at one-half of the total cost of the two acres,receiving the full amount or $5,000 in cash. 7.CI made a payment of $5,000 on its 2-year note.

A debit may increase or decrease an account,depending on the type of account.

Which of the following describes the classification and normal balance of the retained earnings account?

For each of the following,indicate how the event would most likely be categorized. EE (external exchange) IE (internal event) NT (no transaction) ____ A company sells $2 million in goods for immediate payment. ____ The company uses up office supplies. ____ The stock market rises 10% and the value of a company's stock increases. ____ A company pays cash to an inventor for the legal rights to produce a new product. ____ Management promises to pay workers an overtime bonus as required by their union contract. ____ A company uses up supplies to manufacture a product. ____ A company receives $1 million in orders but no down payments.

Stockholders contribute $10,000 cash to a company.The company uses $5,000 to buy new equipment and $3,000 to pay off accounts payable.Show the effect of these transactions on the basic accounting equation.Then,show the journal entries that would be used to record the transactions.

Which of the following would be classified as a long-term liability on the balance sheet at December 31,2013?

The list of names and reference numbers that the company will use when accounting for transactions is called the Chart of Accounts.

The normal balance of any account is the

Cash had a beginning balance of $68,900.During the month,Cash was credited for $16,000 and debited for $18,300.At the end of the month,the balance is:

Conservatism means:

Which of the following is not true about liabilities?

Which of the following statements regarding the concepts underlying the balance sheet are true?

Accounts Payable

What is the amount of stockholders' equity at January 1,2014?

If the total dollar value of credits to an account exceeds the total dollar value of debits to that account,the ending balance of the account will be a debit balance.