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10 Cards in this Set

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If operations for an accounting period resulted in cash sales of $90,000, sales on account of $40,000, and expenses paid in cash of $135,000, the net income or (net loss) for the period is
___________.
($5,000)net loss
A list of assets, liabilities, and owner's equity as of a specific date, usually at the close of a month or a year, is called a(n)_________.
balance sheet
If total assets increased by $21,500 and owner's equity increased by $8,000 during a period, the amount and direction (increase or decrease) of the period's change in total liabilities was __________.
$13,500 increase
The owner's equity at the beginning of the period was $46,000; at the end of the period, assets were $99,000 and liabilities were $22,000. If the owner made an additional investment of $10,000 and withdrew $8,000 during the period, the net income or (net loss) for the period is ___________.
$94,000 increase
The accounting concept that requires economic data be recorded in dollars:

a) cost concept
b) objectivity concept
c) business entity concept
d) unit of measure concept
a)incorrect. The cost concept is the basis for entering the exchange price, or cost, into the accounting records.
b)incorrect. The objectivity concept requires that the accounting records and reports be based upon objective evidence.
c)incorrect. The business entity concept limits the economic data in the accounting system to data related directly to the activities of the business or entity.
d)Correct. The unit of measure concept requires that economic data be recorded in dollars.
If total liabilities increased by $20,000 during a period of time and owner's equity increased by $5,000 during the same period, the amount and direction (increase or decrease) of the period's change in total assets is:
a)$20,000 increase
b)$20,000 decrease
c)$25,000 decrease
d)$25,000 increase
d) If total liabilities increased by $20,000 during a period of time and owner's equity increased by $5,000 during the same period, total assets must increase by $25,000. That is, if the right side of the accounting equation increases by $25,000 (Liabilities + Owner's Equity), the left side of the equation must also increase by the same amount, $25,000.
If revenue was $70,000, expenses were $59,000, and the owner's withdrawals were $25,000, the amount of net income or net loss was:

a) net income of $11,000
b) net income of $36,000
c) net loss of $59,000
d) net income of $70,000
The amount of net income of $11,000 is determined by subtracting expenses, $59,000, from the revenues, $70,000. The owner's withdrawals, $25,000, do not affect the determination of net income.
Which of the following is not one of the major sections of the statment of cash flows?

a) cash flows from marketing activities
b) cash flows from investing activities
c) cash flows from financing activities
d) cash flows from operating activities
a) correct. The statement of cash flows does not contain a section for cash flows from marketing activities.
A business paid $6,000 to a creditor in payment of an amount owed. The effect of the transaction on the accounting equation was:
a) an increase in an asset and a decrease in another asset
b) a decrease in an asset and an increase in a liability
c) a decrease in an asset and a decrease in a liability
d) an increase in an asset and an increase in owner's equity
c. correct. The payment of a credit of $6,000 decreases the asset, Cash, and decreases the liability, Accounts Payable.
A summary of the cash receipts and cash payments for a specific period of time is called a(n)________
_____ _____ ______.
statement of cash flows