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Stockholders’ equity will increase
D. Liabilities will decrease
3) Using accrual accounting, expenses are recorded and reported only:
When they are incurred whether or not cash is paid
When they are incurred and paid at the same time
If they are paid before they are incurred
If they are paid after they are incurred
4) Stockholders’ equity can be described as claims of
Creditors on total assets
Owners on total assets
Customers on total assets
Debtors on total assets
5) The Vintage Laundry Company purchases $6,500 worth of laundry supplies on June 2 and recorded the purchase as an asset. On June 30, an inventory of the laundry supplies indicated only $2,000 on hand. The adjusting entry that should be made by the company on June 30 is:
Debit Laundry Supplies Expense, $2,000; credit Laundry Supplies, $2,000
Debit Laundry Supplies, $4,500; credit Laundry Supplies Expense, $4,500
Debit Laundry Supplies $2,000; credit Laundry Supplies Expense, $2,000
Debit Laundry Supplies Expense, $4,500; credit Laundry Supplies, $4,500
6) Use the following data to determine the total dollar amount of assets to be classified as current assets.
Koonce Office Supplies
Balance Sheet
December 31, 2010
$580,000
$430,000
$360,000 …show more content…
Prepaid rent was debited for the full amount. If financial statements are prepared on July 31, the adjusting entry to be made by the fisher Shoe store is:
Debit Rent Expense, $15,000; credit Prepaid Rent, $2,500
Debit Prepaid Rent, $2,500; credit Rent Expense, $2,500
Debit Rent Expense, $2,500; credit Prepaid Rent, $2,500
Debit Rent Expense, $15,000; credit Prepaid Rent, $12,500
22) Using the following data to calculate the current ration.
Koonce Office Supplies
Balance Sheet
December 31, 2012
1.81:1
1.44:1
3.07:1
2.69:1
23) When a change in depreciation method occurs
Prior years’ financial statements should be changed to reflect the newly adopted method
The change should be reported in current and future years
The cumulative effect of the change should be reflected on the income statement as of the beginning of the next year
The cumulative effect of the change in accounting principle should be classified as an extraordinary item on the income
D. Liabilities will decrease
3) Using accrual accounting, expenses are recorded and reported only:
When they are incurred whether or not cash is paid
When they are incurred and paid at the same time
If they are paid before they are incurred
If they are paid after they are incurred
4) Stockholders’ equity can be described as claims of
Creditors on total assets
Owners on total assets
Customers on total assets
Debtors on total assets
5) The Vintage Laundry Company purchases $6,500 worth of laundry supplies on June 2 and recorded the purchase as an asset. On June 30, an inventory of the laundry supplies indicated only $2,000 on hand. The adjusting entry that should be made by the company on June 30 is:
Debit Laundry Supplies Expense, $2,000; credit Laundry Supplies, $2,000
Debit Laundry Supplies, $4,500; credit Laundry Supplies Expense, $4,500
Debit Laundry Supplies $2,000; credit Laundry Supplies Expense, $2,000
Debit Laundry Supplies Expense, $4,500; credit Laundry Supplies, $4,500
6) Use the following data to determine the total dollar amount of assets to be classified as current assets.
Koonce Office Supplies
Balance Sheet
December 31, 2010
$580,000
$430,000
$360,000 …show more content…
Prepaid rent was debited for the full amount. If financial statements are prepared on July 31, the adjusting entry to be made by the fisher Shoe store is:
Debit Rent Expense, $15,000; credit Prepaid Rent, $2,500
Debit Prepaid Rent, $2,500; credit Rent Expense, $2,500
Debit Rent Expense, $2,500; credit Prepaid Rent, $2,500
Debit Rent Expense, $15,000; credit Prepaid Rent, $12,500
22) Using the following data to calculate the current ration.
Koonce Office Supplies
Balance Sheet
December 31, 2012
1.81:1
1.44:1
3.07:1
2.69:1
23) When a change in depreciation method occurs
Prior years’ financial statements should be changed to reflect the newly adopted method
The change should be reported in current and future years
The cumulative effect of the change should be reflected on the income statement as of the beginning of the next year
The cumulative effect of the change in accounting principle should be classified as an extraordinary item on the income