Homework Answers
1. False. A large cash balance cannot be taken as best evidence of previous profitable operations. However, a huge balance of Retained Earnings may indicate previous profitable operations.
2. False. Accounts receivable is not a liability. Accounts Receivable reflects the amount owed from customers for the goods sold. Hence, Accounts Receivable should be classified under Current Assets.
3. False. As per Cost principle, an asset should be recorded at its acquisition cost. Hence, Machinery is recorded at replacement cost.
4. True. Balance sheet represents the financial position of an organisation at a point of time. The changes in the condition of a business cannot be determined from balance sheet.
5. False. Balance sheet includes the stockholders' equity at a point of time and not over a period of time.
6. True. Stockholders' equity includes common stock, preferred stock, Retained earnings etc,. Hence, Retained earnings is just a part of stockholders' equity.
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alla CPUrug. Wy W WCU LULUPUU punt GENERAL EXERCISES AND PROBLEMS 15-29 True or False Use...
Requirement 1. Indicate whether each of the following statements is true or false. For each false...
Requirement 1. Indicate whether each of the following statements is true or false. For each false statement, explain why it is false. Use Tor F to indicate whether each of the following statements is true or false. Change each false statement into one that is true. 1. A large cash balance is the best evidence of previous profitable operations. 2. Accounts receivable should be classified as a liability. 3. Machinery used in the business should be recorded at replacement cost....
II. True/False Questions (2 points each, 20points) 1. Accounting is a system that collects and processes...
II. True/False Questions (2 points each, 20points) 1. Accounting is a system that collects and processes financial information about an organization and reports that information to decision makers. 2. In accounting and reporting for a business entity, the accounting and reporting for the business must be kept separate from other economic affairs of its owners. 3. The accounting period in which service revenue is recognized (i.e., revenue for services rendered) is generally the period in which the cash is collected....
15-6 True or False Study Appendix 15B. Use T or F to indicate whether each of...
15-6 True or False Study Appendix 15B. Use T or F to indicate whether each of the following statements is true or false. For each false statement, explain why it is false. 1. Purchase of inventory on account should be credited to Inventory and debited to Accounts Payable. 2. Increases in asset accounts must always be entered on the right. 3. Increases in stockholders' equity should always be entered as credits. 4. Decreases in liability accounts should be recorded on...
15-6 True or False Study Appendix 15B. Use T or F to indicate whether each of...
15-6 True or False Study Appendix 15B. Use T or F to indicate whether each of the following statements is true or false. For each false statement, explain why it is false. 1. Purchase of inventory on account should be credited to Inventory and debited to Accounts Payable. 2. Increases in asset accounts must always be entered on the right. 3. Increases in stockholders' equity should always be entered as credits. 4. Decreases in liability accounts should be recorded on...
Part 1: True or False (1.5 point each, 15 points total) Indicate whether the following statements...
Part 1: True or False (1.5 point each, 15 points total) Indicate whether the following statements are true (T) or false (F). 1. An income statement presents the revenues, expenses, gains, losses, and net income (or net loss) of the business for a period of time. 2. A debit to a liability account increases that account. 3. The purchase of equipment for cash has no effect on the amount of total assets. 4. Unearned revenue is an income statement account....
AGEC 3423 HW2 Spring 2020 1. True or false? Assets + Liabilities = Owner's Equity. Why?...
AGEC 3423 HW2 Spring 2020 1. True or false? Assets + Liabilities = Owner's Equity. Why? (1 pt) 2. True or false? If the debt/equity ratio increases, the debt/asset ratio will also increase Why? (3pts) 3. True or false? A business with a higher working capital will also have a higher current ratio. Why? (3pts) 4. Use your knowledge of balance sheets and ratio analysis to complete the following abbreviated balance sheet. The current ratio = 2.0, and the debt/equity...
True False 15 (10 @1.5) 1. Revenues, expense dividend are all increases with credit. 2. Dividends...
True False 15 (10 @1.5) 1. Revenues, expense dividend are all increases with credit. 2. Dividends are subtracted as expenses in the calculation of net income. 3. A balance sheet covers activities over a period of time such as a month or year. 4. A transaction that credits an asset account and credits a liability account must also affect one or more other accounts. 5. A general journal gives a complete record of each transaction in one place, and shows...
True or False 32) A transaction that causes an increase in an asset may also cause...
True or False
32) A transaction that causes an increase in an asset may also cause a decrease in another asset, an increase in a liability, or an increase in owners' equity. 33) Window dressing occurs when management attempts to make a company look financially stronger than it actually is. 34) The sale of additional shares of capital stock will cause retained earnings to increase 35) Every business transaction is recorded by a debit to a balance sheet account and...
On January 1, 2021, the general ledger of Big Blast Fireworks includes the following account balances:...
On January 1, 2021, the general ledger of Big Blast Fireworks includes the following account balances: Accounts Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Land Accounts Payable Notes Payable (8%, due in 3 years) Common Stock Retained Earnings Totals Debit Credit $ 24,900 44,000 $ 3,300 45,000 84,100 27,700 45,000 71,000 51,000 $198,000 $198,000 The $45,000 beginning balance of inventory consists of 450 units, each costing $100. During January 2021, Big Blast Fireworks had the following inventory transactions: January...
state whether each statement 1-8 if its true or false Consider the balance sheet of Wilkes...
state whether each statement 1-8 if its true or
false
Consider the balance sheet of Wilkes Industries as shown below. Because Wilkes has $800,000 of retained carnings, the company would be able to pay cash to buy an asset with a cost of $200.000 Cash Inventory Accounts receivable Total Current Assets Net fixed assets $ 50.000 Accounts payable 200.000 Accruals 250.000 Total Current Liabilities S500.000 Debt $ 900.000 Common stock Retained carnings 51.400.000 Total Liabilities & Equity $ 100.000 100.000...
Requirement 1. Indicate whether each of the following statements is true or false. For each false statement, explain why it is false. Use Tor F to indicate whether each of the following statements is true or false. Change each false statement into one that is true. 1. A large cash balance is the best evidence of previous profitable operations. 2. Accounts receivable should be classified as a liability. 3. Machinery used in the business should be recorded at replacement cost....
II. True/False Questions (2 points each, 20points) 1. Accounting is a system that collects and processes financial information about an organization and reports that information to decision makers. 2. In accounting and reporting for a business entity, the accounting and reporting for the business must be kept separate from other economic affairs of its owners. 3. The accounting period in which service revenue is recognized (i.e., revenue for services rendered) is generally the period in which the cash is collected....
15-6 True or False Study Appendix 15B. Use T or F to indicate whether each of the following statements is true or false. For each false statement, explain why it is false. 1. Purchase of inventory on account should be credited to Inventory and debited to Accounts Payable. 2. Increases in asset accounts must always be entered on the right. 3. Increases in stockholders' equity should always be entered as credits. 4. Decreases in liability accounts should be recorded on...
15-6 True or False Study Appendix 15B. Use T or F to indicate whether each of the following statements is true or false. For each false statement, explain why it is false. 1. Purchase of inventory on account should be credited to Inventory and debited to Accounts Payable. 2. Increases in asset accounts must always be entered on the right. 3. Increases in stockholders' equity should always be entered as credits. 4. Decreases in liability accounts should be recorded on...
Part 1: True or False (1.5 point each, 15 points total) Indicate whether the following statements are true (T) or false (F). 1. An income statement presents the revenues, expenses, gains, losses, and net income (or net loss) of the business for a period of time. 2. A debit to a liability account increases that account. 3. The purchase of equipment for cash has no effect on the amount of total assets. 4. Unearned revenue is an income statement account....
AGEC 3423 HW2 Spring 2020 1. True or false? Assets + Liabilities = Owner's Equity. Why? (1 pt) 2. True or false? If the debt/equity ratio increases, the debt/asset ratio will also increase Why? (3pts) 3. True or false? A business with a higher working capital will also have a higher current ratio. Why? (3pts) 4. Use your knowledge of balance sheets and ratio analysis to complete the following abbreviated balance sheet. The current ratio = 2.0, and the debt/equity...
True False 15 (10 @1.5) 1. Revenues, expense dividend are all increases with credit. 2. Dividends are subtracted as expenses in the calculation of net income. 3. A balance sheet covers activities over a period of time such as a month or year. 4. A transaction that credits an asset account and credits a liability account must also affect one or more other accounts. 5. A general journal gives a complete record of each transaction in one place, and shows...
True or False
32) A transaction that causes an increase in an asset may also cause a decrease in another asset, an increase in a liability, or an increase in owners' equity. 33) Window dressing occurs when management attempts to make a company look financially stronger than it actually is. 34) The sale of additional shares of capital stock will cause retained earnings to increase 35) Every business transaction is recorded by a debit to a balance sheet account and...
On January 1, 2021, the general ledger of Big Blast Fireworks includes the following account balances: Accounts Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Land Accounts Payable Notes Payable (8%, due in 3 years) Common Stock Retained Earnings Totals Debit Credit $ 24,900 44,000 $ 3,300 45,000 84,100 27,700 45,000 71,000 51,000 $198,000 $198,000 The $45,000 beginning balance of inventory consists of 450 units, each costing $100. During January 2021, Big Blast Fireworks had the following inventory transactions: January...
state whether each statement 1-8 if its true or
false
Consider the balance sheet of Wilkes Industries as shown below. Because Wilkes has $800,000 of retained carnings, the company would be able to pay cash to buy an asset with a cost of $200.000 Cash Inventory Accounts receivable Total Current Assets Net fixed assets $ 50.000 Accounts payable 200.000 Accruals 250.000 Total Current Liabilities S500.000 Debt $ 900.000 Common stock Retained carnings 51.400.000 Total Liabilities & Equity $ 100.000 100.000...
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