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Accounting 2023 Assignment one questions and answers
Identify the following users of accounting information as either an internal or an
external user.
- Shareholders External
Nonexecu
tive
employee
External
- Purchasing manager Internal
Producti
on
supervis
ors
Internal
Part B
Identify which questions are to be asked by internal or external auditors.
- What are the costs of our service to customers? Internal
Should we spend further
research on our product?
Internal
What are reasonable payroll
benefits and wages?
Internal
Research
and
development
director
Internal
Human
resources
director
Internal
Distribution
managers
Internal
Should we make a five-year loan to
that business?
External
Do income levels justify the current stock
price?
External
Accounting
External / Internal information user
Questions External / Internal
- Creditors External
- What are the costs of our product’s ingredients? Internal
Match each of the numbered descriptions with the term or phrase it best reflects.
- Amount a business
earns after
paying all expenses
and costs associated
with its sales and
Net income
Which firm reports the highest sales
and income?
External
Description Term or Phrase
- generally accepted accounting
practices. General accounting principle
Every business is accounted for separately from its owner or
owners.Business entity assumption
a. Office Mart has assets equal to $135,000 and liabilities equal to
$104,000 at year-end. What is the total equity for Office Mart at
year-end?
Explanation:
Assets = Liabilitie
s
b. At the beginning of the year, Logan Company's assets are $271,000 and its
equity is
$203,250. During the year, assets increase $80,000 and liabilities
increase $48,000. What is the equity at the end of the year?
Explanation:
Using the accounting equation at the beginning of the year:
Assets = Liabilit
ies
Using the accounting equation at the end of the year:
$271,000 + $80,000 = $67,750 + $48,000 + Equity
Total equity $
Equity at the end of the year $
Assets = Liabilities + Equity
$351,000 = $115,750 + $235,
Using the accounting equation at the end of the year:
Using the accounting equation at the beginning of the year:
$190,000 – $60,000 = $75,000+ Equity
The following table shows the effects of five transactions ( a through e )
on the assets, liabilities, and equity of Vera's Boutique. Match the given
transaction with its probable description.
Ass
ets
Lia
b
ilit
ie s
Cas
h
Ac
c
ou
nt
s
Re
c
eiv
a
ble
Of
fi
ce
Su
p
pli
e
s
Lan
d
Ac
c
ou
nt
s
Pa
y
able
C
o
m
m
on
Sto
c
k
Re
v
en
u
es
Assets = Liabilities + Equity
Assets = Liabilities + Equity
$190,000 = $65,000 + $125,
$130,000 = $75,000 + $55,
b.
d.
a.
−
2,
0
2,
0
c. +
950
950
e.
950
−
950
$ 8,95 + $ 0 + $ 2,00 + $ 11,5 = $ 0 + $ 21,5 + $ 950
Offic
e
suppli
es
Rent
expen
se
Office
equipm
en t
Telephon
760 e expense
Account s
receivabl
e
19,
Consultin
g fees
earned
21,
Land 46,
Salaries
expens
e
8,
Com
mo n
stock
Using the above information prepare an October income statement for
the business. (Input all amounts as positive values. Omit the "$"
sign in your response.)
Revenues:
Expenses:
Rent expense
Telephone
expense Total
expenses
Net income $
On October 1, Natalie King organized Real Solutions, a new consulting
firm. On October 31, the company's records show the following items
and amounts.
Cash $ 9,
Cash divid
ends
Account s
payable
39,
Miscellan
eous
expenses
580
REAL SOLUTIONS
Income Statement
For Month Ended October 31
Salaries expense $
Consulting fees earned $
Miscellaneous expenses
t
Com
mo
n stock
Using the above information to prepare an October statement of
retained earnings for Real Solutions. (Leave no cells blank - be
certain to enter "0" wherever required. Input all amounts as
positive values. Omit the "$" sign in your response.)
Retained earnings,
Oct. 1
Less: Cash dividends
Retained earnings,
Oct. 31
Explanation:
Rev
enues
Account s
payable
34,
Miscellan
eous
expenses
580
REAL SOLUTIONS
Statement of Retained Earnings
For Month Ended October 31
Add: Net income
REAL SOLUTIONS
Income Statement
For Month Ended October 31
Exp
enses:
Cons
ulting
fees
earne
d
$ 23,
0
On October 1, Natalie King organized Real Solutions, a new consulting
firm. On October 31, the company's records show the following items
and amounts.
Cash $ 2,
Cash
divide
nds
Account s
receivable 12,
Consultin
g fees
earned
14,
Offic
e
suppli
es
Rent
expense
Office
equipm
en t
Telephone
660 expense
Com
mo n
stock
Using the above information prepare an October 31 balance sheet for
Real Solutions. (Be sure to list the assets and liabilities in order of
their liquidity. Omit the "$" sign in your response.)
REAL
SOLUTIONS
Balance Sheet
October 31
Asset
s
Cash $
Accounts receivable
Office equipment
Accounts payable $
Common stock
Land 36,
Salaries
expens
e
5,
Account s
payable
7,
Miscellan
eous
expenses
680
Office supplies
Total Assets $
Liabilities
Retained earnings
Equity
Land
Explanation:
Rev
enues
Exp
enses:
Re
nt
exp
en
se
Misc
ellane
ous
expen
ses
Telep
hone 660
expen
se
Total 9,
expen
Cons
ulting
fees
earne
d
$ 14,
0
Salar
ies
expe
n se
$ 5,
REAL SOLUTIONS
Income Statement
For Month Ended October 31
ses
N
et
inc
o
me
