Assignment
1. Select whether the definition provided is true or false.
Accounting can be defined as:
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1.
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The language of business.
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True
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2.
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A measurement/communication process.
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True
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3.
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A mathematics course.
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False
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2. The following provides a list of transactions and a list of business activities.
Required:
Select the business activity that corresponds to the transaction.
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Transactions
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Business Activities
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1.
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Borrow from the bank.
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Financing
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2.
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Provide services to customers.
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Operating
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3.
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Issue common stock to investors.
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Financing
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4.
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Purchase land.
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Investing
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5.
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Pay rent for the current period.
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Operating
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6.
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Pay dividends to stockholders.
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Financing
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7.
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Purchase building.
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Investing
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3.Falcon Incorporated has the following transactions with Wildcat Corporation.
Required:
1. & 2. For each transaction, indicate whether Falcon would classify the related account as an asset, liability, or stockholders' equity to be reported in the balance sheet; a revenue or expense to be reported in the income statement; or a dividend to be reported in the statement of stockholders' equity and the type of activity as financing, investing, or operating.
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Transactions
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Falcon's Related Account
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Account
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Activity
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1.
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Falcon purchases common stock of Wildcat.
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Investment
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2.
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Falcon borrows from Wildcat by signing a note.
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Notes payable
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3.
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Wildcat pays dividends to Falcon.
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Dividend revenue
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4.
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Falcon provides services to Wildcat.
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Service revenue
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Operating
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5.
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Falcon pays interest to Wildcat on borrowing.
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Interest expense
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Operating
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4. Wildcat Corporation has the following transactions with Falcon Incorporated.
Required:
1. & 2. For each transaction, indicate whether Wildcat would classify the related account as an asset, liability, or stockholders' equity to be reported in the balance sheet; a revenue or expense to be reported in the income statement; or a dividend to be reported in the statement of stockholders' equity and the type of activity as financing, investing, or operating.
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Transactions
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Wildcat's Related Account
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Account
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Activity
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1.
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Falcon purchases common stock of Wildcat.
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Common stock
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2.
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Falcon borrows from Wildcat by signing a note.
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Notes receivable
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3.
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Wildcat pays dividends to Falcon.
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Dividend
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4.
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Falcon provides services to Wildcat.
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Service fee expense
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5.
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Falcon pays interest to Wildcat on borrowing.
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Interest revenue
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5. Cougar's Accounting Services provides low-cost tax advice and preparation to those with financial need. At the end of the current period, the company reports the following amounts: Assets = $19,000; Liabilities = $15,000; Revenues = $28,000; Expenses = $33,000.
Required:
1. Calculate net loss.
2. Calculate stockholders' equity at the end of the period.
6.Select the business organization that matches with the description: corporation, partnership, sole proprietorship.
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Descriptions
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Business Organizations
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a.
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Business owned by two or more persons.
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b.
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Entity legally separate from its owners.
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c.
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Business owned by a single person.
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7. Select the account classification that matches with the description.assets, liabilities, stockholders equity, dividends, expenses, revenues,
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Descriptions
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Account Classifications
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a.
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Sales of products or services.
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b.
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Owners' claims to resources.
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c.
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Distributions to stockholders.
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d.
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Costs of selling products or services.
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e.
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Resources of a company.
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f.
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Amounts owed.
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8. Below are typical transactions for Hewlett-Packard.
Required:
Select the type of business activity as financing, investing, or operating for each transaction of Hewlett-Packard. Financing, investing, operating
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Transactions
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Type of Business Activity
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1.
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Pay amount owed to the bank for previous borrowing.
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2.
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Pay utility costs.
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3.
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Purchase equipment to be used in operations.
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4.
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Provide services to customers.
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5.
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Purchase office supplies.
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6.
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Purchase a building.
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7.
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Pay workers' salaries.
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8.
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Pay for research and development costs.
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9.
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Pay taxes to the IRS.
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10.
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Sell common stock to investors.
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9. Below are the account balances for Cowboy Law Firm at the end of December.
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Accounts
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Balances
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Cash
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5,400
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Salaries expense
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2,200
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Accounts payable
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3,400
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Retained earnings
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3,900
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Utilities expense
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1,200
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Supplies
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13,800
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Service revenue
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9,300
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Common stock
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6,000
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Required:
Use only the appropriate accounts to prepare an income statement.
10. Account classifications include assets, liabilities, stockholders' equity, dividends, revenues, and expenses.
Required:
For each transaction, select whether the related account would be classified in the balance sheet as an asset, a liability, or stockholders' equity; in the income statement as a revenue or an expense; or in the statement of stockholders' equity as a dividend.
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Accounts
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Related Transactions
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Account Classifications
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1.
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Common stock
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Sale of common stock to investors.
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2.
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Equipment
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Equipment used for operations.
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3.
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Salaries payable
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Amounts owed to employees.
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4.
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Service revenue
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Sales of services to customers.
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5.
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Utilities expense
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Cost of utilities.
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6.
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Supplies
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Purchase of office supplies.
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7.
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Research and development expense
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Cost of research and development.
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8.
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Land
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Property used for operations.
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9.
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Income tax payable
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Amounts owed to the IRS for taxes.
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10.
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Interest payable
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Amount of interest owed on borrowing.
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