ACC120 Lecture Notes - Lecture 2: Balance Sheet, Income Statement, The Sequence

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ceruleanrabbit658

20 Nov 2017

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This account is the amount the customers owe the business: inventory is an asset account used when a business sells products to customers. The sequence of assets falls in order of liquidity (ease of converting. Cash is the most liquid asset, followed by accounts. Liabilities are arranged in the same fashion, with accounts payable first for example, shortest loans first, followed by long term. Equity is the net worth of the business, after all assets have been sold and all liabilities paid for. Different businesses have different classifications for whom this equity belongs to: in a proprietary business (owned by a single person), it is referred as. Owner"s equity: in a partnership business, it is referred as pa(cid:396)tne(cid:396)s" equity, in a corporation business, it is referred to as shareholders" equity. Accounting: some government institutions refer to it as accumulated surplus or. At the end of the accounting period, the ending owners equity can be calculated by the following:

Related Questions

AvaAva

PetrilloPetrillo

recently opened her own law office on

MarchMarch

?1, which she operates as a corporation. The name of the newentity is

AvaAva

PetrilloPetrillo?,

Attorney.

PetrilloPetrillo

experienced the following events during the organizing phase ofthe new business and its first month of? operation,

MarchMarch

20182018.

Some of the events were personal and did not affect the lawpractice. Others were business transactions and should be accountedfor by the business.

Mar.Mar.???1		Sold personal investment in Amazon?stock, which she had owned for several? years, receiving $ 33 comma 000$33,000 cash.
2		Deposited the $ 33 comma 000$33,000 cash from the sale of the Amazon stock in her personal bankaccount.
3		Deposited $ 60 comma 000$60,000 cash in a new business bank account titled AvaAva PetrilloPetrillo?, Attorney. The business issued common stock to PetrilloPetrillo.
5		Paid $ 450$450 cash for ink cartridges for the printer.
7		Purchased computer for the law?office, agreeing to pay the? account, $ 7 comma 000$7,000?, within three months.
9		Received $ 3 comma 100$3,100 cash from customers for services rendered.
15		Received bill from TheLawyer for magazine? subscription, $ 200$200. ?(Use Miscellaneous Expense? account.)
23		Finished court hearings on behalfof a client and submitted a bill for legal? services, $ 12 comma 000$12,000?, on account.
28		Paid bill from The Lawyer.
30		Paid? utilities, $ 1 comma 300$1,300.
3131		Received $ 1 comma 000$1,000 cash from clients billed on MarchMarch 23.
3131		Cash dividends of $ 3 comma 000$3,000 were paid to stockholders.

Analyze the effects of thepreceding events on the accounting equation of

AvaAva

PetrilloPetrillo?,

Attorney.

Prepare the following financial? statements:

a. Income statement.

b. Statement of retained earnings.

c. Balance sheet.

d. Statement of cash flows.

Requirement 1. Analyze the effects of thepreceding events on the accounting equation of

AvaAva

PetrilloPetrillo?,

Attorney.Analyze the events? chronologically, one transaction ata time. Beginning with the transaction on the? 2nd, calculate thebalance in each account after analyzing the effect of thetransaction on the accounting equation. After calculating theending balance of each account on the

3131?st,

calculate total assets and total liabilities and equity.?(Complete only the necessary answer boxes for your transactionlines. If a transaction is personal and does not affect the?business, leave the transaction line blank. Carry down all balancesto the? "Bal." line, including zero balance? accounts, entering a?"0" for any zero balances. Enter a decrease in an account with aminus sign or parentheses. Abbreviations? used: A/P? = Accounts?Payable; A/R? = Accounts? Receivable; Com.? = Common; Contr. Cap.?= Contributed? Capital; Div.? = Dividends; Comp.? = Computer; Exp.?= Expense; Liab.? = Liabilities; Misc.? = Miscellaneous; Rev.? =Revenue; Sup.? = Supplies; Util.? = Utilities.)

ASSETS

LIAB.

EQUITY

Contr.

Cap.

Retained Earnings

Cash

A/R

Office

Comp.

A/P

Com.

Div.

Service

Util.

Misc.

Sup.

Stock

Rev.

Exp.

3/1

72,000

3/2

Bal.

oliveox657

Take me to the text For the following transactions, fill in the table by selecting the two accounts related to each transaction. For each transaction, two accounts are affected. List balance sheet accounts before income statement accounts. If both accounts are balance sheet accounts, list them in the order they appear on a balance sheet prepared under ASPE. For example, if the transaction impacts the cash account, cash would always appear first. Please select the appropriate choice based on the above instructions Balance sheet accounts should be listed Answer income statement accounts. If the cash account is impacted, it should appear Answer. Transaction Account 1 Account 2 Invested cash in the business. Answer Answer Purchased service automobile for business use. Answer Answer Collected cash for services provided today. Answer Answer Provided services this week on credit. Answer Answer Paid operating expenses in cash. Answer Answer Received a bill for operating expenses incurred this week. Answer Answer Received a loan from the bank. Answer Answer Collected cash from a customer for services provided previously. Answer Answer Paid monthly salaries to employees with cash. Answer Answer Incurred operating expenses this week, to be paid next month. Answer Answer Paid cash for expenses incurred previously. Answer Answer Received cash in advance for the service to be provided next month. Answer Answer Check

pearkangaroo534

1.Which of the following transactions will affect the balance of? Owner, Capital?
A.
collection on account
B.
paid accounts payable
C.
paid rent expense for the month
D.
purchased land for cash

2..Which of the following appears on both the income statement and statement of? owner's equity? A. Net income B. ?Owner, Capital, ending balance C. Total revenues D. ?Owner, Withdrawals

3.A liability created when a business receives cash from customers in advance of providing services or delivering goods is called? a(n) ________.
A.
notes receivable
B.
unearned revenue
C.
accrued liability
D.
service revenue

ACC120 Lecture Notes - Lecture 2: Balance Sheet, Income Statement, The Sequence

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