ACC 240 Lecture 4: ACC 240 class notes part 4

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indigolion532

17 May 2018

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Assets

Probablefuture economic benefits owned by the business as a result of past transactions.

Chart of Accounts

A summary of all account names and corespondent account numbers used to record financial results in

the accounting system.

Classified Balance Sheet

A balance sheet that classifies assets and liabilities into current and other (long-term) categories.

Cost Principal

Requires assets to be recorded at the historical cash-equivalent cost, which is the amount paid or

payable on the date of the transaction.

Current Assets

Assets that will be used up or turned into cash within 12 months or the next operating cycle, whichever

is longer.

Current Liabilities

Short-term obligations that will be paid in cash (or fulfilled with other current assets) within 12 months

or the next operating cycle, whichever comes first.

Debit

When used as a noun, debit is the left side of the account; when used as a verb, debit is the act of

recording the debit portion of a journal entry to a particular account.

Journal

A record of each days transactions.

Journal Entry

An accounting method for expressing the effects of a transaction on accounts in a debits-equal-credits

format.

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Document Summary

Probablefuture economic benefits owned by the business as a result of past transactions. A summary of all account names and corespondent account numbers used to record financial results in the accounting system. A balance sheet that classifies assets and liabilities into current and other (long-term) categories. Requires assets to be recorded at the historical cash-equivalent cost, which is the amount paid or payable on the date of the transaction. Assets that will be used up or turned into cash within 12 months or the next operating cycle, whichever is longer. Short-term obligations that will be paid in cash (or fulfilled with other current assets) within 12 months or the next operating cycle, whichever comes first. When used as a noun, debit is the left side of the account; when used as a verb, debit is the act of recording the debit portion of a journal entry to a particular account.

Related Questions

12 ACCOUNTING QUESTIONS

4. Using a perpetual inventory system, the buyer'sjournal entry to record the return of merchandise purchased onaccount includes a:

Select one:

A. Credit to Cost of Goods Sold

B. Credit to Accounts Payable

C. Credit to Purchase Returns

D. Credit to Inventory

6.Using a perpetual inventory system, the buyerâsjournal entry to record the payment for merchandise within thediscount period includes a:

Select one:

A. Debit to Accounts Payable

B. Debit to Cost of Goods Sold

C. Debit to Purchases

D. Debit to Inventory

7.Which of the following statements regarding cost flows istrue?

Select one:

Cost of goods available for sale is equal to beginning inventoryminus cost of goods purchased.

CGAS = beginning inventory minus ending inventory.

Cost of goods available for sale is equal to beginning inventoryplus cost of goods purchased.

CGAS = cost of goods sold minus cost of goods purchased.

10. Using a perpetual inventory system, the buyerâsjournal entry to record the purchase of merchandise on creditincludes a:

Select one:

A. Debit to Inventory

B. Debit to Freight In

C. Debit to Cost of Goods Sold

D. Debit to Purchases

11. Which of the following is not shown in thestatement of stockholder's equity?

Select one:

A. Unearned revenue

B. Common stock

C. Retained earnings

D. Dividends

13. Using a perpetual inventory system, the sellerâsjournal entry to record the sale of merchandise on account includesa:

Select one:

A. Debit to Accounts Receivable

B. Credit to Cost of Goods Sold

C. Credit to Purchases

D. Debit to Inventory

14. A merchandising company's multi-step income statementdiffers from that of a service company in what way?

Select one:

A service company does not include a line for cost of goodssold.

A service company has a line for selling expenses whereas amerchandising company does not.

There is no difference.

A merchandising company will have a line for income fromoperations whereas a service company will not.

16.Using a perpetual inventory system, the sellerâs journalentry to record the return, by the buyer, of merchandise purchasedon account includes a:

Select one:

A. Credit to Purchase Returns

B. Debit to Cost of Goods Sold

C. Debit to Accounts Receivable

D. Debit to Sales and Allowances

20. For a firm that uses the perpetual inventory system, theSales Returns and Allowances account:

Select one:

A. Is not a contra account

B. Is not used

C. Is debited by the firm receiving returned goods from acustomer

D. Has a normal credit balance

21. Current assets are cash and other assets that will beconverted into cash or used up within:

Select one:

A. One year

B. The normal operating cycle of the business

C. The normal operating cycle of the business or one year,whichever is longer

D. The normal operating cycle of the business or one year,whichever is shorter

22. The balance sheet format that reports assets first and then,beneath the assets, reports the liabilities and stockholders'equity is called the:

Select one:

A. Account form

B. Report form

C. Stack form

D. Classified form

23. Safari Monkey Company sold $2,400,000 worth of merchandise,had $200,000 returned, and then the balance was received during the2% discount period.

What were the companyâs net sales?

Select one:

A. $1,800,000

B. $1,760,000

C. $2,156,000

D. $2,040,000

turquoisesea-lion93

Management of XYZ Company prepare classified balance sheetsusing these classifications:

Indicate the balance sheetclassification of each of the items that are listed below. Assumethe balance sheet is as of 12/31/14. If the item is not presentedon the balance sheet place an âXâ next to the item If the item is acontra account within the particular classification, placeparentheses around the classification.

A classification may be used more thanonce or not at all.

Balance SheetClassifications:

Current Assets

Property Plant & Equipment

Investments

Intangible Assets & Other

Current Liabilities

Non-current Liabilities

Contributed Capital

Earned Capital

Accumulated Other ComprehensiveIncome

Note: The first item isdemonstrated for you.

a.(Current Asset) Allowancefor doubtful accounts.

b._______________ Customers' accountswith credit balances.

c.________________ Bond sinkingfund.

d._______________ Salaries which thecompany's cash budget shows will be paid to employees in 2015.

e._______________ Accumulateddepreciationâequipment.

f._______________ Appropriation forplant expansion.

g._______________ Amortization ofpatents for 2014.

h._______________ On December 31,2014, management signed a purchase commitment to buy all of its rawmaterials from its primary vendor for the next 2 years.

i.________________ Discount on bondspayable due March 31, 2017.

j.________________ Launching of thecompanyâs online retailing division in February, 2015.

k._______________ Cash dividendsdeclared on 12/15/14 payable to stockholders on 1/15/15.

lemonlion562

The comparative balance sheet of Whitman Co. at December 31,20Y2 and 20Y1, is as follows:

1		Dec. 31, 20Y2	Dec. 31, 20Y1
2	Assets
3	Cash	$918,000.00	$964,800.00
4	Accounts receivable (net)	ââ828,900.00	761,940.00
5	Inventories	1,268,460.00	1,162,980.00
6	Prepaid expenses	29,340.00	35,100.00
7	Land	315,900.00	479,700.00
8	Buildings	1,462,500.00	900,900.00
9	Accumulated depreciation-buildings	(408,600.00)	(382,320.00)
10	Equipment	512,280.00	454,680.00
11	Accumulated depreciation-equipment	(141,300.00)	(158,760.00)
12	Total assets	$4,785,480.00	$4,219,020.00
13	Liabilities and Stockholdersâ Equity
14	Accounts payable (merchandise creditors)	$922,500.00	$958,320.00
15	Bonds payable	270,000.00	0.00
16	Common stock, $25 par	â317,000.00	117,000.00
17	Paid-in capital: Excess of issue price over parâcommon stock	758,000.00	558,000.00
18	Retained earnings	2,517,980.00	2,585,700.00
19	Total liabilities and stockholdersâ equity	$4,785,480.00	$4,219,020.00

The noncurrent asset, noncurrent liability, and stockholdersâequity accounts for 20Y2 are as follows:

ACCOUNT Land

					ACCOUNT NO.
					Balance
Date		Item	Debit	Credit	Debit	Credit
20Y2
Jan.	1	Balance			479,700
Apr.	20	Realized $151,200 cash from sale		163,800	315,900

ACCOUNT Buildings

					ACCOUNT NO.
					Balance
Date		Item	Debit	Credit	Debit	Credit
20Y2
Jan.	1	Balance			900,900
Apr.	20	Acquired for cash	561,600		1,462,500

ACCOUNT Accumulated DepreciationââBuildings

					ACCOUNT NO.
					Balance
Date		Item	Debit	Credit	Debit	Credit
20Y2
Jan.	1	Balance				382,320
Dec.	31	Depreciation for year		26,280		408,600

ACCOUNT Equipment

					ACCOUNT NO.
					Balance
Date		Item	Debit	Credit	Debit	Credit
20Y2
Jan.	1	Balance			454,680
	26	Discarded, no salvage		46,800	407,880
Aug.	11	Purchased for cash	104,400		512,280

ACCOUNT Accumulated Depreciation ââEquipment

					ACCOUNT NO.
					Balance
Date		Item	Debit	Credit	Debit	Credit
20Y2
Jan.	1	Balance				158,760
	26	Equipment discarded	46,800			111,960
Dec.	31	Depreciation for year		29,340		141,300

ACCOUNT Bonds Payable

					ACCOUNT NO.
					Balance
Date		Item	Debit	Credit	Debit	Credit
20Y2
May	1	Issued 20-year bonds		270,000		270,000

ACCOUNT Common Stock $25 par

					ACCOUNT NO.
					Balance
Date		Item	Debit	Credit	Debit	Credit
20Y2
Jan.	1	Balance				117,000
Dec.	7	Issued 8,000 shares of common stock for $50 per share		200,000		317,000

ACCOUNT Paid-In Capital in Excess of ParââCommonStock

					ACCOUNT NO.
					Balance
Date		Item	Debit	Credit	Debit	Credit
20Y2
Jan.	1	Balance				558,000
Dec.	7	Issued 8,000 shares of common stock for $50 per share		200,000		758,000

ACCOUNT Retained Earnings

					ACCOUNT NO.
					Balance
Date		Item	Debit	Credit	Debit	Credit
20Y2
Jan.	1	Balance				2,585,700
Dec.	31	Net loss	35,320			2,550,380
	31	Cash dividends	32,400			2,517,980

Prepare a statement of cash flows, using the indirect method ofpresenting cash flows from operating activities. Refer to theLabels and Amount Descriptions list provided for the exact wordingof the answer choices for text entries. Be sure to complete theheading of the statement. Use the minus sign to indicate net loss,cash outflows, cash payments, decreases in cash, or any negativeadjustments.

orangedolphin256

ACC 240 Lecture 4: ACC 240 class notes part 4

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