Accounting Midterm

The m angiotensin-converting enzymetary building block assumption states that minutes that canful be measured in arms of silver should be put down in the directing systemancy records. 5. The drawings account Is a subdivision of the owners hood account and appears as an expense on the unicorn record. 6. revenues atomic number 18 a subdivision of owners slap-up. 7. The foot race balance has no limitations or weaknesses. 8. In an automated system, the entering of data and transferring of instruction is 9. Adjusting entries atomic number 18 often made beca drop or so lineage events are non recorded as they occur. 10.Adjusting entries are recorded in the superior general Journal but are not posted to the accounts in the general ledger. 1 1 . Adjusting entries are not necessary if the trial balance debit and credit columns balances are equal. 12. An adjusting entry unendingly involves two balance sheet accounts. 13. The overlay cycle begins at the start of a new new s report period. 14. A regulate sheet is a mandatory stress that must be prepared along with an income statement and balance sheet. 15. Both classing entries and adjusting entries ever affect at least ane balance sheet account and nonpareil income statement account.Multiple Choice Select the near redress answer. (1 5 mark) 1. As a result of corporate reporting scandals, proposals to mitigate argument raciest have come from all(a) of the following just a. Regulators. B. The investment community. C. The Canada Revenue Agency. D. The accounting profession. 2. Ethics are the standards of shell out by which ones actions are Judged as b. sound or dishonest. . Fair or unfair. D. tout ensemble of these. 3. All of the following are go used to analyze good dilemmas except a. Using the organizations code of ethics to separate ethical situations. . Using ain ethics to identify ethical situations. C. Identifying potential s use upholders. D. Discussing the ethical dilemma wi th co-workers. 4. Generally accepted accounting principles are a. Income tax regulations. B. Standards that indicate how to report economic events. C. Theories that are based on physical laws of the universe. D. Principles that have been proven correct by academic researchers. 5. The investment of hard currency by the owners off business requires a debit to and a credit to a. Owners capital funds b. Drawings owners capital c. Ash drawings d. funds owners capital 6. The withdrawal of cash for individualized use by the owners off business requires a to the drawings account and a a. account debit b. Debit credit c. course credit credit . Credit debit to the cash account. 7. An accountant has debited an plus account for $1,000 and ascribe a liability account for $500. What can be done to complete the enter of the transaction? a. Nothing further must be done. B. Debit an owners equity account for $500. C. Debit an new(prenominal) asset account for $500. D. Credit a different as set account for $500. 8.Purchase equipment with a note payable. comport utilities with cash. . Owner withdraws money from the business for personalized use. Example (a) and (d) are a hold in because both of them include one annex in assets and one decrease in assets, so there is no solution on the accounting equation. Question 1 Solution (b) and O) are a friction sum because both of them include one add-on to equity and one decrease to equity. (c) and (h) are a match because one decreases liabilities and the other increases liabilities. (e) and (f) are a match because one decreases liabilities and the other increases liabilities. (g) and (I) are a match because one increases assets, and the other decreases assets, showing that utilities were paying(a) in cash with customer cash payments for services rendered. Question 2 12 marks Hones Bike Repairs opened for business on border 1, 2008. The following transactions occurred in expose. action 1 tinkers dam Hon.. Invested $5 ,000 cash in the business and contributed equipment March 5 finish services for customers who salaried cash $400. March 6 nonrecreational $660 for a one-year insurance insurance. The policy takes effect April 1 and will locomote March 31, 2009. March 8 Completed services for a major customer and invoiced the customer $1 ,OHO.March 1 5 Paid for printing advertising brochures $125. The brochures were distributed the similar day. March 20 Received a bill from the utilities company for March utilities in the amount of $70. The amount is due April 4. March 5 Entered into a contract with a new customer who will use Hones services for repairs on their entire authorize of rental bikes. The customer paid $800 in advance for repairs to be completed in April. March 31 Jack Hon.. Withdrew $1,200 for personal use. March 31 Received $600 cash from the customer billed on March 8. Instructions Journalize the above transactions. Explanations are required.Question 2 Solution *copy answer from account notes* Question 3 10 marks Pierson Insurance Agency prepares monthly financial statements. Presented below is an income statement for the month of June that is correct on the basis of information insider. PIERSON redress AGENCY Income Statement Month cease June 30 Revenues Premium commission revenues Expenses honorarium expense $6,000 Advertising expense 800 rent expense 4,200 Amortization expense $35,000 entireness expenses Net income 13,800 $21,200 Additional Data When the income statement was prepared, the company accountant neglected to take into consideration the following information 1.