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Assignment 1

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Uploaded by

Ehab Hosny
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7 views

Assignment 1

n

Uploaded by

Ehab Hosny
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 4

Question 1: Multiple Choice Questions

Question Correct Answer

B) The art of interpreting, measuring, and


1. Which of the following best defines accounting?
communicating financial information.

2. The importance of accounting is all of this, except D) Communicating.

3. Investigation into financial crimes such as fraud


C) Forensic Accounting.
and money laundering

4. The Accounting Assumption is all of this, except D) Materiality.

5. In accounting, which of the following is considered


B) Cash.
an asset?

6. The double-entry system in accounting means that C) Affects at least two accounts, with a debit
each transaction and a credit.

7. Which of the following represents the correct


B) Assets = Liabilities + Equity.
accounting equation?

B) The owner contributes additional capital in


8. Which transaction increases equity?
cash.

10. A business purchases equipment for $5,000 by C) Increase assets by $5,000, increase liabilities
paying $2,000 in cash and taking a loan for the rest. by $3,000, decrease cash by $2,000.

Question 2: True or False

Statement Answer

1. The purpose of accounting is to provide financial information to help in decision-making. True

2. Inventory is an example of an asset. True

3. Expenses are recorded on the left side of the accounting equation. False

4. A credit entry always increases an asset account. False

5. Only assets are reported on the income statement. False


Statement Answer

6. Accrued expenses are recorded when cash is paid in advance for a future expense. False

7. Financial accounting is primarily concerned with providing information for internal users. False

8. The accounting period can be a month, a quarter, or a year. True

9. Accounts payable is an example of a liability. True

Question 3: Transaction Analysis

Transaction Assets Liabilities Equity

1. Owner invests $15,000 cash +$15,000 No change +$15,000

2. Purchase office supplies worth $1,000 -$1,000 No change No change

3. Received $3,000 for services +$3,000 No change +$3,000

4. Paid $500 for rent -$500 No change -$500

5. Owner withdrew $700 -$700 No change -$700

Question 4: Effects of Transactions (Joan Robinson’s Law Office)

Transaction Assets Liabilities Equity

Joan invested $11,000 in cash +$11,000 No change +$11,000

Paid $800 for rent -$800 No change -$800

Purchased office equipment on credit $3,000 +$3,000 +$3,000 No change

Provided legal services for $1,500 cash +$1,500 No change +$1,500

Borrowed $700 cash from a bank +$700 +$700 No change

Performed legal services on account $2,000 +$2,000 No change +$2,000


Transaction Assets Liabilities Equity

Paid monthly expenses of $900 -$900 No change -$900

Joan withdrew $1,000 for personal use -$1,000 No change -$1,000

Question 5: Effects of Transactions (Campus Laundromat)

Transaction Assets Liabilities Equity

Bob invested $20,000 cash +$20,000 No change +$20,000

Paid $1,000 for rent -$1,000 No change -$1,000

Purchased washers and dryers $25,000 +$25,000 +$15,000 -$10,000

Paid $1,200 for insurance -$1,200 No change -$1,200

Advertising bill received: $200 No change +$200 No change

Bob withdrew $700 for personal use -$700 No change -$700

Earned $6,200 from services +$6,200 No change +$6,200

Question 6: Journalizing Ellie Company Transactions

Date Account Debit ($) Credit ($)

Aug 1 Cash 20,000 Capital 20,000

Aug 5 Rent Expense 700 Cash 700

Aug 7 Office Equipment 4,000 Accounts Payable 4,000

Aug 12 Cash 1,500 Revenue 1,500

Aug 15 Salaries Expense 500 Cash 500

Aug 20 Accounts Payable 2,000 Cash 2,000

Aug 25 Accounts Receivable 2,000 Revenue 2,000


Date Account Debit ($) Credit ($)

Aug 30 Withdrawals 500 Cash 500

Question 7: GTS Company

Transaction Debit ($) Credit ($)

March 1: Invested $80,000 cash Cash 80,000 Capital 80,000

March 4: Paid rent $5,000 Rent Expense 5,000 Cash 5,000

March 6: Purchased supplies $4,000 Supplies 4,000 Cash 4,000

March 10: Earned $10,000 Cash 10,000 Revenue 10,000

March 15: Withdrawn $7,500 Withdrawals 7,500 Cash 7,500

Question 8: Adjusting Entries (Stellar Services)

Account Debit ($) Credit ($)

Insurance Expense 3,000 Prepaid Insurance 3,000

Rent Expense 2,700 Prepaid Rent 2,700

Unearned Revenue 1,000 Revenue 1,000

Supplies Expense 2,200 Office Supplies 2,200

Depreciation Expense 3,000 Accumulated Depreciation 3,000

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