Net Income, Office Supplies, Accounts Receivable, Financial Accounting Fundamentals
The key terms in this Financial Accounting Fundamentals course include Net Income, Office Supplies, Accounts Receivable, Stockholder’s, Investment, Common Stock, Dividends, Equity, Balance Sheet, Journal Entry, Assets, Liabilities, FIFO Perpetual Inventory, Cost of Goods Sold, Wages Payable, Note Payable
At the end of its first month of operations, Michael’s Consulting Services reported net income of $26,200. They also had account balances of: Cash, $18,800; Office Supplies, $2,200 and Accounts Receivable $10,400. The sole stockholder’s total investment in exchange for common stock for this first month was $5,200. There were no dividends in the first month.
Calculate the amount of total equity to be reported on the balance sheet at the end of the month.
$31,400
$26,200
$21,000
$5,200
$7,400
Explanation
Stockholder Investments $5,200 + Net Income $26,200 = $31,400
ABC Catering received $940 cash from a customer for catering services to be provided next month. Given the choices below, determine the general journal entry that ABC Catering will make to record the cash receipt. Assume the company’s policy is to initially record prepaid and unearned items in balance sheet accounts.
| Unearned Catering Revenue | 940 | |
| Catering Revenue | 940 |
| Cash | 940 | |
| Accounts Receivable | 940 |
| Cash | 940 | |
| Unearned Catering Revenue | 940 |
- Correct
| Cash | 940 | |
| Catering Revenue | 940 |
| Accounts Receivable | 940 | |
| Catering Revenue | 940 |
Identifying assets, liabilities, and equity
Identify each of the following items as assets, liabilities, or equity from the drop down provided.
| 1. | Accounts Receivable | Assets |
| 2. | Wages payable | Liabilities |
| 3. | Supplies | Assets |
| 4. | Equipment | Assets |
| 5. | Note payable | Liabilities |
| 6. | Furniture | Assets |
Grays Company has inventory of 21 units at a cost of $9 each on August 1. On August 3, it purchased 31 units at $11 each. 23 units are sold on August 6. Using the FIFO perpetual inventory method, what amount will be reported as cost of goods sold for the 23 units that were sold?
$152.
$211.
$215.
$483.
$217.
Explanation
(21 units * $9) + (2 units * $11) = $211.00
At the end of its first month of operations, Michael’s Consulting Services reported net income of $26,200. They also had account balances of: Cash, $18,800; Office Supplies, $2,200 and Accounts Receivable $10,400. The sole stockholder’s total investment in exchange for common stock for this first month was $5,200. There were no dividends in the first month.
Calculate the amount of total equity to be reported on the balance sheet at the end of the month.
$31,400
$26,200
$21,000
$5,200
$7,400
Explanation
Stockholder Investments $5,200 + Net Income $26,200 = $31,400
ABC Catering received $940 cash from a customer for catering services to be provided next month. Given the choices below, determine the general journal entry that ABC Catering will make to record the cash receipt. Assume the company’s policy is to initially record prepaid and unearned items in balance sheet accounts.
| Unearned Catering Revenue | 940 | |
| Catering Revenue | 940 |
| Cash | 940 | |
| Accounts Receivable | 940 |
| Cash | 940 | |
| Unearned Catering Revenue | 940 |
- Correct
| Cash | 940 | |
| Catering Revenue | 940 |
| Accounts Receivable | 940 | |
| Catering Revenue | 940 |
Identifying assets, liabilities, and equity
Identify each of the following items as assets, liabilities, or equity from the drop down provided.
| 1. | Accounts Receivable | Assets |
| 2. | Wages payable | Liabilities |
| 3. | Supplies | Assets |
| 4. | Equipment | Assets |
| 5. | Note payable | Liabilities |
| 6. | Furniture | Assets |
Grays Company has inventory of 21 units at a cost of $9 each on August 1. On August 3, it purchased 31 units at $11 each. 23 units are sold on August 6. Using the FIFO perpetual inventory method, what amount will be reported as cost of goods sold for the 23 units that were sold?
$152.
$211.
$215.
$483.
$217.
Explanation
(21 units * $9) + (2 units * $11) = $211.00