Author: Anonymous

The income statement reports on operating activities at a point in time.

The cash basis of accounting recognizes revenues when cash payments from customers are received.

To include the personal assets and transactions of a business’s stockholders in the records and reports of the business would be in conflict with the:

A company’s balance sheet shows: cash $22,000, accounts receivable $16,000, office equipment $50,000, and accounts payable $17,000. What is the amount of stockholders’ equity?

Bevins, Inc.  purchases a machine at the beginning of the year at a cost of $24,000. The machine is depreciated using the units-of-production method. The company estimates it will use the machine for 5 years, during which time it anticipates producing 40,000 units. The machine is estimated to have a $4,000 salvage value. The company produces 9,000 units in year 1 and 6,000 units in year 2. Depreciation expense in year 2 is:

Koosman LLC had $800,000 in sales, sales discounts of $12,000, sales returns and allowances of $18,000, cost of goods sold of $380,000, and $275,000 in operating expenses. Gross profit equals:

Gordon Company uses the allowance method of accounting for uncollectible accounts. On May 3, the Gordon Company wrote off the $2,000 uncollectible account of its customer, A. Hopkins. The entry or entries Gordon makes to record the write off of the account on May 3 is:

On September 12, Wander Enterprises sold merchandise in the amount of $5,800 to Jetson Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Wander uses the periodic inventory system and the gross method of accounting for sales. Jetson pays the invoice on September 18, and takes the appropriate discount. The journal entry that Wander makes on September 18 is:

On January 1, Year 1, Judge, Inc. borrowed $100,000 on a 10-year, 7% installment note payable. The terms of the note require Judge, Inc. to pay 10 equal payments of $14,238 each December 31 for 10 years. The required general journal entry to record the payment on the note on December 31, Year 2 is:

Accounting standards: