If a company receives $12,900 from its sole stockholder to establish a corporation, the effect on the accounting equation would be:
A. Assets increase $12,900 and liabilities decrease $12,900.
B. Liabilities increase $12,900 and equity decreases $12,900.
C. Assets decrease $12,900 and equity decreases $12,900.
D. Assets increase $12,900 and liabilities increase $12,900.
E. Assets increase $12,900 and equity increases $12,900.
Answer: E
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In the audit of accounting estimates, such as the allowance for doubtful accounts, the auditor strives to provide reasonable assurance about which of the following?
a. All material accounting estimates have been developed properly. b. The estimates are reasonable. c. The estimates are presented in accordance with GAAP. d. All of the above are true.
Great Plains Company has acquired a property that included both land and a building for $500,000. The company paid cash. The company hired an appraiser who has determined that the market value of the land is $300,000 and that of the building is $400,000. Journalize the lump-sum purchase. Omit explanation. (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)
What will be an ideal response?
Answer the following questions. (Show your work.) a. Revenue of $60,000 was earned, but only $45,000 was collected. Expenses of $36,000 were incurred, but only $30,000 was paid. What is reported net income? b. Wages of $4,000 are paid every Friday for a
five-day workweek. If the end of the year falls on a Tuesday, the adjusting entry for wages would be recorded at what amount? c. A company vehicle is purchased for $24,000. Assuming an eight-year useful life and zero value at that time, what is the balance of accumulated depreciation after five years? d. Supplies Expense of $3,600 was recorded for a given year. Assuming that $2,400 in supplies were purchased during the year and that $640 in supplies remained at year end, what was the cost of supplies at the beginning of the year?
The first step in the processing of a transaction is to analyze the transaction and source documents.
Answer the following statement true (T) or false (F)