Question: Match the accounting term with the corresponding

> For the following series of journal entries, indicate whether each is an adjusting entry (ADJ) or a closing entry (CL).

> According to the Real World Accounting Video, GAAP is the term used for _______________. a. Government Accredited Accounting Positions b. Generally Accepted Accounting Principles c. General and Accounting Procedures

> The accounting records for Audio Masters, Corp., contain the following amounts on April 30, 2016. The accounts appear in no particular order.
Prepare the trial balance for Audio Masters at April 30, 2016. List the accounts in proper order.

> According to the Real World Accounting Video, ________ is a profitability measure thatshows how much net income is earned on every dollar of sales. a. sales ratio b. expense ratio c. asset financing ratio d. profit margin ratio

> Action Powersports, Inc., a corporation, sells and services personal watercraft. Thebusiness experienced the following events. State whether each event (a) increased,(b) decreased, or (c) had no effect on the total assets of the business, and identify th

> According to the Real World Accounting Video, the objective of business is to createvalue. True or False?

> According to the Real World Accounting Video, a __________ is a profitability measure computed as net income/net sales. a. gross profit margin ratio b. profit margin ratio c. net income ratio d. net sales ratio

> The accounting records for The Skate Shed, Inc., reflected the following amounts at the end of January 2016:

> According to the Real World Accounting Video, the cost of merchandise inventory that the business has sold to customers is called _________________. a. inventory shrinkage b. cost of business c. cost of goods sold d. cost of inventory

> The following selected accounts and balances appear on the adjusted trial balance for Waverly, Inc., on July 31, 2016:
1. What is the net income or net loss? 2. What is the change in Retained Earnings? 3. Journalize the closing entries required.

> According to the Real World Accounting Video, the excess of sales revenue over cost of goods sold is called _______________. a. the sales margin or net sales b. the gross margin or gross profit c. net income or earnings after taxes

> After operating for a month, Rosa Anderson’s dental practice completed the following transactions during September:
Using the steps outlined in the five-step transaction analysis, record the transactions in the journal.

> According to the Real World Accounting Video, businesses take risks to earn a profit. Trueor false?

> As a manager of a department store, you must deal with a variety of business transactions. Place the letter of each of the following transactions next to the effect it has onthe accounting equation. a. Paid cash to the stockholders as a distribution of e

> Which financial statement would be most useful to answer each of the followingquestions? a. Does the corporation have enough resources to pay its short-term debts? b. What is the corporation’s policy toward “growing the company” versus distributing its w

> From the following list of accounts from the adjusted trial balance, identify each as an asset, liability, stockholders’ equity, revenue, or expense. Use the most detailed account type appropriate. Also, state whether each account is a permanent or a tem

> Which correctly represents the flow of information from one financial statement to another? a. Statement of retained earnings to the balance sheet b. Income statement to the statement of retained earnings c. Both a and b are correct. d. None of the above

> What are the objectives of the closing process? Which kind of accounts get closed? What is the only account affected by the closing process but not closed?

> Rosa Anderson opened a dental practice in Spokane, Washington as a corporation. The following transactions took place in August:
Using the steps outlined in the five-step transaction analysis, record the transactions in the journal.

> The entry to record the payment of $1,500 rent expense would be which of thefollowing?

> When it is time to prepare the financial statements, from where do the financial statement numbers come?

> Label each of the items listed with the abbreviation of the financial statement on which it appears. Items may appear on more than one statement. Income Statement (IS) Balance Sheet (BS) Statement of Retained Earnings (RE) ______ 1. Accounts Receivable _

> The income statement reports a. financial position for a specific period. b. results of operations on a specific date. c. financial position on a specific date. d. results of operations for a specific period

> Suppose Rocky Mountain, Inc., lost its entire inventory in a hurricane. Beginning inventory was $49,000, net purchases totaled $530,000, and sales came to $880,000. Rocky Mountain’s normal gross profit percentage is 42 percent. Use the gross profit metho

> If a company is having a harder time selling its products, even at discounted prices compared to last year, would this year’s inventory turnover rate be higher or lower than last year’s rate? What about the gross profit rate?

> Selected account balances for Maria’s Mocha at the end of the month are listed below in random order:
Identify or compute the following amounts for Maria’s Mocha: a. Total current assets b. Total current liabilities c. Book value of plant assets d.

> Suppose Acme Electronics, Inc., had sales of $195,000 and sales returns of $15,000. Cost of goods sold was $108,000. What was Acme Electronics’ gross profit percentage (rounded) for this period? a. 37 percent b. 40 percent c. 45 percent d. 34 percent

> What situation might explain why a company’s gross profit percentage went down from 60 percent to 40 percent from one year to the next?

> This exercise is the first exercise in a sequence that begins an accounting cycle. The cycle is continued in Chapter 2 and completed in Chapter 3. Sensations Salon, Inc., was opened by SharmaineCrosswhite in her home and completed the following transacti

> Purpose: To help you understand the importance of cash flows in the operation of a small business. You have just received your year-end financial statements from your CPA and you notice one very disturbing item. The net income from your income statement

> Place the corresponding letter of the definition next to the term. ______ 1. Cost principle ______ 2. Business entity principle ______ 3. Generally Accepted Accounting Principles ______ 4. Reliability principle a. An organization that stands as a separa

> Which type of business organization is owned by its stockholders? a. Proprietorship b. Partnership c. Corporation d. All the above are owned by stockholders.

> Go to the Columbia Sportswear Company Annual Report located in Appendix A and find the Consolidated Balance Sheets on page 663. Now access the 2014 Annual Report for Under Armour, Inc. To do this from the Internet, go to the company’s Web page at http://

> Each chapter will have a financial statement case that will focus on material contained in that chapter. You will be asked questions and will then refer to Appendix A at the end of the book where you will find the annual report for Columbia Sportswear Co

> During April, Bargain Hardware made sales of $42,300 and ended the month with inventories totaling $5,400. Cost of Goods Sold was $21,900. Total operating expenses were $10,800. How much net income did Bargain Hardware earn for the month? a. $4,200 b. $2

> The introduction to this chapter suggests that the chapter will explore the answers to some questions about inventory. Did you get the answers to those questions? Specifically, a. why does inventory need to be counted? b. what would happen if the count w

> You received a letter from one of your good customers complaining about the shipment of your product she just received. Football season is approaching, and the customer had ordered a large shipment of regulation-size footballs. Instead, she received yout

> The end of the year is approaching. You’re going to meet with your CPA next week to do some end-of-the-year tax planning, so in preparation for that meeting, you look at your last month’s income statement. You know that you’ve had a pretty good year, whi

> The following characteristics are related to either periodic inventory or perpetual inventory systems. 1. A physical count of goods on hand at year-end is required. 2. Inventory records are continuously updated. 3. Purchases of inventory are recorded in

> Lisa Hill and her husband Mike were the owners of LM Enterprises, Inc. They applied for a small business loan, and the bank requested the most recent business financial statements. When Lisa compiled the balance sheet, she noticed that the business’s ass

> Which account does a merchandiser use that a service company does not use? a. Cost of goods sold b. Inventory c. Sales revenue d. All of the above

> Find the Columbia Sportswear Company Annual Report located in Appendix A, and go to the financial statements starting on page 663. Now access the 2014 Annual Report for Under Armour, Inc., from the Internet. For instructions on how to access the report o

> This case uses both the income statement (statement of operations) and the balance sheet of Columbia Sportswear in Appendix A at the end of the book. Requirements 1. What income statement format does Columbia Sportswear use? How can you tell? 2. Calcula

> Rob Peterson works as a salesperson at Consolidated Systems, Inc. In addition to a base monthly salary, Rob receives a commission based on the amount of sales that he makes during the month. Rob was hoping to have enough money for a down payment on a new

> What accounts will appear on the financial statements of a merchandiser that will not appear on those of a service-oriented company?

> Let’s look at Dick’s Sporting Goods (Dick’s) some more. Think about Dick’s. Think about accountants reporting what Dick’s has, where it got its money, and what it has been doing to create value. Is Dick’s earning net income or loss? What resources did Di

> In this problem, we continue the accounting for Fitness Equipment Doctor, Inc., from Chapter 3. On June 1, Fitness Equipment Doctor, Inc., expanded its business and began selling and installing gym equipment. The post-closing trial balance for Fitness Eq

> You have received a letter from a disgruntled client concerning this year’s tax return that your firm recently completed for his or her company. The client’s business is in the second year of operations, and you remembered that it seemed to be much more

> It’s the end of the month, and cash flow has been a little slow, as it usually is during this time of the accounting period. It just seems to be a little slower this month. You know that Wednesday the 31st is payday, which always requires a large cash ou

> The text states that accounting is the “language of business.” What does this mean? Why isit important to know the language?

> The revenue recognition principle says a. divide time into equal periods to measure net income or net loss properly. b. record revenue only after you have earned it. c. match revenues and expenses in order to compute net income. d. record revenue only wh

> Go to the Columbia Sportswear Company Annual Report located in Appendix A. Now access the 2014 Annual Report for Under Armour, Inc. For instructions on how to access the reportonline, see the Industry Analysis in Chapter 1. Requirement 1. By reviewing t

> Purpose: To help familiarize you with the financial reporting of a real company in order to further your understanding of the chapter material. This case will help you to better understand the effect of adjusting journal entries on the financial statemen

> Jilian Carter was preparing the adjusting journal entries for Jilian’s Java, a business that uses the accrual basis of accounting, in order to prepare the adjusted trial balance and financial statements. She knew that $610 of salaries related to the curr

> If XYZ Consulting performs a consulting service and bills the customer on June 28 and receives payment from the customer on July 19, on what date would revenue be recorded if a. XYZ uses the cash basis of accounting? b. XYZ uses the accrual basis of acco

> This problem continues the accounting process for Fitness Equipment Doctor, Inc., from the continuing problem in Chapter 2. The trial balance for Fitness Equipment Doctor, Inc., at April 30, 2016, should look like this:
During May, the following tran

> Let’s look at Dick’s Sporting Goods (Dick’s) some more. Think about Dick’s. Think about accountants reporting what Dick’s has, where it got its money, and what it has been doing to create value. Is Dick’s earning net income or loss? What resources did Di

> This exercise continues the accounting process for Sensations Salon, Inc., from the continuing exercise in Chapter 2. Refer to the T-accounts and the trial balance that you prepared for Sensations Salon, Inc., at May 31, 2016. Requirements 1. Open these

> Brava Landscaping, Inc., completed the following transactions during its first month of operations for January 2016: a. Gabrielle Brava invested $8,500 cash and a truck valued at $16,000 to start Brava Landscaping, Inc.; the business issued common stock

> Consider the situation presented in the Small Business Analysis. Your client had two concerns thatshe asked you about. The first one is that she was concerned that her Cash balance had a creditbalance instead of a debit balance. And even after the correc

> Let’s look at Dick’s Sporting Goods (Dick’s), the largest retailer of sporting goods in the United States. Think about Dick’s, all its stakeholders, what products it sells, and how and where it sells its products. Think about all the employees who work f

> You’re sitting in your CPA office late on a Friday afternoon when you get an e-mail from aclient. You know that she has been working on setting up a new accounting system in her officefor a new business that she just started. You figured this would event

> Match the accounting terms at the left with the corresponding definitions at the right. 1. Account 2. Assets business. 3. Stockholders’ Equity 4. Expenses 5. Liabilities 6. Revenues 7. Transactions a. Any economic event that has a financial impact on th

> Which sequence of actions correctly summarizes the accounting process? a. Prepare a trial balance, journalize transactions, post to the accounts. b. Journalize transactions, post to the accounts, prepare a trial balance. c. Post to the accounts, jou

> Go to the Columbia Sportswear Company Annual Report located in Appendix A. Now access the 2014 Annual Report for Under Armour, Inc. For instructions on how to access the report online, see the Industry Analysis in Chapter 1. Requirements Answer these qu

> Although we do not have access to the journals used by Columbia Sportswear, we can still understand various business transactions on the financial statements in Columbia Sportswear’s annual report. Refer to the Columbia Sportswear income statements, “Sta

> Lynne Jamison was recording the daily transactions of Liberty Physical Therapy, Inc., into the accounting records so she could prepare financial statements and apply for a bank loan. Some of the business expenses were higher than she expected, and Lynne

> The order in which assets were listed and described in the text is the order in which you will see them listed on the balance sheet. What is the organizing principle behind the order in which assets are listed?

> Let’s look at Dick’s Sporting Goods (Dick’s) some more. Think about Dick’s. Think about accountants reporting what Dick’s has, where Dick’s got its money, and what Dick’s has been doing to create value. Is Dick’s earning net income or loss? What resource

> This exercise continues with the business of Sensations Salon, Inc., begun in the continuing exercise in Chapter 1. Instead of entering the transactions in the accounting equation as you did in Chapter 1, now you will account for Sensations Salon, Inc.’s

> You just received an e-mail from a potential new client who contacted you from your Web site. This client has indicated that he or she is planning to start a new business. The client is concerned about legal liability as well as taxation and is questioni

> What is the statute of limitations for transactions involving: a. Fraud (e.g., failure to file a tax return) b. Disallowance of tax deduction items c. The omission of rental income that is greater than 25% of the taxpayer’s reported gross income

> Kathleen owns 500 shares of Buda Corporation common stock which was purchased on March 20, 1999, for $48,000. On October 10 of the current year, she receives a distribution of 500 stock rights. Each stock right has a $20 FMV and the FMV of the Buda commo

> Why did the Supreme Court rule in the Corn Products case that a gain due to the sale of futures contracts is ordinary income instead of capital gain?

> USA Corporation hired Jesse to install a computer system for the company and paid him $8,000 for the work. USA soon realized that there were problems with the system and asked Jesse to refund the payment. At the end of the year the dispute had not been r

> Which of the following would likely be a constructive dividend? a. An unreasonable salary paid to a shareholder. b. An unreasonable salary paid to the daughter of a shareholder. c. A sale of a corporation’s asset to a shareholder at fair market value.

> The PDQ Partnership earned ordinary income of $150,000 in 2017. The partnership has three equal partners, Pete, Donald, and Quint. Quint, who is single, uses the standard deduction, and has other income of $15,000 (not connected with the partnership) in

> For the following independent situations, determine the optimum filing status for the years in question. a. Wayne and Celia had been married for 24 years before Wayne died in an accident in 2015. Celia and her son, Wally, age 21 in 2015, continued to li

> Under what circumstances may a taxpayer deduct an illegal bribe or kickback?

> Lee and Jane have been your firm’s clients for most of the twenty years they have been married. Recently Lee came to you and said that he and Jane are obtaining a divorce, and he wants you to help him with some of the tax and financial issues that may co

> Andy owns an appliance store where he has merchandise such as refrigerators for sale. Roger, a bachelor, owns a refrigerator, which he uses in his apartment for personal use. For which individual is the refrigerator a capital asset?

> Irene owns a truck costing $15,000 and used for personal activities. The truck has a $9,600 FMV when it is transferred to her business, which is operated as a sole proprietorship. a. What is the basis of the truck for determining depreciation? b. What

> Most estates are not subject to the federal estate tax. a. Why is this the case? b. Do you believe most estates should be subject to the federal estate tax?

> Mike, a real estate broker in California, recently inherited a farm from his deceased uncle and plans to sell the farm to the first available buyer. His uncle purchased the property 12 years ago for $600,000. The FMV of the farm on the date of the uncle’

> For flow-through entities, such as partnerships, how does the tax law use partner basis adjustments to prevent double taxation of partnership income?

> a. Briefly explain the concept of support. b. If a taxpayer provides 50% or less of another person’s support, is it possible for the taxpayer to claim a dependency exemption? Explain. c. Does support include the value of an automobile? Explain.

> Determine the taxable income for the Columbia Corporation for the following independent cases: Income from Operations STCG (NSTCL) NLTCG (NLTCL) $30,000 (50,000) (37,000) (15,000) Case A B C D $110,000 100,000 80,000 90,000 $44,000 65,000 30,000 (9,0

> The profession of tax practice involves four principal areas of activity. Discuss these four areas.

> During the current year, Stan sells a tract of land for $800,000. The property was received as a gift from Maxine on March 10, 1995, when the property had a $310,000 FMV. The taxable gift was $300,000 because the annual exclusion was $10,000 in 1995. Max

> Kathleen pays $3,000 mortgage interest on the home that she and her husband live in. Kathleen and her husband live with Molly, Kathleen’s mother. The title to the home is in Kathleen’s name. However, the mortgage is Molly’s obligation. Kathleen claims Mo

> What documentation is required in order for a travel or entertainment expense to be deductible?

> List the conditions that must be met in order to claim a dependency exemption for qualifying children and qualifying relatives. Briefly explain each one.

> In the following situations, indicate whether the taxpayer qualifies as a head of household. a. Allen is divorced from his wife. He maintains a household for himself and his dependent mother. b. Beth is divorced from her husband. She maintains a home fo

> Which of the following constitutes constructive receipt in the current year ended December 31? a. A salary check received at 6:00 p.m. on December 31, after all the banks have closed. b. A rent check received on December 30 by the manager of an apartmen

> Lisa and John are in the business of breeding beavers to produce fur for sale. They recently purchased a pair of breeding beavers for $30,000 from XUN, Inc., and agreed to pay interest at 10% each year for five years. After the five-year period, they cou

> Four years ago, Susan loaned $7,000 to her friend Joe. During the current year, the $7,000 loan is considered worthless. Explain how Susan should treat the worthless debt for tax purposes.

> a. Explain the distinction between a deduction and a credit. b. Which is worth more, a $10 deduction or a $10 credit? c. Explain the difference between refundable and nonrefundable credits.

> Nancy and the Minor Corporation own bonds of the East Corporation. Minor Corporation owns 80% of the stock of East Corporation. East Corporation has declared bankruptcy this year, and bondholders will receive only 26% of the face value of the debt. Expla

> During 2017, Julio attended school for much of the year but was supported by his parents. Julio married Jillian in December 2017. Julio graduated and began working full-time in 2018. Jillian worked during 2017 and earned $20,000. Julio’s only income was

> Carl and Carol have salaries of $14,000 and $22,000, respectively. Their itemized deductions total $8,500. They are married and both are under age 65. a. Compute their taxable income assuming they file jointly. b. Compute their taxable incomes assuming