question stated that when a Trial Balance balances‚ it means the accounts are free of errors. I disagree with the statement. There may still be errors even if the trial balance is balances. There are six types of errors. The first type of error is the “error of omission” and the word omission mean left out. Its mean that a transaction is not recorded in the books of original entry‚ which mean both the debit and credit effects of the transaction are not shown in the Trial Balance. For example‚ a transaction
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DQ 6.1‚ 6.2‚ 6.12‚ 6.13‚ 7.1 P6.9‚ P6.11‚ p7.7‚ P7.9 * 6.1 balance sheet income statement statement of cash flow * 6.2 to disclose the information about the company that may effect future decisions‚ but is not necessarily included in financial statements 6.12 asset must be from a past transaction must have future economic benefit control by the entity 6.13 must have a present obligation obligation involves economic cost in the future * * 7.1 no measurement of environmental
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3-1 THE ACCOUNTING INFORMATION SYSTEM 3-2 Financial Accounting‚ Seventh Edition 3 Accounting Accounting Transactions Transactions Event (1). On October 1‚ cash of $10‚000 is invested in Sierra Corporation by investors in exchange for $10‚000 of common stock. 1. +10‚000 3-3 +10‚000 LO 1 Analyze the effect of business transactions on the basic accounting equation. Accounting Accounting Transactions Transactions Event (2). On October 1‚ Sierra borrowed $5‚000 from Castle Bank by signing
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Case Question 20 marks Brushstroke Art Studio Company provides quality instruction to aspiring artists. The Business adjusts its accounts monthly‚ but performs closing entries annually on December 31. Given below is the studio’s unadjusted trial balance dated December 31‚ 2011. Brushstroke Art Studio Company | Unadjusted
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understand by the concept of conservatism ? Why is it also called the concept of prudence? Why is it not applied as strongly today as it used to be in the Past? Question 1(b) What is a Balance Sheet? How does a Funds Flow Statement differ from a Balance Sheet? Enumerate the items which are usually shown in a Balance Sheet and a Funds Flow Statement. Question 2(a) Discuss the importance of ratio analysis for inter-firm and intra-firm comparisons including circumstances responsible for its limitations
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800 Cash 800 ______ 12. Accounts Receivable 600 Service Fees Earned 600 PROBLEM 3-2C Gary Company follows the practice of recording prepaid expenses and unearned revenues in balance sheet accounts. Gary’s annual
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supportive evidence is needed to determine whether apparent misstatements are actually material. e. Describe a situation in which confirmation will be considered highly reliable and another in which it will not be reliable. Confirmation of bank balances is considered highly reliable whereas confirmation of a department store charge account is often not considered reliable. Banks are accustomed to confirmations from auditors and
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Final Exam 1. During a recession‚ unemployment ________ while inflation A. falls; falls. B. rises; falls. C. rises; rises. D. falls; rises. 2. Student A says that customer satisfaction is a mark of a world-class business. Student B says that proactive ethics is a mark of a world-class business. Which student is correct? A. Both B. Student A only C. Neither D. Student B only 3. Which of the following represents the basic accounting equation? A. Owners ’ Equity − Liabilities = Assets B. Liabilities
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loans money at 6% per year while it offers short-term investment of 5%. Jane’s cash flows during August were as follows: Item Clothes Interest Received Dining out Groceries Salary Auto Payment Utilities Mortgage Gas Cash Inflow $450 500 800 4500 355 280 1‚200 222 Cash Outflow $ 1‚000 ________________________________________________________________________ HAK 1/4 BFN1014 Financial Management I (Semester 53) a. b. c. d. Determine Jane’s total cash inflows and outflows. Determine the net
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340 Wages 72‚500 Insurance 4‚500 Taxes 32‚500 Depreciation 28‚500 Other 45‚000 Total Expenses 275‚340 ------------------------------------------------- Net Income $246‚660 Grennell Farm Balance Sheet (Sales/Delivery Method) ------------------------------------------------- Year Ending December 31‚ 2009 Assets Liabilities Current Assets Total Liabilities 33‚000 Cash 30‚900 Paid-In Capital 450‚000 Inventory 92‚100
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