Acc121 Course Project

1745 Words May 2nd, 2015 7 Pages
1. | Question : | (TCO 1) The Accounting Equation is used to develop the organization's financial reports. (1) Describe what assets value would be if Liabilities are $12,000 and Owners' Equity is $50,000 by showing the Accounting Equation (10 points), and (2) provide an example of two asset accounts that could contain the value. (10 points) | | | Student Answer: | | 1.Assets=Liabilities+Owners Equity 12,000+50000 Assets=62,000 2.Cash and Equipment | | Instructor Explanation: | Textbook pages 11-12. Assets = $12,000 + $50,000 = $62,000. Cash and inventory are examples. | | | | Comments: | | | |

Question 2. | Question : | (TCO 1) The financial statements present a company to the public in financial
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(1) Explain what the Stable-Monetary-Unit Assumption is (10 points) and (2) provide an example of its application. (10 points) | | | Student Answer: | | the monetary unit assumption is that in the long run, the dollar is stable it does not lose its purchasing power. this assumption allows the accountant to add the cost of a parcel of land purchased in 2013 to the cost of land purchased in 1956. for example, if two acre parcel cost the company 20,000 in 1956 and in 1023 a two acre parceladjacent to the original parcel is ourchased for a cost of 800000 the accountant will add the 800000 ti the land account and will report the land aoounts balance of 820000 on the companys balance sheet. to say that the purchasing power of the dollar has not changed from 1956 to 2013 is quite stretch however, the assumption is that the purchasing power of the dollar has not changed. | | Instructor Explanation: | Textbook pages 6-9. We assume that the currency will be stable over time. Inflation is an example. | | | | Comments: | | | |

Question 4. | Question : | (TCO 2) Transaction analysis results in the development of a journal entry. In the start-up of a business, the owner contributes $750,000 of cash. (1) Name the accounts impacted and how to use the format account name/debit or credit/dollar amount (10 points), and (2) explain how the Accounting Equation is impacted. (10 points) | | | Student Answer: | | The capital account

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