accounting questions

5035 Words Nov 18th, 2013 21 Pages
1) As you have learned in this week’s readings the Accounting Equation is Assets = Liabilities + Owners’ Equity. Is the accounting equation true in all instances? Provide sample transactions from your own experiences to demonstrate the validity of the Accounting Equation.

2) What does the term account mean? What are the different classifications of accounts? How do the rules for debits and credits impact accounts? Please provide an example of how debits and credits impact accounts.

3) The balance sheet is a financial snap shot of a company at a particular point in time. The balance sheet lists the assets, liabilities, and equity of the company. Reflect on your personal financial situation, can you apply the concepts of
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3/12: Received $700 from a client, who was billed previously on March 4.
3/15: Paid $800 to the Journal Herald for advertising expense.
3/18: Acquired $9,000 of equipment from Park Central Outfitters by paying
$7,000 down and agreeing to remit the balance owed within the next
2 weeks, (Accounts Payable).
3/22: Received $300 cash from clients for services.
3/24: Paid $1,500 on account to Park Central Outfitters in partial settlement of the balance due from the transaction on March 18.
3/28: Rented a car from United Car Rental for use on March 28. Total charges amounted to $75, with United billing Burton for the amount due.
3/31: Paid $900 for March wages.
3/31: Processed a $600 cash withdrawal from the business for Joanne Burton.

a. Determine the impact of each of the preceding transactions on Burton’s assets, liabilities, and owner’s equity. See exhibit 1.5. Use the following format:

Assets = Liabilities + Owner’s Equity
Cash, Accounts Receivable, Land, Equipment Accounts Payable (+)Investments (+) Revenues (-) Withdrawals (-) Expenses

a. Record each transaction on a separate line. Calculate balances only after the last transaction has been recorded.
b. Prepare an income statement, a statement of owner’s equity, and a balance sheet, (See Exhibit 1.1, 1.3 and 1.4)

6. Recognition of normal balances
The following items appeared in
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