The balance sheet presents a company's financial position at a point of time. True False
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- Exercise 1-35 Accounting Concepts OBJECTIVE 06° A list of accounting concepts and related definitions is presented below. Concept Definition 1. Revenue a. Owners claim on the resources of a company 2, Expense b. The difference between revenues and expenses 3. Net income (1055) c. Increase in assets from the sale of goods or services 4, Dividend d. Economic resumes of a company 5. Asset e. Cost of assets consumed in the operation of a business 6, Liability f. Creditors' claims on the resources of a company 7. Stock holders, equity g. Distribution of earnings to stockholders Required: Match each of the concepts with its corresponding definitionIdentify the financial statement on which each of the following account categories would appear: the balance sheet (BS), the income statement (IS), or the retained earnings statement (RE). Table 3.21Compare The Home Depot and Lowes Using your answers for The Home Depot, Inc. (HD) in MAD 1-2 and Lowes Companies, Inc. (LOW) in MAD 1-3, compare and interpret Home Depots ratio of liabilities to stockholders equity to that of Lowes.
- 1.1 In column (1), indicate inwhich statement income statement (IS) or balance sheet (BS) the accountbelongs. 1.2 In column (2), indicatewhether the account is a current asset (CA), current liability (CL), expense(E), non-current asset (NCA), non-current liability (NCL), revenue (R) orsharehold equity (SE). The type of account must be in terms of IS and BSentries and not the basic accounting equation (BAE). (1) (2) Account name Statement Type of account Trade and other payables(Creditors) Trade receivables (Debtors) Accumulated depreciation Administrative expense Buildings Cash Ordinary share capital (atpar) Cost of goods sold Depreciation Equipment General expense Finance cost Inventories Land Long-term debt Machinery Short-term borrowings Operating expense Preference share capital Redeemable preference sharedividends Retained earnings Sales revenue Selling expense Taxation on profits Vehicle QUESTION 2 The following pre-adjusted balances have been extracted fromthe general ledger…PART II. FILL IN THE BLANKInstruction: Fill in the blank with the missing information.1. Revenues minus expenses equals _______________________.2. Resources owned by a company (such as cash, accounts receivable, vehicles) are reported on the balance sheet andare referred to as __________________.3. Obligations (amounts owed) are reported on the balance sheet and are referred to as ________________.4. Assets minus liabilities equals ___________________________________.5. Liabilities often have the word ________________ in their account title.6. ____________ term is associated with "left" or "left-side".7. ____________ term is associated with "right" or "right-side".8. The financial statement with a structure that is similar to the accounting equation is the __________________________.Read Financial Statement Analysis Case 3: Deere & Company and answer questions a) & b).
- 3. Amounts owed to a company by its customers would be:a. Accounts Receivable.b. Accounts Payable.c. Inventory.d. Prepaid Expenses.QA)Choose the correct answer: 2. Which is a shareholders' equity account in the statement of financial position? Select one: a. Dividends payable. b. Marketable securities c. Issued capital. d. Accumulated depreciation. 3. Making insurance payments in advance is an example of: Select one: A. An accrued receivable transaction. B. An accrued liability transaction. C. An unearned revenue transaction. D. A prepaid expense transaction 4. Cost of goods sold is: Select one: a. An asset account. b. A permanent equity account. c. An expense account. d. A revenue account.1 ) Prepare Income statement 2 ) Retained earnings statement 3 ) Statement of financial position. Show all three separetely.
- Financial statements are the second last product of the accounting process. (1) False (2) TrueMultiple choice 1. The income statement debit column exceeds the income statement credit column on a worksheet. This indicates: A. a net income for the company B. a net loss for the company C. mistakes were made in the preparation of the worksheet D. the owner's capital account decreased during the period
