Financing Activities:
The financing activity means those activities of business that increase the capital of business. As company needs finance to run the business, the company may demands funds from public, banks and from financial institutions.
Investing Activities:
The fixed assets are needed to run the business, as the product of the company can make only through machineries. The investing activity of business deals with the sale purchase of fixed assets and investment of the company.
Operating Activities:
Operating activities are also known as the core business activities of the business. The sale purchase and all the related activities of the business are considered as operating activity of the business.
To identify: The type of business activity.
Want to see the full answer?
Check out a sample textbook solutionChapter 1 Solutions
FINANCIAL ACCT.FUNDAMENTALS <CUSTOM LL>
- 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 definitionarrow_forwardExercise 1-31 Decisions Based on Accounting Information Decision-makers use accounting information in a wide variety Of decisions including the following: 1. Deciding whether or not to lend money to a business 2. Deciding whether or not an individual has paid enough in taxes 3. Deciding whether or not to place merchandise on sale in order to reduce inventory 4. Deciding whether Or not to invest in a business 5. Deciding whether or not to demand additional benefits for employees Required: Match each decision with one of the following decision-makers who is primarily responsible for the decision: a government (G), an investor (I), a labor union (U), business managers (M), or a bank (B).arrow_forwardPURPOSE OF ACCOUNTING Match the following users with the information needed. 1. Ownersa. Whether the firm can pay its bills on time 2. Managersb. Detailed, up-to-date information to measure business performance (and plan for future operations) 3. Creditorsc. To determine taxes to be paid and whether other regulations are met 4. Government agenciesd. The firms current financial conditionarrow_forward
- Cornerstone Exercise 1-15 Using the Accounting Equation At the beginning of the year, Morgan Company had total assets of 425,000 and total liabilities of 260,000. Required: Use the fundamental accounting equation to answer the following independent questions: What is total stockholders' equity at the beginning of the year? If, during the year, total assets increased by $73,000 and total liabilities increased by $32,000, what is the amount of total stockholders' equity at the end of the year? If, during the year, total assets decreased by $52,000 and total stockholders' equity increased by $35,000, what is the amount of total liabilities at the end of the year? If, during the year, total liabilities increased by $85,000 and total stockholders' equity decreased by $73,000, what is the amount of total assets at the end of the year?arrow_forwardList the classification of each of the following accounts as A (asset), L (liability), OE (owners equity), R (revenue), or E (expense). Write Debit or Credit to indicate the increase side, the decrease side, and the normal balance side. PART 1: The Accounting Cycle for a Service Business: Analyzing Business Transactionsarrow_forwardReturn on assets The financial statements of The Hershey Company (HSY) are shown in Exhibits 6 through 9 of this chapter. Based upon these statements, answer the following questions. 1. What art Hershey’s sales (in millions)?arrow_forward
- Appendix Completing an end-of-period spreadsheet Alert Security Services Co. offers security services to business clients. Complete the following end-of-period spreadsheet for Alert Security Services Co.: Appendix Financial statements from an end-of-period spreadsheet Based on the data in Exercise 4-25, prepare an income statement, statement of owners equity, and balance sheet for Alert Security Services Co.arrow_forwardComprehensive Problem 1 8 Net income. 31,425 Kelly Pitney began her consulting business. Kelly Consulting, on April 1, 20Y8. The accounting cycle for Kelly Consulting for April, including financial statements, was illustrated in this chapter During May, Kelly Consulting entered into the following transactions: May 3.Received cash from clients as an advance payment for services to be provided and recorded it as unearned tree 4,500 5.Received cash from clients on account 2,450. 9.Paid cash for a newspaper advertisement 225. 13.Raid Office Station Co for part of the debt incurred on April , 640. 15.Recorded services provided on account for the period May 1-15, 9,180. 16 Paid part-time receptionist for two weeks salary including the amount owed on April 30, 750. 17.Recorded cash from cash clients for fees earned during the period May 116, 8,360. Record the following transactions on Page 6 of the Journal 20.Purchased support on account 735. 21.Recorded services provided on account for the period May 1620. 4,820 25.Recorded cash from cash clients for fees earned for the period May 1723, 7,900 27.Received cash from clients on account 9,520. 28.Paid part-time receptionist for two weeks salary. 7S0. 30.Raid telephone bill for May. 260 31.Paid electricity bill for May, 810. 31.Recorded cash from cash clients tor lees earned for the period May 2031. 3,300. 31.Recorded services provided on account for the remainder of May, 2,650. 31.Paid dividends 10,500 Instructions 1.The chart of accounts foe Kelly Consulting is shown us Exhibit 9. and the post-closing trial balance as of April 30, 20Y8, is shown in Exhibit 17. for each account in the post-closing trial balance, enter the balance in the appropriate Balance column of a four-column account. Date the balances May 1. 20Y8. and place a check mark () in the Posting Reference column. Journalize each of the May transactions in a two-column journal starting cm Page of the journal and using Kelly Consultings chart of accounts. (Do not insert the account numbers in the journal at this time.) 2.Post the journal to a ledger of four-column accounts. 5.Prepare an unadjusted trial balance. 4.At the end of May, the following adjustment data were assembled. Analyze and use these data to complete parts (5) and (6). (a)Insurance expired during May is 275. (b)Supplies on hand on May II are 715. (c)Depreciation of office equipment for May is 330. (d)Accrued receptionist salary on May 31 is 325. (e)Rent expired during May is 1600. (f)Unearned fees on May 31 are 3,210 5.(Optional) Enter the unadjusted trial balance on an end-of-period spreadsheet and complete the spreadsheet 6.Journalize and post the adjusting entries. Record the adjusting entries on Page 7 of the journal. 7.Prepare an adjusted trial balance. 8.Prepare an income statement, a statement of stockholders equity, and a balance sheet. 9.Prepare and post the closing entries. Record the closing entries on Page 8 of the journal. Indicate closed accounts by inserting a line in both the Balance columns opposite the closing entry. 10.Prepare a post-closing trial balance.arrow_forwardBusiness emphasis Assume that you are considering developing a nationwide chain of women’s clothing stores. You have contacted a Seattle-based firm that specializes in financing new business ventures and enterprises. Such firms, called venture capital firms, finance new businesses in exchange for a percentage of the ownership. For each emphasis you listed in (1), provide an example of a real-world business using the same emphasis.arrow_forward
- Kelly Pitney began her consulting business, Kelly Consulting, on April 1, 2016. The accounting cycle for Kelly Consulting for April, including financial statements, was illustrated in this chapter. During May, Kelly Consulting entered into the following transactions: May 3. Received cash from clients as an advance payment for services to be provided and recorded it as unearned fees, 4,500. 5. Received cash from clients on account, 2,450. 9. Paid cash for a newspaper advertisement, 225. 13. Paid Office Station Co. for part of the debt incurred on April 5, 640. 15. Recorded services provided on account for the period May 115, 9,180. 16. Paid part-time receptionist for two weeks' salary including the amount owed on April 30, 750. 17. Recorded cash from cash clients for fees earned during the period May 116, 8,360. Record the following transactions on Page 6 of the journal: 20. Purchased supplies on account, 735. 21. Recorded services provided on account for the period May 1620, 4,820. 25. Recorded cash from cash clients for fees earned for the period May 1723, 7,900. 27. Received cash from clients on account, 9,520. 28. Paid part-time receptionist for two weeks' salary, 750. 30. Paid telephone bill for May, 260. 31. Paid electricity bill for May, 810. 31. Recorded cash from cash clients for fees earned for the period May 2631, 3,300. 31. Recorded services provided on account for the remainder of May, 2,650. 31. Kelly withdrew 10,500 for personal use. Instructions 1. The chart of accounts for Kelly Consulting is shown in Exhibit 9, and the post-closing trial balance as of April 30, 2016, is shown in Exhibit 17. For each account in the post-closing trial balance, enter the balance in the appropriate Balance column of a four-column account. Date the balances May 1, 2016, and place a check mark () in the Posting Reference column. Journalize each of the May transactions in a two-column journal starting on Page 5 of the journal and using Kelly Consultings chart of accounts. (Do not insert the account numbers in the journal at this time.) 2. Post the journal to a ledger of four-column accounts. 3. Prepare an unadjusted trial balance. 4. At the end of May, the following adjustment data were assembled. Analyze and use these data to complete parts (5) and (6). a. Insurance expired during May is 275. b. Supplies on hand on May 31 are 715. c. Depreciation of office equipment for May is 330. d. Accrued receptionist salary on May 31 is 325. e. Rent expired during May is 1,600. f. Unearned fees on May 31 are 3,210. 5. (Optional) Enter the unadjusted trial balance on an end-of-period spreadsheet and complete the spreadsheet. 6. Journalize and post the adjusting entries. Record the adjusting entries on Page 7 of the journal. 7. Prepare an adjusted trial balance. 8. Prepare an income statement, a statement of owners equity, and a balance sheet. 9. Prepare and post the closing entries. Record the closing entries on Page 8 of the journal. (Income Summary is account #33 in the chart of accounts.) Indicate closed accounts by inserting a line in both the Balance columns opposite the closing entry. 10. Prepare a post-closing trial balance.arrow_forwardCornerstone Exercise 2-20 Transaction Analysis Four transactions are listed below. CORNERSTONE 2.2 Sold goods to customers on credit. Collected amounts due from customers. Purchased supplies on account. Used supplies in operations of the business. Required: Prepare three columns labeled assets, liabilities, and stockholders equity. For each of the transactions, indicate whether the transaction increased (+). decreased (-). or had no effect (NE) on Assets, liabilities, or stockholders equity.arrow_forwardBrief Exercise 1-24 The Accounting Equation Financial information for three independent cases is as follows: The liabilities of Dent Company are $82,000, and its stockholders' equity is $120,000. What is the amount of Dents total assets? The total assets of Wayne Inc. are $55,000, and its stockholders' equity is $22,500. What is the amount of Waynes total liabilities? Gordon Companys total assets increased by $60,000 during the year, and its liabilities decreased by $35,000. Did Gordons stockholders' equity increase or decrease? By how much? Required: Determine the missing amount for each case.arrow_forward
- Corporate Financial AccountingAccountingISBN:9781305653535Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage LearningCornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage LearningCollege Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,
- College Accounting (Book Only): A Career ApproachAccountingISBN:9781337280570Author:Scott, Cathy J.Publisher:South-Western College PubSurvey of Accounting (Accounting I)AccountingISBN:9781305961883Author:Carl WarrenPublisher:Cengage LearningAccounting (Text Only)AccountingISBN:9781285743615Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning