Generally Accepted Accounting Principles and Owners Equity Essays

Generally Accepted Accounting Principles and Owners Equity Essays Generally Accepted Accounting Principles and Owners Equity Essay Generally Accepted Accounting Principles and Owners Equity Essay Chapter 7 Accounting Information Systems Questions 1. What is the right side of an account called? 2. What is the left side of an account called? 3. An organizational scheme used to classify accounts as assets, liabilities, or owners’ equity is known as what? 4. What journal is used to record both the account(s) to be debited and the account(s) to be credited? 5. A collection of specific asset, liability and owners’ equity accounts in known as what? 6. What type of entry is made to adjust the accounts for internal events prior to preparing financial statements? . What type of entry is made to close out a temporary account and transfer the balance to retained earnings? 8. What type of account has an opposite balance to the normal balance of its associated account? 9. Recording the appropriate part of a journal entry to the affected account is known as what process? 10. A listing of all general ledger accounts and their respective balances to ensure that debits equal cred its is known as what? Exercises E7. 1The following events occurred during the first month of business at a local marketing company. Indicate which of the events are accounting events and provide a short justification for your answer. A. The owner invested money from his savings account for start-up costs. B. Employees hired agree to sign a non-compete agreement. C. The owner pays the first and last month’s rent on office space. D. Computer equipment is purchased on account for each employee. E. Three employees attend the Chamber of Commerce meeting to generate sales contacts. F. A client pays for advertising services performed by the company. G. The office supply store across the street is planning a major advertising promotion next month. : E7. 2 Specify in the space provided the effect of each of the following accounting events on assets, liabilities, and owners’ equity. Use I for Increase, D for Decrease, and NA for Not Applicable. Owners AssetsLiabilities Equity ________________________A. Issued preferred stock for cash. ________________________B. Purchased office computers on account. ________________________C. Purchased computer supplies for cash. ________________________D. Returned defective supplies and received a cash refund. ________________________E. Made a payment on computers purchased above. ________________________F. Purchased inventory by making a cash down payment with the balance owed on open account. E7. 3For each of the accounting elements that follow (A-F), indicate in the space provided the appropriate number of the financial statement(s) where the element would appear. 1. Income statement 2. Statement of owners’ equity 3. Balance sheet 4. Statement of cash flows ________A. Cash balance in checking account ________B. Unused supplies ________C. Merchandise sold on account ________D. Stock issued ________E. Utilities expense ________F. Taxes payable E7. 4Various accounts are affected differently by debits and credits. For each of these accounts, sate whether it is increased or decrease by a debit or credit. Also indicate whether the normal balance is a debit balance or a credit balance. The first account is an example. AccountsIncreased byDecreased byNormal Balance A. SuppliesDebitCreditDebit B. Interest Payable C. Equipment D. Fees Earned E. Salaries Expense E7. 5For each of the following situations, prepare the adjusting entry for the month ended April 30 and indicate the effect each adjustment would have on net income. A. Marketing Unlimited has a $20,000 contract with a client to prepare a catalog describing the client’s various products. Payment was to be received when the catalog was completed in June. As of April 30, $9,000 worth of services had been performed. B. Donna’s Consulting, a decorating firm, has an agreement with an apartment developer to decorate the apartment offices and model apartments. Donna will be paid $12,000 upon completion of her decorating services. As of April 30, Donna has completed one-fourth of her decorating services. C. Grant Enterprises rents storage space to a tenant for $200 a month. The invoice for April’s storage fee had not been sent as of April 30. E7. For each of the following situations, prepare the adjusting entry for the month ended August 31 and indicated the effect each adjustment would have on net income. A. The August water bill for the Johnson Company arrived in the accounting department on September 2. The invoice totaled $135. B. Riverside Medical Clinic has a contract with a payroll provider for payroll services. Riverside pays its employees semi-monthly. The payroll provider charges Riverside $250 for each payroll it processes and bills on the first day of the month after the services are provided. C. Camaron, Inc. borrowed $2,000 on August 1. Camaron must repay the principal and interest of 9 percent annually 90 days from the date of the note. Camaron prepares monthly financial statements. E7. 7After its first year in business, Aaron Distributing, Inc. needs to prepare its financial statements. Given the following trial balance, prepare the income statement and statement of retained earnings for the year ended December 31, 2003. Dividends of $1,000 were paid during the year and are reflected in the trial balance. There were no additional capital stock transactions during the month. ____________________________________________________________ _____ AARON DISTRIBUTING, INC. Adjusted Trial Balance December 31, 2003 DebitsCredits Cash$6,140 Accounts receivable2,350 Prepaid insurance3,180 Vehicle12,500 Accumulated depreciation- vehicle$1,000 Office equipment25,400 Accumulated depreciation- office equipment3,630 Accounts payable1,930 Notes payable7,500 Wages payable2,170 Capital stock25,000 Retained earnings1,000 Fees earned45, 500 Advertising expense6,000 Depreciation expense4,630 Insurance expense1,200 Interest expense750 Maintenance expense2,450 Utilities expense5,780 Wages expense15,350 ______ Total$86,730$86,730 ___________________________________________________________ ______ E7. 8Refer to E7. 7. Prepare the balance sheet for Aaron Distributing, Inc. as of December 31, 2003. E7. 9Refer to E7. 7. Prepare the closing entries for Aaron Distributing, Inc. as of December 31, 2003. E7. 10The adjusted trial balance for Nick’s Golf Supplies follows. Determine the net income or loss for the month of November and the balance in the Retained Earnings account that would appear on the balance sheet. ____________________________________________________________ ______ NICK’S GOLF SUPPLIES Adjusted Trial Balance November 30, 2003 DebitsCredits Cash$1,340 Supplies2,870 Inventory19,590 Equipment15,225 Accumulated depreciation- equipment$10,875 Accounts payable2,440 Capital stock20,000 Retained earnings5,920 Sales16,000 Cost of goods sold10,500 Advertising expense100 Depreciation expense2,175 Supplies expense435 Wages expense3,000______ Total$55,235$55,235 ____________________________________________________________ ______ Problems P7. 1Kendall Corporation began operations on March 1, 2003 and completed the following transactions during its first month of operations. A. Issued common stock for $100,000. B. Paid $18,000 for a one-year lease on office space. C. Purchased office equipment costing $35,000 by paying $5,000 cash and signing a five-year note for the balance. D. Purchased office supplies on account, $750. E. Sent a bill for $4,500 to a customer for services performed. F. Received $1,000 from a customer for services to be performed next month. G. Paid employees for hours worked, $1,025. H. Paid half of the amount owed for office supplies in transaction (D), $375. I. Received, but did not pay, the monthly telephone bill, $275. J. Paid a dividend to owners, $2,000. Required: 1. Determine the effect of each of the preceding events on the accounting equation. . Prepare the general journal entries to record each of these events. Note you may want to set up T-accounts to keep track of some accounts. Do not prepare the adjusting entries. 3. Prepare the income statement for the period. 4. Prepare the statement of cash flows for the period. 5. Prepare the statement of retained earnings for the period. 6. Prepare the balance sheet at the end of the period. 7. Prepare the closing entries. P7. 2The following accounting events (A-I) affected the assets, liabilities, and owners’ equity of the Jackson Company during the fiscal year ended September 30, 2003. A. Purchased $23,400 in merchandise inventory for cash. B. Sold $45,500 in merchandise inventory to a customer for $68,250 cash. C. Purchased $16,900 in merchandise on open account. D. Sold $34,840 in merchandise inventory for $52,260 on open account. E. Received and paid the utility bill, $745. F. Paid employees $5,900 for wages earned. G. Received a partial payment from a customer on account, $37,700. H. Paid rent for the current month, $7,800. I. Recorded depreciation on store equipment, $3,900. Required: 1. Determine the effect of each of the preceding events on the accounting equation. 2. Prepare the general journal entries to record each of these events. Note you may want to set up T-accounts to keep track of some accounts. 3. Prepare the income statement for the period. 4. Prepare the statement of cash flows for the period (ignore beginning balances). P7. 3For each of the following items (A-L) indicate on which financial statement you would expect to find it. Some items may appear on more than one statement. 1. Income Statement 2. Statement of owners’ equity 3. Balance sheet 4. Statement of cash flows __________A. Cash, ending balance __________B. Sales to customers __________C. Accounts receivable _________D. Cash received from customers __________E. Cost of goods sold during the period __________F. Office supplies on hand __________G. Office supplies used during the period __________H. Ending retained earnings __________I. Taxes payable __________J. Dividends paid during the period __________K. Wages payable __________L. Cash paid for merchandise inventory P7. 4Everett Photography specializes in engagements and weddings, reunions, and family portraits. Everett is reviewing the following analysis of events provided by his accountant, but he cannot understand this analysis. Describe the events for Everett. A. Photo supplies debit, $2,000 Accounts payable credit, $2,000 B. Cash debit, $500. Unearned revenue credit, $500 C. Equipment debit, $5,000 Note payable, $5,000 D. Cash debit, $850 Revenue credit, $850 E. Accounts payable debit, $400 Cash credit, $400 F. Unearned revenue debit, $500 Revenue credit, $500 G. Accounts receivable debit, $2,500 Revenue credit, $2,500 H. Notes payable debit, $200 Cash credit, $200 I. Expense debit, $1,500 Photo supplies credit, $1,500 P7. 5Brandon’s Snow Removal Service has a fiscal year end of June 30. The unadjusted trial balance is followed by information for adjustments. ___________________________________________________________ ______ BRANDON’S SNOW REMOVAL SERVICE Unadjusted Trial Balance June 30, 2003 DebitsCredits Cash$10,140 Accounts receivable12,250 Supplies3,670 Prepaid insurance3,040 Buildings76,800 Accumulated depreciation- buildings$15,360 Equipment66,400 Accumulated depreciation- equipment13,280 Accounts payable1,755 Unearne d fees3,360 Note payable52,000 Capital stock50,000 Retained earnings1,960 Fees earned45,720 Advertising expense4,000 Repairs expense2,200 Supplies expense1,435 Wages expense3,500______ Total$183,435$183,435 ___________________________________________________________ ______ Adjustment data: A. Unused supplies on hand, $250. B. Depreciation on buildings, $3,840. C. Depreciation on equipment, $6,640. D. Unearned fees still unearned, $1,000. E. Salaries earned but not yet paid, $360. F. Accrued interest on the note, $430. G. Fees earned but not recorded and not received, $600. Required: 1. Prepare the adjusting entries. In some instances, it will be necessary to establish new accounts for items not shown on the unadjusted trial balance. 2. Determine the net income or loss for the period. 3. Prepare the closing entries. Case Select a company that is featured in this week’s issue of BusinessWeek. Using the company’s annual report, answer the following questions: A. Examine the balance sheet of this company. Which accounts have debit balances and which accounts have credit balances? B. Trace the net income from the income statement to the statement of owners’ equity. C. Trace the ending balance of retained earnings from the statement of owners’ equity to the balance sheet. D. Trace the ending balance of cash from the statement of cash flows to the balance sheet. E. What is the date for the end of the accounting cycle?

How to Pass the SAT Expert Prep Tips

How to Pass the SAT Expert Prep Tips SAT / ACT Prep Online Guides and Tips The SAT is one of the most important tests you’ll take in high school. When you take a test in class, there are clear guidelines for passing and failing - wouldn’t it be nice to have the same thing for the SAT? Here, I’ll talk about exactly what it means to pass the test (spoiler: it’s different for everybody) before giving you tips and strategies fohow to pass the SAT and get the score you need. What Does It Mean to â€Å"Pass† the SAT? To answer your question right off the bat (although I hope you keep reading - there’s a lot more to learn ) is that there is no official passing (or failing) score on the SAT. On this test, there’s only a range of possible scores - what constitutes an excellent, poor, or average score will depend heavily on your frame of reference. Ultimately, the most important thing that defines a â€Å"passing† SAT score is whether it’s good enough to get you into the colleges you’re applying to. This obviously varies widely by student. The bottom line? For your SAT score to be considered â€Å"passing,† it has to be high enough to get you into the schools you like. The problem is that this score will change not only by school, but also by student - determining your passing SAT score isn’t an exact science, especially because your college applications will be considered as a whole. Other components of your apps affect admissions officers’ expectations for your SAT scores. If the rest of your applications (e.g. your extracurriculars and GPA) are very strong, your SAT may not be weighed so heavily, for example. If your score is low enough, however, your application may get tossed out even if the rest of your app is strong. For the sake of this post, then, I’m going to define a â€Å"passing† SAT score as one that won’t get your application tossed out. Ideally, however, your SAT score will be one that helps (instead of hurts) your college applications. Keep reading to learn more about how to figure out these score benchmarks for yourself. How to Set Your Own SAT Passing Score Figuring out a passing score on the SAT means researching what scores are correlated with acceptance at all the schools you’re interested in. You can’t say for sure what scores will you get you in - there’s a lot more to your application than just standardized test scores - but you can look at how other students perform and whether or not certain SAT scores tend to get students into a school. Once you have this information for schools you’re interested in, you can use it to figure out benchmark passing scores for yourself.Here’s how you do it: You’ll have to set your own unique passing and target scores for them to be useful. Make a Preliminary List of Schools This doesn’t have to be a final list of the schools you’ll definitely send applications to. Even if you have a list of 8-10 schools you’re interested in, this is a good place to start. For this exercise to be most effective, try to select mostly â€Å"target† schools - schools where you think you’d have a fairly good chance of getting in. You can include 2-3 â€Å"safety† schools and 2-3 â€Å"reach† schools as well, as long as you maintain overall balance. If you select too many safety schools and you might set a passing score that’s too low, whereas too many reach schools may lead to a score that’s discouragingly high. The first time you do this, you may not have a great idea of what schools you’d identify as reach, target, and safety. This isn’t just okay - it’s kind of the point of this exercise. You can repeat it as many times as necessary throughout the college process, fine-tuning your list of schools as you go. Look Up Each School’s SAT Info Start by Googling â€Å"PrepScholar [name of school] SAT score† - the first non-ad link that comes up should be the one you want. An example of what your search results will look like - the first link that pops up here is the right one! The page will have the average SAT score and the 25th/75th percentile scores for students accepted to that particular school. Take down these numbers for each school. A 25th percentile score means that 25% of students at the school have a score at or below that number. A 75th percentile score means that 75% of students at the school have a score at or below that number Students with 75th percentile scores or above for a particular school usually have a good shot at getting in, barring any major with other parts of their application. Students with 25th percentile scores or below usually have other strong application components (e.g. high GPA, great essays) to boost their chances. Calculate the New SAT Score Out of 1600 Before you calculate your personal passing score, you need to convert the info from these pages to the current SAT scoring system. You can do this by taking each score and multiplying by â…”. Then, round to the nearest multiple of 10. If you took down a score of 1870, for example, you’d multiply by â…” to get 1247. Round to the nearest 10 to get 1250. Set Your Benchmark â€Å"Passing† Score This step is perhaps a bit more subjective, and as such, will vary by student - of course it’s important to use your best judgment when establishing your own benchmark scores. If you want to come to a passing SAT score, you’ll want to look at a school’s 25th percentile SAT scores. This is far from a safe bet, however - your chances of getting in will heavily depend on the strength of the rest of your application if your SAT score is at or around the 25th percentile. If your GPA is lower than average for a particular school, for example, your SAT score would have to be higher in order to make up for it. Ultimately, I think that the best SAT score to aim for isn’t the â€Å"passing† score, but a score that will help you stand out as a strong applicant. The 75th percentile is a sweet spot because you’d be more competitive (in terms of SAT scores) than  ¾ of students who are accepted to the school. Side note: If your typical SAT score is higher than the 75th percentile score, you might want to consider looking at more competitive schools - you want to aim as high as you reasonably can here (more competitive schools often mean better reputations, which tend to lead to better outcomes). Now that we’ve gotten that out of the way, here’s how to calculate both passing and ideal SAT score benchmarks for yourself: Take the averages of the scores you collected for each school. First the average of the 25th percentile scores, then the average of the 75th percentile scores. The 25th percentile average is your â€Å"passing† goal score - the minimum you should be aiming for. The 75th percentile score is your target score - the score that has a great chance of getting you accepted to the colleges on your list. What If You’re Worried About Your Ideal Score, or Even Your Passing Score? If the scores you’ve calculated seem intimidatingly high, don’t panic just yet! There are a few important things to keep in mind. First, your target score (the 75th percentile average) is an ideal goal. It’s supposed to be higher than what you’re scoring now (or maybe even what you think you can score), so don't panic even if it's considerably more than 100 points higher than your current score. If you’re already at or above that 75th percentile mark, it's a sign that you might be selling yourself short - consider looking at more competitive schools. On the other hand, if even the 25th percentile benchmark seems too high, consider re-evaluating your list of schools. You might want to look at colleges that are slightly less competitive. How to Pass the SAT: Tips and Strategies I’m going to split this section up into two parts meant for two different types of students: low-scorers and high-scorers. Here, I’m defining score parameters by the national performance standards: high scorers are at about 1200 and above (75th percentile nationally), whereas low scorers are at about 840 and below (25th percentile nationally). If your performance is closer to the average (1000), check out both sections and follow the guidelines that you find most useful. Let's move on to everything you need to know about how to pass the SAT. Worried about where to start? The following sections will help get you started in the right direction. Guidance for Low Scorers It’s hard to know where to start with prep if your scores are relatively low - how do you know what your primary issues are if you feel like you’re having a lot of trouble with the test? The biggest issue for low scorers is often significant gaps in content knowledge, so identifying and filling these gaps is often the first step for effective SAT prep. Other mistakes may be due to: Running out of time Misunderstanding the question Running out of time Careless errors Before you can practice effectively, it’s important to analyze and understand your mistakes - that is, figuring out which of the above issues are your biggest weaknesses before taking steps to address them. You’ll have to invest some time in some serious self-analysis involving a baseline to work from. Here are best practices for getting a solid baseline score and gaining info on your weaknesses: Take a full, timed, diagnostic practice test. Take note of which questions you missed. Tally the reasons for each incorrect question: Content Gap: Did you not have the information you needed to answer correctly? Timing Issue: Would you have gotten the question correct if you hadn’t run out of time? Question Misunderstanding: Would you have gotten the question correct if the question had been more clear? Careless Error: Would you have gotten the question correct if you had spent an extra couple of seconds checking your work? If you find that content knowledge is your biggest problem, you’ll want to turn to your class notes, textbooks, and SAT prep books for review - not just SAT practice materials. We also have a bunch of SAT content guides to get you started: 5 Tips for SAT Writing and Language Ultimate SAT Math Prep Guide Step-by-step SAT Essay Guide Once you’ve conquered major content problems, you can hone in on specific content areas and work on careless errors and timing issues. You’ll find tips for addressing those problems in the next section. Guidance for High Scorers If you’re fairly happy with your score but want to bring it up to the next level, you probably have a general idea of where your major strengths and weaknesses are on the SAT. With a relatively high score, you’re probably pretty strong on content overall. High scorers usually lose points due to these three issues: Carelessness: loss of focus leading to silly mistakes. Timing Problems: you simply run out of time to give each question its due. Minor Content Gaps: small areas of knowledge that you haven’t mastered 100%. If you want to approach that ideal target score, you should attack each of these issues. I’ll address each of these problems in this section, but you may want to check out our detailed guide for high scorers for more info. Carelessness It’s pretty easy to identify a question you’ve missed due to carelessness. You get that horrible feeling when you recognize that you would have gotten the question right, if only you’d paid a tiny bit more attention. Careless mistakes often occur when students aren’t actively reading. Start focusing your attention with these tips: Double-read each question and underline important words. Take notes on passages. In the math section, mark up diagrams with important info and write out your arithmetic. Double- check your answer before marking it down. Let’s avoid silly mistakes when possible, shall we? Timing Issues Running out of time at the end of sections? First, spend less time on easy questions - just keep an eye out for those careless errors. Next, skip tough questions and come back to them later. This doesn’t mean you shouldn’t guess if you’re out of time (there’s no guessing penalty, so you should definitely guess). If you’ve still got plenty of time to work through the section, though, mark the problem question and come back to it later. Filling in Content Gaps Before you can work on filling in content gaps, you have to determine where these gaps actually are. This means identifying which questions you get wrong in your practice, and more importantly, why you get them wrong. You can start this process by going over all your mistakes after each practice session. Keep a careful tally of each content area every time you identify an error (hint: most content errors happen on the math section). Once you figure out which content areas give you the most trouble, use your class notes, textbooks, or reliable SAT prep book to review this content. Come back and do more practice problems in this area until you’re confident in your understanding. Summary: How to Pass the SAT Unfortunately, there’s no easy answer when it comes to figuring out a passing score on the SAT. It’s different for each student - your idea of a passing or ideal score may even change over time as you continue to improve with dedicated SAT prep. The important thing is that you put in the research to figure out what schools you’re interested in and what you need to do to get there. The good news is that regardless of whether you’re a relatively low scorer or a relatively high scorer, there are plenty of things you can do to address your weaknesses to boost your performance. What’s Next? There are a lot of helpful materials available if you’re worried about â€Å"passing† the SAT. For an overview, read our guide with 15 tips for improving your SAT score. If you need a fun, refreshing way to study, learn about the six best SAT prep games. Maybe you’re looking for more detailed information. If that’s the case, check out our ultimate study guide for SAT prep. Want to improve your SAT score by 160 points?We have the industry's leading SAT prep program. Built by Harvard grads and SAT full scorers, the program learns your strengths and weaknesses through advanced statistics, then customizes your prep program to you so you get the most effective prep possible. Check out our 5-day free trial today: