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Accounting Exam Review: Chapter 1 - Transactions and Financial Statements, Cheat Sheet of Accounting

A comprehensive review of chapter 1 in an accounting course, covering fundamental concepts like the accounting equation, classification of accounts, normal balances, and financial statement preparation. It includes practice problems and journal entries to reinforce understanding of key principles. Suitable for high school students studying introductory accounting.

Typology: Cheat Sheet

2023/2024

Uploaded on 09/17/2024

bhavish-patel
bhavish-patel 🇺🇸

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Name:______________________ Class time (circle): 9:40 11:20
CHAPTER 1 EXAM REVIEW PROBLEMS
Problem 1: Effect of transactions on the accounting equation.
Jake Ordaz started Lascassas Landscaping in December, and he had the following transactions during the
first month. For each of the transactions below, indicate the impact that the transaction has on the total
assets, liabilities and owner’s equity of the company. An example is provided for you.
TRANSACTIONS ASSETS LIABILITIES OWNER’S
EQUITY
Example: On December 1, Jake invested $100,000
of cash and $150,000 of equipment in the
company.
Increases No Effect Increases
1. On Dec. 2nd, the company purchased $1,000
of supplies on credit from Staples.
2. On Dec. 3rd, the company provided
landscaping services to Smith Company for
$2,000 cash.
3. On Dec. 5th, the company paid Staples $500
related to the credit purchase on December 2nd.
4. On Dec. 6th, the company paid $2,400 for
insurance for 12 months on the company’s
equipment. This payment is for insurance
from January to December of the next year.
5. On Dec. 7th, the company paid Home Depot
$350 for equipment rental for equipment it had
used that week.
6. On Dec. 8th, the company provided $3,500 of
services to the City of Murfreesboro on credit.
7. On Dec. 10th, the company received $2,800
from Lassiter Company. The company will
provide services to Lassiter Company in
January.
8. On Dec. 26th, the company purchased
equipment for $5,000.
9. On Dec. 27th, the company received $3,500
from the City of Murfreesboro, in payment for
the services provided on Dec. 8th.
10. On Dec. 31st, the company paid an employee
$3,000 for wages for the month of December.
11. On Dec. 31st, Jake withdrew $2,000 from the
business.
Problem 2: Classifying accounts, normal balances and the financial statements
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Name:______________________ Class time (circle): 9:40 11:

CHAPTER 1 EXAM REVIEW PROBLEMS

Problem 1: Effect of transactions on the accounting equation. Jake Ordaz started Lascassas Landscaping in December, and he had the following transactions during the first month. For each of the transactions below, indicate the impact that the transaction has on the total assets, liabilities and owner’s equity of the company. An example is provided for you. TRANSACTIONS ASSETS LIABILITIES OWNER’S EQUITY Example: On December 1, Jake invested $100, of cash and $150,000 of equipment in the company. Increases No Effect Increases

  1. On Dec. 2nd, the company purchased $1, of supplies on credit from Staples.
  2. On Dec. 3rd, the company provided landscaping services to Smith Company for $2,000 cash.
  3. On Dec. 5th, the company paid Staples $ related to the credit purchase on December 2nd.
  4. On Dec. 6th, the company paid $2,400 for insurance for 12 months on the company’s equipment. This payment is for insurance from January to December of the next year.
  5. On Dec. 7th, the company paid Home Depot $350 for equipment rental for equipment it had used that week.
  6. On Dec. 8th, the company provided $3,500 of services to the City of Murfreesboro on credit.
  7. On Dec. 10th, the company received $2, from Lassiter Company. The company will provide services to Lassiter Company in January.
  8. On Dec. 26th, the company purchased equipment for $5,000.
  9. On Dec. 27th, the company received $3, from the City of Murfreesboro, in payment for the services provided on Dec. 8th.
  10. On Dec. 31st, the company paid an employee $3,000 for wages for the month of December.
  11. On Dec. 31st, Jake withdrew $2,000 from the business. Problem 2: Classifying accounts, normal balances and the financial statements

For the accounts below, indicate (1) the type of account, (2) whether the account has a normal debit or credit balance, (3) whether you would debit or credit the account to increase the balance of the account, and (4) identify the financial statement on which the account would appear. For type of account, select from: asset, liability, owner’s capital account, owner’s withdrawal account, revenue and expense. Account Title Type of Account Normal Balance Debit or Credit to Increase the account? On which financial statement does this account appear? Accounts Payable Accounts Receivable Cash Consulting Revenue Equipment Furniture Insurance Expense Interest Expense J. Richards, Capital J. Richards, Withdrawals Land Prepaid Insurance Prepaid Rent Rent Revenue Unearned Consulting Revenue Wage Expense

Problem 3 (continued) DATE ACCOUNT TITLE DEBIT CREDIT

Problem 4: Financial Statement Preparation Maria Goeble manages a consulting firm called Synergy Solutions, which began operations on July 1st. On July 31st, the company’s records show the following general ledger accounts and amounts for the month of July. Prepare in proper form an (1) income statement, (2) statement of owner’s equity, and (3) balance sheet. Space is provided below and on the next two pages. Accounts Payable 3,900 Notes Receivable 7, Accounts Receivable 10,500 Office Supplies 4, Advertising Expense 1,200 Prepaid Insurance 3, Cash 24,000 Rent Expense 6, Consulting Revenue 36,000 Rental Revenue 1, Equipment 12,000 Salaries Expense 9, M. Goeble, Capital 34,800 Unearned Revenue 90 0 M. Goeble, Withdrawals 6,000 Utilities Expense 60 0 Notes Payable 7,