Accounting in Action: Summary of Questions by Study Objectives and Bloom'S Taxonomy

CHAPTER 1
ACCOUNTING IN ACTION
SUMMARY OF QUESTIONS BY STUDY OBJECTIVES AND BLOOMS TAXONOMY
Ite SO BT Ite SO BT Ite SO BT Ite SO BT Ite SO BT
True-Fa!e S"a"e#e$"!
1. 1 K 9. 2 K 17. 4 K 25. 6 K
sg
33. 1 K
2. 1 K 10. 2 K 18. 4 K 26. 6 K
sg
34. 2 K
3. 1 C 11. 2 K 19. 4 K 27. 7 K
sg
35. 3 K
4. 2 K 12. 2 K 20. 5 C 28. 7 C
sg
36. 4 C
5. 2 K 13. 2 K 21. 5 K 29. 7 C
sg
37. 5 K
6. 2 C 14. 2 K 22. 5 K 30. 7 C
sg
38. 6 K
7. 2 K 15. 3 K 23. 5 K 31. 8 K
sg
39. 7 K
8. 2 C 16. 4 K 24. 6 K 32. 8 K
sg
40. 8 K
Mu"%&e C'(%)e Que!"%($!
41. 1 K 69. 4 C 97. 6 K 125. 8 K
st
153. 1 K
42. 1 K 70. 4 K 98. 6 K 126. 8 K
st
154. 1 K
43. 1 K 71. 4 K 99. 6 K 127. 8 AP
sg
155. 2 K
44. 1 C 72. 4 C 100. 6 C 129. 8 AP
st
156. 2 K
45. 1 K 73. 4 K 101. 6 K 129. 8 AP
sg
157. 4 K
46. 1 K 74. 5 K 102. 6 C 130. 8 K
st
158. 5 K
47. 1 K 75. 5 K 103. 6 AP 131. 8 C
sg
159. 5 K
48. 1 K 76. 5 K 104. 6 AP 132. 8 K
sg
160. 6 K
49. 2 C 77. 5 K 105. 6 AP 133. 8 K
sg
161. 7 C
50. 2 C 78. 5 K 106. 6 AP 134. 8 AP
sg
162. 7 C
51. 2 C 79. 5 C 107. 6 AP 135. 8 AP
sg
163. 8 K
52. 2 C 80. 5 C 108. 7 C 136. 8 AP 164.
53. 2 C 81. 5 K 109. 7 AP 137. 8 AP 165.
54. 2 C 82. 5 K 110. 7 C 138. 8 AP 166.
a
55. 9 K 83. 5 C 111. 7 C 139. 8 AP 167.
a
56. 9 K 84. 5 K 112. 7 C 140. 8 AP 168.
a
57. 9 K 85. 5 K 113. 7 C 141. 8 AP 169.
a
58. 9 C 86. 5 K 114. 7 C 142. 8 AP 170.
59. 2 K 87. 5 K 115. 7 C 143. 8 AP 171.
60. 2 K 88. 6 K 116. 7 K 144. 8 AP 172.
61. 2 C 89. 6 K 117. 7 C 145. 8 AP 173.
62. 3 K 90. 6 K 118. 7 C 146. 8 AP 174.
63. 3 C 91. 6 C 119. 7 C 147. 8 AN 175.
64. 4 K 92. 6 K 120. 7 AN 148. 8 AN 176.
65. 4 K 93. 6 K 121. 7 C 149. 8 AN 177.
66. 4 C 94. 6 C 122. 8 C 150. 8 AN
67. 4 K 95. 6 K 123. 8 C 151. 8 AN
68. 4 K 96. 6 K 124. 8 K
sg
15 1 K
sg
This question also appeas in the !tu"# $ui"e.
Te!" Ba$* +(r A))(u$"%$, Pr%$)%&e!- Te$"' E.%"%($
st
This question also appeas in a sel%&test at the stu"ent 'o(panion )e*site.
a
This question 'o+es a topi' in an appen"i, to the 'hapte.
FOR INSTRUCTOR USE ONLY
1 - /
A''ounting in A'tion
SUMMARY OF QUESTIONS BY STUDY OBJECTIVES AND BLOOMS TAXONOMY
Br%e+ E0er)%!e!
178. 2 C 181. 6 AP 184. 7 C 187. 8 AP
179. 6 K 182. 6 AP 185. 8 AP 188. 8 AP
180. 6 K 182. 6 C 418
6.
8 C
E0er)%!e!
189. 2-4 K 197. 6 C 205. 7 C 213. 8 AP 221. 8 AN
190. 6 C 198. 6-7 C 206. 7 C 214. 8 AP 222. 8 C
191. 6 C 199. 6-7 C 207. 7 AP 215. 8 AP 223. 8 AP
192. 6 AP 200. 6-7 AP 208. 7 C 216. 8 AN 224. 8 AP
193. 6 C 201. 7 AP 209. 7 C 217. 8 AP 225. 8 AP
194. 6 AP 202. 7 AP 210. 7 C 218. 8 AP
195. 6 AN 203. 7 C 211. 7 C 219. 8 C
196. 6 AN 204. 7 AN 212. 7 C 220. 8 AP
C(#&e"%($ S"a"e#e$"!
226. 1 K 228. 2 K 230. 4 K 232. 5 K 234. 6 K
227. 2 K 229. 2 K 231. 4 K 233. 6 K 235. 8 K
SUMMARY OF STUDY OBJECTIVES BY QUESTION TYPE
Ite Ty Ite Ty Ite Ty Ite Ty Ite Ty Ite Ty Ite Typ
S"u.1 O23e)"%4e 1
1. T. 33. T. 43. /C 46. /C 152. /C 226. C
2. T. 41. /C 44. /C 47. /C 153. /C
3. T. 42. /C 45. /C 48. /C 154. /C
S"u.1 O23e)"%4e /
4. T. 8. T. 12. T. 49. /C 53. /C 61. /C 175. 0,
5. T. 9. T. 13. T. 50. /C 54. /C 155. /C 227. C
6. T. 10. T. 14. T. 51. /C 59. /C 156. /C 228. C
7. T. 11. T. 34. T. 52. /C 60. /C 178. 10 229. C
S"u.1 O23e)"%4e 5
15. T. 35. T. 62. /C 63. /C
S"u.1 O23e)"%4e 6
16. T. 19. T. 65. /C 68. /C 71. /C 157. /C 231. C
17. T. 36. T. 66. /C 69. /C 72. /C 189. 0,
18. T. 64. /C 67. /C 70. /C 73. /C 230. C
S"u.1 O23e)"%4e 7
20. T. 37. T. 77. /C 81. /C 85. /C 159. /C
21. T. 74. /C 78. /C 82. /C 86. /C 232. C
22. T. 75. /C 79. /C 83. /C 87. /C
23. T. 76. /C 80. /C 84. /C 158. /C
1 - 5
Te!" Ba$* +(r A))(u$"%$, Pr%$)%&e!- Te$"' E.%"%($
SUMMARY OF STUDY OBJECTIVES BY QUESTION TYPE
S"u.1 O23e)"%4e 8
24. T. 91. /C 98. /C 105. /C 182. 10 195. 0, 234. C
25. T. 92. /C 99. /C 106. /C 183. 10 196. 0,
26. T. 93. /C 100. /C 107. /C 190. 0, 197. 0,
38. T. 94. /C 101. /C 160. /C 191. 0, 198. 0,
88. /C 95. /C 102. /C 179. 10 192. 0, 199. 0,
89. /C 96. /C 103. /C 180. 10 193. 0, 200. 0,
90. /C 97. /C 104. /C 181. 10 194. 0, 233. C
S"u.1 O23e)"%4e 9
27. T. 109. /C 115. /C 121. /C 186. 0, 206. 0, 198. 0,
28. T. 110. /C 116. /C 161. /C 201. 0, 207. 0, 213. 0,
29. T. 111. /C 117. /C 162. /C 202. 0, 208. 0, 214. 0,
30. T. 112. /C 118. /C 184. 10 203. 0, 209. 0, 215. 0,
39. T. 113. /C 119. /C 184. 0, 204. 0, 196. 0, 216. 0,
108. /C 114. /C 120. /C 185. 0, 205. 0, 197. 0, 217. 0,
S"u.1 O23e)"%4e :
31. T. 129. /C 139. /C 149. /C 170. /C 187. 10 221. 0,
32. T. 130. /C 140. /C 150. /C 171. /C 188. 10 222. 0,
40. T. 131. /C 141. /C 151. /C 172. /C 199. 0, 223. 0,
122. /C 132. /C 142. /C 163. /C 173. /C 200. 0, 224. 0,
123. /C 133. /C 143. /C 164. /C 174. /C 201. 0, 225. 0,
124. /C 134. /C 144. /C 165. /C 175. /C 202. 0, 235. C
125. /C 135. /C 145. /C 166. /C 176. /C 217. 0,
126. /C 136. /C 146. /C 167. /C 177. /C 218. 0,
127. /C 137. /C 147. /C 168. /C 185. 10 219. 0,
128. /C 138. /C 148. /C 169. /C 186. 10 220. 0,
S"u.1 O23e)"%4e ;
a
55. /C
a
56. /C
a
57. /C
a
58. /C
Note2 T. 3 Tue&.alse 10 3 1ie% 0,e'ise C 3 Co(pletion
/C 3 /ultiple Choi'e 0, 3 0,e'ise
This 'hapte also 'ontains one set o% ten /at'hing questions an" !hot&Ans)e 0ssa# questions.
A su((a# ta*le o% all leaning out'o(es- in'lu"ing AAC!1- A4CPA- an" 4/A po%essional
stan"a"s- is a+aila*le on the 5e#gan"t Accounting Principles 9e instu'to )e* site.
1 - 6
CHAPTER STUDY OBJECTIVES
1. Explain what accounting is. A''ounting is an in%o(ation s#ste( that i"enti%ies- e'o"s-
an" 'o((uni'ates the e'ono(i' e+ents o% an ogani6ation to inteeste" uses.
2. Identify the users and uses of accounting. The (a7o uses an" uses o% a''ounting ae2
8a9 /anage(ent uses a''ounting in%o(ation in planning- 'ontolling- an" e+aluating
*usiness opeations. 8*9 4n+estos 8o)nes9 "e'i"e )hethe to *u#- hol"- o sell thei %inan'ial
inteests on the *asis o% a''ounting "ata. 8'9 Ce"itos 8supplies an" *an:es9 e+aluate the
is:s o% ganting 'e"it o len"ing (one# on the *asis o% a''ounting in%o(ation. ;the goups
that use a''ounting in%o(ation ae ta,ing authoities- egulato# agen'ies- 'usto(es- la*o
unions- an" e'ono(i' plannes.
3. Understand why ethics is a fundamental business concept. 0thi's ae the stan"a"s o%
'on"u't *# )hi'h a'tions ae 7u"ge" as ight o )ong. 4% #ou 'annot "epen" on the honest#
o% the in"i+i"uals #ou "eal )ith- e%%e'ti+e 'o((uni'ation an" e'ono(i' a'ti+it# )oul" *e
i(possi*le- an" in%o(ation )oul" ha+e no 'e"i*ilit#.
4. Explain generally accepted accounting principles and the cost principle. $eneall#
a''epte" a''ounting pin'iples ae a 'o((on set o% stan"a"s use" *# a''ountants. The
'ost pin'iple states that 'o(panies shoul" e'o" assets at thei 'ost.
5. Explain the monetary unit assumption and the economic entity assumption. The
(oneta# unit assu(ption equies that 'o(panies in'lu"e in the a''ounting e'o"s onl#
tansa'tion "ata that 'an *e e,pesse" in te(s o% (one#. The e'ono(i' entit# assu(ption
equies that the a'ti+ities o% ea'h e'ono(i' entit# *e :ept sepaate %o( the a'ti+ities o% its
o)ne an" othe e'ono(i' entities.
6. State the accounting equation, and define assets, liabilities, and owner's equity. The
*asi' a''ounting equation is2
Assets 3 <ia*ilities = ;)ne>s 0quit#
Assets ae esou'es o)ne" *# a *usiness. <ia*ilities ae 'e"itoship 'lai(s on total assets.
;)ne>s equit# is the o)neship 'lai( on total assets.
7. Analye the effects of business transactions on the accounting equation. 0a'h *usiness
tansa'tion (ust ha+e a "ual e%%e't on the a''ounting equation. .o e,a(ple- i% an in"i+i"ual
asset in'eases- thee (ust *e a 'oespon"ing 819 "e'ease in anothe asset- o 829 in'ease
in a spe'i%i' lia*ilit#- o 839 in'ease in o)ne>s equit#.
8. Understand the four financial statements and how they are prepared. An in'o(e
state(ent pesents the e+enues an" e,penses o% a 'o(pan# %o a spe'i%ie" peio" o% ti(e.
An o)ne>s equit# state(ent su((ai6es the 'hanges in o)ne>s equit# that ha+e o''ue"
%o a spe'i%i' peio" o% ti(e. A *alan'e sheet epots the assets- lia*ilities- an" o)ne>s equit#
o% a *usiness at a spe'i%i' "ate. A state(ent o% 'ash %lo)s su((ai6es in%o(ation a*out the
'ash in%lo)s 8e'eipts9 an" out%lo)s 8pa#(ents9 %o a spe'i%i' peio" o% ti(e.
a
9. Explain the career opportunities in accounting. A''ounting o%%es (an# "i%%eent 7o*s in
%iel"s su'h as pu*li' an" pi+ate a''ounting- go+en(ent- an" %oensi' a''ounting.
A''ounting is a popula (a7o *e'ause thee ae (an# "i%%eent t#pes o% 7o*s- )ith unli(ite"
potential %o 'aee a"+an'e(ent.
1 - 7
Te!" Ba$* +(r A))(u$"%$, Pr%$)%&e!- Te$"' E.%"%($
TRUE-FALSE STATEMENTS
1. ;)nes o% *usiness %i(s ae the onl# people )ho nee" a''ounting in%o(ation.
Ans2 . !;1 1T2 K ?i%%i'ult#2 0as# T;T2 .5 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2 @epoting
2. Tansa'tions that 'an *e (easue" in "ollas an" 'ents ae e'o"e" in the %inan'ial
in%o(ation s#ste(.
Ans2 T !;1 1T2 K ?i%%i'ult#2 0as# T;T2 .5 (in AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2 @epoting
3. The hiing o% a ne) 'o(pan# pesi"ent is an e'ono(i' e+ent e'o"e" *# the %inan'ial
in%o(ation s#ste(.
Ans2 . !;1 1T2 C ?i%%i'ult#2 0as# T;T2 .5 (in AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2 @epoting
4. /anage(ent o% a *usiness entepise is the (a7o e,tenal use o% in%o(ation.
Ans2 . !;2 1T2 K ?i%%i'ult#2 0as# T;T2 .5 (in AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2 @epoting
5. A''ounting 'o((uni'ates %inan'ial in%o(ation a*out a *usiness entepise to *oth
intenal an" e,tenal uses.
Ans2 T !;2 1T2 K ?i%%i'ult#2 0as# T;T2 .5 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2 @epoting
6. A''ounting in%o(ation is use" onl# *# e,tenal uses )ith a %inan'ial inteest in a
*usiness entepise.
Ans2 . !;2 1T2 C ?i%%i'ult#2 0as# T;T2 .5 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2 @epoting
7. .inan'ial state(ents ae the (a7o (eans o% 'o((uni'ating a''ounting in%o(ation to
inteeste" paties.
8. 1oo::eeping an" a''ounting ae one an" the sa(e *e'ause the *oo::eeping %un'tion
in'lu"es the a''ounting po'ess.
9. The oigins o% a''ounting ae atti*ute" to <u'a Pa'ioli- a %a(ous (athe(ati'ian.
10. The stu"# o% a''ounting )ill *e use%ul onl# i% a stu"ent is inteeste" in )o:ing %o a po%it&
oiente" *usiness %i(.
11. Pi+ate a''ountants ae a''ountants )ho ae not e(plo#ees o% *usiness entepises.
Ans2 . !;2 1T2K ?i%%i'ult#2 0as# T;T2 .5 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2 @epoting
12. The stu"# o% a''ounting is not use%ul %o a *usiness 'aee unless #ou 'aee o*7e'ti+e is
to *e'o(e an a''ountant.
13. A )o:ing :no)le"ge o% a''ounting is not ele+ant to a la)#e o an a'hite't.
14. 0,pessing an opinion as to the %ainess o% the in%o(ation pesente" in %inan'ial
state(ents is a se+i'e pe%o(e" *# CPAs.
1 - 8
15. A''ountants el# on a %un"a(ental *usiness 'on'eptAethi'al *eha+ioAin epoting
%inan'ial in%o(ation.
16. The pi(a# a''ounting stan"a"&setting *o"# in the Bnite" !tates is the 4ntenational
A''ounting !tan"a"s 1oa".
17. The .inan'ial A''ounting !tan"a"s 1oa" is a pat o% the !e'uities an" 0,'hange
Co((ission.
18. The !e'uities an" 0,'hange Co((ission o+esees B.!. %inan'ial (a:ets an"
a''ounting stan"a"&setting *o"ies.
19. The 'ost an" %ai (a:et +alue o% an asset ae the sa(e at the ti(e o% a'quisition an" in
all su*sequent peio"s.
20. 0+en though a patneship is not a sepaate legal entit#- %o a''ounting puposes the
patneship a%%ais shoul" *e :ept sepaate %o( the pesonal a'ti+ities o% the o)nes.
Ans2 T !;5 1T2 C ?i%%i'ult#C 0as# T;T2 .5 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2 @epoting
21. A patneship (ust ha+e (oe than one o)ne.
22. The e'ono(i' entit# assu(ption equies that the a'ti+ities o% an entit# *e :ept sepaate
an" "istin't %o( the a'ti+ities o% its o)ne an" all othe e'ono(i' entities.
23. The (oneta# unit assu(ption states that tansa'tions that 'an *e (easue" in te(s o%
(one# shoul" *e e'o"e" in the a''ounting e'o"s.
24. 4n o"e to possess %utue se+i'e potential- an asset (ust ha+e ph#si'al su*stan'e.
25. ;)nes> 'lai(s to total *usiness assets ta:e pe'e"en'e o+e the 'lai(s o% 'e"itos
*e'ause o)nes in+est assets in the *usiness an" ae lia*le %o losses.
26. The *asi' a''ounting equation states that Assets 3 <ia*ilities.
27. A''ountants e'o" *oth intenal an" e,tenal tansa'tions.
28. 4ntenal tansa'tions "o not a%%e't the *asi' a''ounting equation *e'ause the# ae
e'ono(i' e+ents that o''u entiel# )ithin one 'o(pan#.
1 - 9
Te!" Ba$* +(r A))(u$"%$, Pr%$)%&e!- Te$"' E.%"%($
29. The pu'hase o% stoe equip(ent %o 'ash e"u'es the o)ne>s equit# *# an equal
a(ount.
30. The pu'hase o% o%%i'e equip(ent on 'e"it in'eases total assets an" total lia*ilities.
Ans2 T !;7 1T2 C ?i%%i'ult#2 0as# T;T2 .5 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2 @epoting
31. The pi(a# pupose o% the state(ent o% 'ash %lo)s is to po+i"e in%o(ation a*out the
'ash e'eipts an" 'ash pa#(ents o% a 'o(pan# "uing a peio".
32. Net in'o(e %o the peio" is "ete(ine" *# su*ta'ting total e,penses an" "a)ings %o(
total e+enues.
33. 4"enti%#ing is the po'ess o% :eeping a 'honologi'al "ia# o% e+ents (easue" in "ollas
an" 'ents.
34. /anage(ent 'onsulting in'lu"es e,a(ining the %inan'ial state(ents o% 'o(panies an"
e,pessing an opinion as to the %ainess o% thei pesentation.
Ans2 . !;2 1T2 K ?i%%i'ult#C 0as# T;T2 .5 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2 @epoting
35. A''ountants "o not ha+e to )o# a*out issues o% ethi's.
Ans2 . !;3 1T2 K ?i%%i'ult#2 0as# T;T2 .5 (in. AAC!12 0thi's A4CPA 112 Citi'al Thin:ing A4CPA .N2 @epoting
36. At the ti(e an asset is a'quie"- 'ost an" %ai +alue shoul" *e the sa(e.
Ans2 T !;4 1T2 C ?i%%i'ult#2 0as# T;T2 .5 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2 @epoting
37. The (oneta# unit assu(ption equies that all "olla a(ounts *e oun"e" to the neaest
"olla.
38. The *asi' a''ounting equation is in *alan'e )hen the 'e"ito an" o)neship 'lai(s
against the *usiness equal the assets.
39. 0,tenal tansa'tions in+ol+e e'ono(i' e+ents *et)een the 'o(pan# an" so(e othe
entepise o pat#.
40. 4n the o)ne>s equit# state(ent- e+enues ae liste" %ist- %ollo)e" *# e,penses- an" net
in'o(e 8o net loss9.
1 - :
A$!<er! "( True-Fa!e S"a"e#e$"!
I"e# A$!= I"e# A$!= I"e# A$!= I"e# A$!= I"e# A$!= I"e# A$!= I"e# A$!=
1. . 7. T 13. . 19. . 25. . 31. T 37. .
2. T 8. . 14. T 20. T 26. . 32. . 38. T
3. . 9. T 15. T 21. T 27. T 33. . 39. T
4. . 10. . 16. . 22. T 28. . 34. . 40. .
5. T 11. . 17. . 23. T 29. . 35. .
6. . 12. . 18. T 24. . 30. T 36. T
MULTIPLE CHOICE QUESTIONS
41. A''ountants e%e to an e'ono(i' e+ent as a
a. pu'hase.
*. sale.
'. tansa'tion.
". 'hange in o)neship.
Ans2 ' !;1 1T2 K ?i%%i'ult#2 0as# T;T2 1.0 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2 @epoting
42. The po'ess o% e'o"ing tansa'tions has *e'o(e (oe e%%i'ient *e'ause
a. %e)e e+ents 'an *e quanti%ie" in %inan'ial te(s.
*. 'o(putes ae use" in po'essing *usiness e+ents.
'. (oe people ha+e *een hie" to e'o" *usiness tansa'tions.
". *usiness e+ents ae e'o"e" onl# at the en" o% the #ea.
Ans2 * !;1 1T2 K ?i%%i'ult#2 0as# T;T2 1.0 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2 @epoting
43. Co((uni'ation o% e'ono(i' e+ents is the pat o% the a''ounting po'ess that in+ol+es
a. i"enti%#ing e'ono(i' e+ents.
*. quanti%#ing tansa'tions into "ollas an" 'ents.
'. pepaing a''ounting epots.
". e'o"ing an" 'lassi%#ing in%o(ation.
44. 5hi'h o% the %ollo)ing e+ents 'annot *e quanti%ie" into "ollas an" 'ents an" e'o"e" as
an a''ounting tansa'tionD
a. The appoint(ent o% a ne) CPA %i( to pe%o( an au"it.
*. The pu'hase o% a ne) 'o(pute.
'. The sale o% stoe equip(ent.
". Pa#(ent o% in'o(e ta,es.
Ans2 a !;1 1T2 C ?i%%i'ult#2 0as# T;T2 1.0 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2 @epoting
45. The use o% 'o(putes in e'o"ing *usiness e+ents
a. has (a"e the e'o"ing po'ess (oe e%%i'ient.
*. "oes not use the sa(e pin'iples as (anual a''ounting s#ste(s.
'. has geatl# i(pa'te" the i"enti%i'ation stage o% the a''ounting po'ess.
". is e'ono(i'al onl# %o lage *usinesses.
Ans2 a !;1 1T2 K ?i%%i'ult#2 0as# T;T2 1.0 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2 @epoting
1 - ;
Te!" Ba$* +(r A))(u$"%$, Pr%$)%&e!- Te$"' E.%"%($
46. The a''ounting po'ess in+ol+es all o% the %ollo)ing e,'ept
a. i"enti%#ing e'ono(i' tansa'tions that ae ele+ant to the *usiness.
*. 'o((uni'ating %inan'ial in%o(ation to uses *# pepaing %inan'ial epots.
'. e'o"ing nonquanti%ia*le e'ono(i' e+ents.
". anal#6ing an" intepeting %inan'ial epots.
47. The a''ounting po'ess is 'oe'tl# sequen'e" as
a. i"enti%i'ation- 'o((uni'ation- e'o"ing.
*. e'o"ing- 'o((uni'ation- i"enti%i'ation.
'. i"enti%i'ation- e'o"ing- 'o((uni'ation.
". 'o((uni'ation- e'o"ing- i"enti%i'ation.
48. 5hi'h o% the %ollo)ing te'hniques ae not use" *# a''ountants to intepet an" epot
%inan'ial in%o(ationD
a. $aphs.
*. !pe'ial (e(os %o ea'h 'lass o% e,tenal uses.
'. Chats.
". @atios.
49. 5hi'h o% the %ollo)ing )oul" not *e 'onsi"ee" an intenal use o% a''ounting "ata %o the
$E4 Co(pan#D
a. Pesi"ent o% the 'o(pan#.
*. Po"u'tion (anage.
'. /e'han"ise in+ento# 'le:.
". Pesi"ent o% the e(plo#ees> la*o union.
Ans2 " !;2 1T2 C ?i%%i'ult#2 0as# T;T2 1.0 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2 @epoting
50. 5hi'h o% the %ollo)ing )oul" not *e 'onsi"ee" an e,tenal use o% a''ounting "ata %o the
$E4 Co(pan#D
a. 4ntenal @e+enue !e+i'e Agent.
*. /anage(ent.
'. Ce"itos.
". Custo(es.
Ans2 * !;2 1T2 C ?i%%i'ult#2 0as# T;T2 1.0 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2 @epoting
51. 5hi'h o% the %ollo)ing )oul" not *e 'onsi"ee" intenal uses o% a''ounting "ata %o a
'o(pan#D
a. The pesi"ent o% a 'o(pan#.
*. The 'ontolle o% a 'o(pan#.
'. Ce"itos o% a 'o(pan#.
". !ales(en o% the 'o(pan#.
Ans2 ' !;2 1T2 C ?i%%i'ult#2 0as# T;T2 1.0 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2 @epoting
1 - 1>
52. 5hi'h o% the %ollo)ing is an e,tenal use o% a''ounting in%o(ationD
a. <a*o unions.
*. .inan'e "ie'tos.
'. Co(pan# o%%i'es.
". /anages.
53. 5hi'h one o% the %ollo)ing is not an e,tenal use o% a''ounting in%o(ationD
a. @egulato# agen'ies.
*. Custo(es.
'. 4n+estos.
". All o% these ae e,tenal uses.
54. 1oo::eeping "i%%es %o( a''ounting in that *oo::eeping pi(ail# in+ol+es )hi'h pat o%
the a''ounting po'essD
a. 4"enti%i'ation.
*. Co((uni'ation.
'. @e'o"ing.
". Anal#sis.
a
55. All o% the %ollo)ing ae se+i'es o%%ee" *# pu*li' a''ountants e,'ept
a. *u"geting.
*. au"iting.
'. ta, planning.
". 'onsulting.
a
56. 5hi'h list *elo) *est "es'i*es the (a7o se+i'es pe%o(e" *# pu*li' a''ountantsD
a. 1oo::eeping- (eges- *u"gets.
*. 0(plo#ee taining- au"iting- *oo::eeping.
'. Au"iting- ta,ation- (anage(ent 'onsulting.
". Cost a''ounting- po"u'tion s'he"uling- e'uiting.
a
57. Pepaing ta, etuns an" engaging in ta, planning is pe%o(e" *#
a. pu*li' a''ountants onl#.
*. pi+ate a''ountants onl#.
'. *oth pu*li' an" pi+ate a''ountants.
". 4@! a''ountants onl#.
1 - 11
Te!" Ba$* +(r A))(u$"%$, Pr%$)%&e!- Te$"' E.%"%($
a
58. A pi+ate a''ountant 'an pe%o( (an# a'ti+ities in a *usiness ogani6ation *ut )oul" not
)o: in
a. *u"geting.
*. a''ounting in%o(ation s#ste(s.
'. e,tenal au"iting.
". ta, a''ounting.
59. The oigins o% a''ounting ae geneall# atti*ute" to the )o: o%
a. Chistophe Colu(*us.
*. A*ne ?ou*le"a#.
'. <u'a Pa'ioli.
". <eona"o "a Fin'i.
60. .inan'ial a''ounting po+i"es e'ono(i' an" %inan'ial in%o(ation %o all o% the %ollo)ing
except
a. 'e"itos.
*. in+estos.
'. (anages.
". othe e,tenal uses.
61. The %inal step in sol+ing an ethi'al "ile((a is to
a. i"enti%# an" anal#6e the pin'ipal ele(ents in the situation.
*. e'ogni6e an ethi'al situation.
'. i"enti%# the altenati+es an" )eigh the i(pa't o% ea'h altenati+e on sta:ehol"es.
". e'ogni6e the ethi'al issues in+ol+e".
62. The %ist step in sol+ing an ethi'al "ile((a is to
a. i"enti%# an" anal#6e the pin'ipal ele(ents in the situation.
*. i"enti%# the altenati+es.
'. e'ogni6e an ethi'al situation an" the ethi'al issues in+ol+e".
". )eigh the i(pa't o% ea'h altenati+e on +aious sta:ehol"es.
Ans2 ' !;3 1T2 K ?i%%i'ult#2 0as# T;T2 1.0 (in. AAC!12 0thi's A4CPA 112 Citi'al Thin:ing A4CPA .N2 @epoting
63. 0thi's ae the stan"a"s o% 'on"u't *# )hi'h one>s a'tions ae 7u"ge" as
a. ight o )ong.
*. honest o "ishonest.
'. %ai o un%ai.
". all o% these.
Ans2 " !;3 1T2 C ?i%%i'ult#2 0as# T;T2 1.0 (in. AAC!12 0thi's A4CPA 112 Citi'al Thin:ing A4CPA .N2 @epoting
64. $eneall# a''epte" a''ounting pin'iples ae
a. in'o(e ta, egulations o% the 4ntenal @e+enue !e+i'e.
*. stan"a"s that in"i'ate ho) to epot e'ono(i' e+ents.
'. theoies that ae *ase" on ph#si'al la)s o% the uni+ese.
". pin'iples that ha+e *een po+en 'oe't *# a'a"e(i' esea'hes.
1 - 1/
65. The 'ost pin'iple equies that )hen assets ae a'quie"- the# *e e'o"e" at
a. appaisal +alue.
*. 'ost.
'. (a:et pi'e.
". *oo: +alue.
66. The 'ost o% an asset an" its %ai +alue ae
a. ne+e the sa(e.
*. the sa(e )hen the asset is sol".
'. iele+ant )hen the asset is use" *# the *usiness in its opeations.
". the sa(e on the "ate o% a'quisition.
67. The *o"# o% theo# un"el#ing a''ounting is not *ase" on
a. ph#si'al la)s o% natue.
*. 'on'epts.
'. pin'iples.
". "e%initions.
68. The pi+ate se'to ogani6ation in+ol+e" in "e+eloping a''ounting pin'iples is the
a. .easi*le A''ounting !tan"a"s 1o"#.
*. .inan'ial A''ounting !tu"ies 1oa".
'. .inan'ial A''ounting !tan"a"s 1oa".
". .inan'ial Au"itos> !tan"a"s 1o"#.
69. The !0C an" .A!1 ae t)o ogani6ations that ae pi(ail# esponsi*le %o esta*lishing
geneall# a''epte" a''ounting pin'iples. 4t is tue that
a. the# ae *oth go+en(ental agen'ies.
*. the !0C is a pi+ate ogani6ation o% a''ountants.
'. the !0C o%ten (an"ates gui"elines )hen no a''ounting pin'iples e,ist.
". the !0C an" .A!1 ael# 'oopeate in "e+eloping a''ounting stan"a"s.
70. $AAP stan"s %o
a. $eneall# A''epte" Au"iting Po'e"ues.
*. $eneall# A''epte" A''ounting Pin'iples.
'. $eneall# A''epte" Au"iting Pin'iples.
". $eneall# A''epte" A''ounting Po'e"ues.
1 - 15
Te!" Ba$* +(r A))(u$"%$, Pr%$)%&e!- Te$"' E.%"%($
71. .inan'ial in%o(ation that is 'apa*le o% (a:ing a "i%%een'e in a "e'ision is
a. %aith%ull# epesentati+e.
*. ele+ant.
'. 'on+egent.
". geneall# a''epte".
72. The ?u'e Co(pan# has %i+e plants nation)i"e that 'ost a total o% G100 (illion. The
'uent %ai +alue o% the plants is G500 (illion. The plants )ill *e e'o"e" an" epote" as
assets at
a. G100 (illion.
*. G600 (illion.
'. G400 (illion.
". G500 (illion.
73. The %ai +alue pin'iple is applie" %o
a. all assets.
*. 'uent assets.
'. *uil"ings.
". in+est(ent se'uities.
Ans2 " !;4 1T2 K ?i%%i'ult#2 0as# T;T2 1.0 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2 @epoting
74. The popietoship %o( o% *usiness ogani6ation
a. (ust ha+e at least thee o)nes in (ost states.
*. epesents the lagest nu(*e o% *usinesses in the Bnite" !tates.
'. 'o(*ines the e'o"s o% the *usiness )ith the pesonal e'o"s o% the o)ne.
". is 'haa'tei6e" *# a legal "istin'tion *et)een the *usiness as an e'ono(i' unit an"
the o)ne.
75. The e'ono(i' entit# assu(ption equies that the a'ti+ities
a. o% "i%%eent entities 'an *e 'o(*ine" i% all the entities ae 'opoations.
*. (ust *e epote" to the !e'uities an" 0,'hange Co((ission.
'. o% a sole popietoship 'annot *e "istinguishe" %o( the pesonal e'ono(i' e+ents o%
its o)nes.
". o% an entit# *e :ept sepaate %o( the a'ti+ities o% its o)ne.
76. A *usiness ogani6e" as a 'opoation
a. is not a sepaate legal entit# in (ost states.
*. equies that sto':hol"es *e pesonall# lia*le %o the "e*ts o% the *usiness.
'. is o)ne" *# its sto':hol"es.
". te(inates )hen one o% its oiginal sto':hol"es "ies.
1 - 16
77. The patneship %o( o% *usiness ogani6ation
a. is a sepaate legal entit#.
*. is a 'o((on %o( o% ogani6ation %o se+i'e&t#pe *usinesses.
'. en7o#s an unli(ite" li%e.
". has li(ite" lia*ilit#.
78. 5hi'h o% the %ollo)ing is not an a"+antage o% the 'opoate %o( o% *usiness ogani6ationD
a. <i(ite" lia*ilit# o% sto':hol"es
*. Tans%ea*ilit# o% o)neship
'. Bnli(ite" pesonal lia*ilit# %o sto':hol"es
". Bnli(ite" li%e
79. A s(all neigh*ohoo" *a*e shop that is opeate" *# its o)ne )oul" li:el# *e ogani6e"
as a
a. 7oint +entue.
*. patneship.
'. 'opoation.
". popietoship.
80. Hohn an" !a( (et at la) s'hool an" "e'i"e to stat a s(all la) pa'ti'e a%te ga"uation.
The# agee to split e+enues an" e,penses e+enl#. The (ost 'o((on %o( o% *usiness
ogani6ation %o a *usiness su'h as this )oul" *e a
a. 7oint +entue.
*. patneship.
'. 'opoation.
". popietoship.
81. 5hi'h o% the %ollo)ing is tue ega"ing the 'opoate %o( o% *usiness ogani6ationD
a. Copoations ae the (ost pe+alent %o( o% *usiness ogani6ation.
*. Copoate *usinesses ae geneall# s(alle in si6e than patneships an" popieto&
ships.
'. The e+enues o% 'opoations ae geate than the 'o(*ine" e+enues o% patneships
an" popietoships.
". Copoations ae sepaate legal entities ogani6e" e,'lusi+el# un"e %e"eal la).
1 - 17
Te!" Ba$* +(r A))(u$"%$, Pr%$)%&e!- Te$"' E.%"%($
82. A *asi' assu(ption o% a''ounting that equies a'ti+ities o% an entit# *e :ept sepaate
%o( the a'ti+ities o% its o)ne is e%ee" to as the
a. stan" alone 'on'ept.
*. (oneta# unit assu(ption.
'. 'opoate %o( o% o)neship.
". e'ono(i' entit# assu(ption.
83. Te" <eo is the popieto 8o)ne9 o% Te">s- a etaile o% gol% appael. 5hen e'o"ing the
%inan'ial tansa'tions o% Te">s- Te" "oes not e'o" an ent# %o a 'a he pu'hase" %o
pesonal use. Te" too: out a pesonal loan to pa# %o the 'a. 5hat a''ounting 'on'ept
gui"es Te">s *eha+io in this situationD
a. Pa# *a': 'on'ept
*. 0'ono(i' entit# assu(ption
'. Cash *asis 'on'ept
". /oneta# unit assu(ption
84. A *asi' assu(ption o% a''ounting assu(es that the "olla is
a. unelate" to *usiness tansa'tions.
*. a poo (easue o% e'ono(i' a'ti+ities.
'. the 'o((on unit o% (easue %o all *usiness tansa'tions.
". useless in (easuing an e'ono(i' e+ent.
85. The assu(ption that the unit o% (easue e(ains su%%i'ientl# 'onstant o+e ti(e is pat o%
the
a. e'ono(i' entit# assu(ption.
*. 'ost pin'iple.
'. histoi'al 'ost pin'iple.
". (oneta# unit assu(ption.
86. A *usiness that en7o#s li(ite" lia*ilit# is a
a. popietoship.
*. patneship.
'. 'opoation.
". sole popietoship.
87. A po*le( )ith the (oneta# unit assu(ption is that
a. the "olla has not *een sta*le o+e ti(e.
*. the "olla has *een sta*le o+e ti(e.
'. the "olla is a 'o((on (e"iu( o% e,'hange.
". it is i(possi*le to a''ount %o intenational tansa'tions.
1 - 18
88. The 'o((on 'haa'teisti' possesse" *# all assets is
a. long li%e.
*. geat (oneta# +alue.
'. tangi*le natue.
". %utue e'ono(i' *ene%it.
89. ;)ne>s equit# is *est "epi'te" *# the %ollo)ing2
a. Assets 3 <ia*ilities.
*. <ia*ilities = Assets.
'. @esi"ual equit# = Assets.
". Assets I <ia*ilities.
90. The *asi' a''ounting equation (a# *e e,pesse" as
a. Assets 3 0quities.
*. Assets I <ia*ilities 3 ;)ne>s 0quit#.
'. Assets 3 <ia*ilities = ;)ne>s 0quit#.
". all o% these.
91. <ia*ilities
a. ae %utue e'ono(i' *ene%its.
*. ae e,isting "e*ts an" o*ligations.
'. possess se+i'e potential.
". ae things o% +alue use" *# the *usiness in its opeation.
92. <ia*ilities o% a 'o(pan# )oul" not in'lu"e
a. notes pa#a*le.
*. a''ounts pa#a*le.
'. )ages pa#a*le.
". 'ash.
93. <ia*ilities o% a 'o(pan# ae o)e" to
a. "e*tos.
*. *ene%a'tos.
'. 'e"itos.
". un"e)ites.
94. ;)ne>s equit# 'an *e "es'i*e" as
a. 'e"itoship 'lai( on total assets.
*. o)neship 'lai( on total assets.
'. *ene%a'to>s 'lai( on total assets.
". "e*to 'lai( on total assets.
1 - 19
Te!" Ba$* +(r A))(u$"%$, Pr%$)%&e!- Te$"' E.%"%($
95. ;)ne>s equit# is o%ten e%ee" to as
a. esi"ual equit#.
*. le%to+es.
'. spoils.
". se'on" equit#.
96. 5hen an o)ne )ith"a)s 'ash o othe assets %o( a *usiness %o pesonal use- these
)ith"a)als ae te(e"
a. "epletions.
*. 'onsu(ptions.
'. "a)ings.
". a 'e"it line.
97. Capital is
a. an o)ne>s pe(anent in+est(ent in the *usiness.
*. equal to lia*ilities (inus o)ne>s equit#.
'. equal to assets (inus o)ne>s equit#.
". equal to lia*ilities plus "a)ings.
98. @e+enues )oul" not esult %o(
a. sale o% (e'han"ise.
*. initial in+est(ent o% 'ash *# o)ne.
'. pe%o(an'e o% se+i'es.
". ental o% popet#.
99. !ou'es o% in'eases to o)ne>s equit# ae
a. a""itional in+est(ents *# o)nes.
*. pu'hases o% (e'han"ise.
'. )ith"a)als *# the o)ne.
". e,penses.
100. The *asi' a''ounting equation cannot *e estate" as
a. Assets I <ia*ilities 3 ;)ne>s 0quit#.
*. Assets I ;)ne>s 0quit# 3 <ia*ilities.
'. ;)ne>s 0quit# = <ia*ilities 3 Assets.
". Assets = <ia*ilities 3 ;)ne>s 0quit#.
1 - 1:
101. ;)ne>s equit# is "e'ease" *# all o% the %ollo)ing e,'ept
a. o)ne>s in+est(ents.
*. o)ne>s )ith"a)als.
'. e,penses.
". o)ne>s "a)ings.
102. A net loss )ill esult "uing a ti(e peio" )hen
a. lia*ilities e,'ee" assets.
*. "a)ings e,'ee" in+est(ents.
'. e,penses e,'ee" e+enues.
". e+enues e,'ee" e,penses.
103. 4% total lia*ilities in'ease" *# G15-000 an" o)neJs equit# in'ease" *# G10-000 "uing a
peio" o% ti(e- then total assets (ust 'hange *# )hat a(ount an" "ie'tion "uing that
sa(e peio"D
a. G25-000 "e'ease
*. G5-000 "e'ease
'. G5-000 in'ease
". G25-000 in'ease
Ans2 " !;6 1T2 AP ?i%%i'ult#2 0as# T;T2 1.0 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2 @epoting
104. 4% total lia*ilities "e'ease" *# G15-000 an" o)neJs equit# in'ease" *# G10-000 "uing a
sa(e peio"D
a. G25-000 "e'ease
*. G5-000 "e'ease
'. G5-000 in'ease
". G25-000 in'ease
Ans2 * !;6 1T2 AP ?i%%i'ult#2 0as# T;T2 1.0 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2 @epoting
105. 4% total lia*ilities "e'ease" *# G25-000 an" o)neJs equit# in'ease" *# G15-000 "uing a
sa(e peio"D
a. G40-000 "e'ease
*. G10-000 "e'ease
'. G10-000 in'ease
". G40-000 in'ease
106. 4% total lia*ilities "e'ease" *# G15-000 an" o)neJs equit# "e'ease" *# G10-000 "uing a
sa(e peio"D
a. G25-000 "e'ease
*. G5-000 "e'ease
'. G5-000 in'ease
". G25-000 in'ease
Ans2 a !;6 1T2 AP ?i%%i'ult#2 0as# T;T2 1.0 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2 @epoting
1 - 1;
Te!" Ba$* +(r A))(u$"%$, Pr%$)%&e!- Te$"' E.%"%($
107. 4% total lia*ilities in'ease" *# G17-000 "uing a peio" o% ti(e an" o)neJs equit#
"e'ease" *# G6-000 "uing the sa(e peio"- then the a(ount an" "ie'tion 8in'ease o
"e'ease9 o% the peio"Js 'hange in total assets is a8n9
a. G23-000 "e'ease.
*. G11-000 "e'ease.
'. G11-000 in'ease.
". G23-000 in'ease.
Ans2 ' !;6 1T2 AP ?i%%i'ult#2 0as# T;T2 1.0 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2 @epoting
108. The a''ounting equation %o Kuatto 0ntepises is as %ollo)s2
Assets <ia*ilities ;)neJs 0quit#
G120-000 3 G60-000 = G60-000
4% Kuatto pu'hases o%%i'e equip(ent on a''ount %o G15-000- the a''ounting equation
)ill 'hange to
Assets <ia*ilties ;)neJs 0quit#
a. G120-000 3 G60-000 = G60-000
*. G135-000 3 G60-000 = G75-000
'. G135-000 3 G67-500 = G67-500
". G135-000 3 G75-000 = G60-000
109. As o% Hune 30- 2011- A'tual Tiges Co(pan# has assets o% G100-000 an" o)neJs equit#
o% G30-000. 5hat ae the lia*ilities %o A'tual Tiges Co(pan# as o% Hune 30- 2011D
a. G30-000
*. G70-000
'. G100-000
". G130-000
110. ;)ne>s equit# is in'ease" *#
a. "a)ings.
*. e+enues.
'. e,penses.
". lia*ilities.
111. ;)ne>s equit# is "e'ease" *#
a. assets.
*. e+enues.
'. e,penses.
". lia*ilities.
1 - />
112. 4% total lia*ilities in'ease" *# G8-000- then
a. assets (ust ha+e "e'ease" *# G8-000.
*. o)ne>s equit# (ust ha+e in'ease" *# G8-000.
'. assets (ust ha+e in'ease" *# G8-000- o o)ne>s equit# (ust ha+e "e'ease" *#
G8-000.
". assets an" o)ne>s equit# ea'h in'ease" *# G4-000.
113. Colle'tion o% a G1-000 A''ounts @e'ei+a*le
a. in'eases an asset G1-000C "e'eases an asset G1-000.
*. in'eases an asset G1-000C "e'eases a lia*ilit# G1-000.
'. "e'eases a lia*ilit# G1-000C in'eases o)ne>s equit# G1-000.
". "e'eases an asset G1-000C "e'eases a lia*ilit# G1-000.
114. @e+enues ae
a. the 'ost o% assets 'onsu(e" "uing the peio".
*. goss in'eases in o)ne>s equit# esulting %o( *usiness a'ti+ities.
'. the 'ost o% se+i'es use" "uing the peio".
". a'tual o e,pe'te" 'ash out%lo)s.
115. 4% an in"i+i"ual asset is in'ease"- then
a. thee (ust *e an equal "e'ease in a spe'i%i' lia*ilit#.
*. thee (ust *e an equal "e'ease in o)ne>s equit#.
'. thee (ust *e an equal "e'ease in anothe asset.
". an# o% these is possi*le.
116. 4% se+i'es ae en"ee" %o 'e"it- then
a. assets )ill "e'ease.
*. lia*ilities )ill in'ease.
'. o)ne>s equit# )ill in'ease.
". lia*ilities )ill "e'ease.
117. 4% e,penses ae pai" in 'ash- then
a. assets )ill in'ease.
*. lia*ilities )ill "e'ease.
'. o)ne>s equit# )ill in'ease.
". assets )ill "e'ease.
118. 4% an o)ne (a:es a )ith"a)al o% 'ash %o( a popietoship- then
a. thee has *een a +iolation o% a''ounting pin'iples.
*. o)ne>s equit# )ill in'ease.
'. o)ne>s equit# )ill "e'ease.
". thee )ill *e a ne) lia*ilit# sho)ing the o)ne o)es (one# to the *usiness.
1 - /1
Te!" Ba$* +(r A))(u$"%$, Pr%$)%&e!- Te$"' E.%"%($
119. 4% supplies that ha+e *een pu'hase" ae use" in the 'ouse o% *usiness- then
a. a lia*ilit# )ill in'ease.
*. an asset )ill in'ease.
'. o)ne>s equit# )ill "e'ease.
". o)ne>s equit# )ill in'ease.
120. As o% ?e'e(*e 31- 2011- Cale,i'o Co(pan# has assets o% G37-000 an" o)ne>s equit#
o% G20-000. 5hat ae the lia*ilities %o Cale,i'o Co(pan# as o% ?e'e(*e 31- 2011D
a. G17-000.
*. G20-000.
'. G37-000.
". G57-000.
Ans2 a !;7 1T2 AN ?i%%i'ult#2 0as# T;T2 1.0 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2 @epoting
121. 5hi'h o% the %ollo)ing e+ents is not a *usiness tansa'tionD
a. 4n+est(ent o% 'ash *# the o)ne.
*. Eie" e(plo#ees.
'. 4n'ue" utilit# e,penses %o the (onth.
". 0ane" e+enue %o se+i'es po+i"e".
122. Net in'o(e esults )hen
a. Assets L <ia*ilities.
*. @e+enues 3 0,penses.
'. @e+enues L 0,penses.
". @e+enues M 0,penses.
123. ;)ne>s 'apital at the en" o% the peio" is equal to
a. o)ne>s 'apital at the *eginning o% the peio" plus net in'o(e (inus lia*ilities.
*. o)ne>s 'apital at the *eginning o% the peio" plus net in'o(e (inus "a)ings.
'. net in'o(e.
". assets plus lia*ilities.
124. A *alan'e sheet sho)s
a. e+enues- lia*ilities- an" o)ne>s equit#.
*. e,penses- "a)ings- an" o)ne>s equit#.
'. e+enues- e,penses- an" "a)ings.
". assets- lia*ilities- an" o)ne>s equit#.
125. An in'o(e state(ent
a. su((ai6es the 'hanges in o)ne>s equit# %o a spe'i%i' peio" o% ti(e.
*. epots the 'hanges in assets- lia*ilities- an" o)ne>s equit# o+e a peio" o% ti(e.
'. epots the assets- lia*ilities- an" o)ne>s equit# at a spe'i%i' "ate.
". pesents the e+enues an" e,penses %o a spe'i%i' peio" o% ti(e.
1 - //
126. 4% the o)ne>s equit# a''ount in'eases %o( the *eginning o% the #ea to the en" o% the
#ea- then
a. net in'o(e is less than o)ne "a)ings.
*. a net loss is less than o)ne "a)ings.
'. a""itional o)ne in+est(ents ae less than net losses.
". net in'o(e is geate than o)ne "a)ings.
127. /o%oJs Co(pute @epai !hop state" the #ea )ith total assets o% G270-000 an" total
lia*ilities o% G180-000. ?uing the #ea- the *usiness e'o"e" G450-000 in 'o(pute epai
e+enues- G270-000 in e,penses- an" /o%o )ith"e) G45-000. /o%o>s ;)neJs Capital
*alan'e at the en" o% the #ea )as
a. G180-000.
*. G210-000.
'. G225-000.
". G270-000.
Ans2 ' !;8 1T2 AP ?i%%i'ult#2 /e"iu( T;T2 1.5 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2 @epoting
e+enues- G270-000 in e,penses- an" /o%o )ith"e) G45-000. The net in'o(e epote"
*# /o%o>s Co(pute @epai !hop %o the #ea )as
a. G90-000.
*. G135-000.
'. G180-000.
". G225-000.
e+enues- G270-000 in e,penses- an" /o%o )ith"e) G45-000. /o%o>s ;)neJs Capital
*alan'e 'hange" *# )hat a(ount %o( the *eginning o% the #ea to the en" o% the #eaD
a. G90-000.
*. G135-000.
'. G180-000.
". G225-000.
Ans2 * !;8 1T2 AP ?i%%i'ult#2 /e"iu( T;T2 1.5 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2 @epoting
130. The *alan'e sheet is %equentl# e%ee" to as
a. an opeating state(ent.
*. the state(ent o% %inan'ial position.
'. the state(ent o% 'ash %lo)s.
". the state(ent o% o)ne>s equit#.
131. The pi(a# pupose o% the state(ent o% 'ash %lo)s is to epot
a. a 'o(pan#>s in+esting tansa'tions.
*. a 'o(pan#>s %inan'ing tansa'tions.
'. in%o(ation a*out 'ash e'eipts an" 'ash pa#(ents o% a 'o(pan#.
". the net in'ease o "e'ease in 'ash.
1 - /5
Te!" Ba$* +(r A))(u$"%$, Pr%$)%&e!- Te$"' E.%"%($
132. All o% the %inan'ial state(ents ae %o a peio" o% ti(e except the
a. in'o(e state(ent.
*. o)ne>s equit# state(ent.
'. *alan'e sheet.
". state(ent o% 'ash %lo)s.
133. The en"ing o)ne>s equit# a(ount is sho)n on
a. the *alan'e sheet onl#.
*. the o)ne>s equit# state(ent onl#.
'. *oth the in'o(e state(ent an" the o)ne>s equit# state(ent.
". *oth the *alan'e sheet an" the o)ne>s equit# state(ent.
134. 1la': Ke#s Co(pan# *egan the #ea )ith o)neJs equit# o% G185-000. ?uing the #ea-
the 'o(pan# e'o"e" e+enues o% G250-000- e,penses o% G190-000- an" ha" o)ne
"a)ings o% G20-000. 5hat )as 1la': Ke#sJ o)neJs equit# at the en" o% the #eaD
a. G185-000.
*. G225-000.
'. G245-000.
". G265-000.
135. !u%7an !te+ens 4to *egan the !u%7an Co(pan# *# in+esting G25-000 o% 'ash in the
*usiness. The 'o(pan# e'o"e" e+enues o% G185-000- e,penses o% G140-000- an" ha"
o)ne "a)ings o% G10-000. 5hat )as !u%7anJs net in'o(e %o the #eaD
a. G35-000.
*. G45-000.
'. G55-000.
". G60-000.
136. Cento&(ati' Co(pan# *egan the #ea )ith o)neJs equit# o% G15-000. ?uing the #ea-
Cento&(ati' e'ei+e" a""itional o)ne in+est(ents o% G21-000- e'o"e" e,penses o%
G60-000- an" ha" o)ne "a)ings o% G4-000. 4% Cento&(ati'Js en"ing o)neJs equit# )as
G56-000- )hat )as the 'o(pan#Js e+enue %o the #eaD
a. G80-000.
*. G84-000.
'. G101-000.
". G105-000.
137. 1asu: Co(pan# *egan the #ea )ith o)neJs equit# o% G217-000. ?uing the #ea-
1asu: e'ei+e" a""itional o)ne in+est(ents o% G294-000- e'o"e" e,penses o%
G840-000- an" ha" o)ne "a)ings o% G56-000. 4% 1asu:Js en"ing o)neJs equit# )as
G581-000- )hat )as the 'o(pan#Js e+enue %o the #eaD
a. G910-000.
*. G966-000.
'. G1-204-000.
". G1-260-000.
1 - /6
Bse the %ollo)ing in%o(ation %o questions 138I139.
.at Possu(Js !e+i'e !hop state" the #ea )ith total assets o% G110-000 an" total lia*ilities o%
G80-000. ?uing the #ea- the *usiness e'o"e" G210-000 in e+enues- G140-000 in e,penses-
an" o)ne "a)ings o% G20-000.
138. ;)neJs equit# at the en" o% the #ea )as
a. G30-000.
*. G80-000.
'. G100-000.
". G120-000.
139. The net in'o(e epote" *# .at Possu(Js !e+i'e !hop %o the #ea )as
a. G50-000.
*. G70-000.
'. G80-000.
". G90-000.
140. /isa Co(pan# 'o(pile" the %ollo)ing %inan'ial in%o(ation as o% ?e'e(*e 31- 20112
@e+enues G170-000
;)neJs Capital 81N1N119 70-000
0quip(ent 40-000
0,penses 125-000
Cash 45-000
;)neJs ?a)ings 10-000
!upplies 5-000
A''ounts pa#a*le 20-000
A''ounts e'ei+a*le 35-000
/isaJs assets on ?e'e(*e 31- 2011 ae
a. G90-000.
*. G125-000.
'. G180-000.
" G245-000.
141. /isa Co(pan# 'o(pile" the %ollo)ing %inan'ial in%o(ation as o% ?e'e(*e 31- 20112
@e+enues G170-000
;)neJs Capital 81N1N119 70-000
0quip(ent 40-000
0,penses 125-000
Cash 45-000
!upplies 5-000
1 - /7
Te!" Ba$* +(r A))(u$"%$, Pr%$)%&e!- Te$"' E.%"%($
/isaJs o)neJs equit# on ?e'e(*e 31- 2011 is
a. G45-000.
*. G70-000.
'. G105-000.
". G125-000.
142. Tea(*oo Co(pan#Js o)neJs equit# at the *eginning o% August 2011 )as G300-000.
?uing the (onth- the 'o(pan# eane" net in'o(e o% G70-000 an" o)neJs "a)ings )ee
G30-000. At the en" o% August 2011- )hat is the *alan'e in o)neJs equit#D
a. G270-000
*. G300-000
'. G330-000
". G340-000
Ans2 " !;8 1T2 AP ?i%%i'ult#2 0as# T;T2 1.0 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2 @epoting
143. ;n Hanua# 1- 2011- Cat Po)e Co(pan# epote" o)neJs equit# o% G470-000. ?uing
the #ea- the o)ne )ith"e) 'ash o% G20-000. At ?e'e(*e 31- 2011- the *alan'e in
o)neJs equit# )as G550-000. 5hat a(ount o% net in'o(e o net loss )oul" the 'o(pan#
epot %o 2011D
a. Net loss o% G20-000
*. Net in'o(e o% G60-000
'. Net in'o(e o% G80-000
". Net in'o(e o% G100-000
Ans2 " !;8 1T2 AP ?i%%i'ult#2 /e"iu( T;T2 1.5 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2 @epoting
144. !tahl Consulting state" the #ea )ith total assets o% G20-000 an" total lia*ilities o% G5-000.
?uing the #ea- the *usiness e'o"e" G16-000 in 'ateing e+enues an" G10-000 in
e,penses. !tahl (a"e an a""itional in+est(ent o% G3-000 an" )ith"e) 'ash o% G5-000
"uing the #ea. The o)neJs equit# at the en" o% the #ea )as
a. G11-000.
*. G18-000.
'. G19-000.
". G21-000.
"uing the #ea. The net in'o(e epote" *# !tahl Consulting %o the #ea )as2
a. G1-000.
*. G4-000.
'. G6-000.
". G9-000.
1 - /8
"uing the #ea. ;)neJs equit# 'hange" *# )hat a(ount %o( the *eginning o% the #ea
to the en" o% the #eaD
a. G1-000.
*. G3-000.
'. G4-000.
". G15-000.
147. ?uing the #ea 2011- ?ilego Co(pan# eane" e+enues o% G45-000- ha" e,penses o%
G28-000- pu'hase" assets )ith a 'ost o% G5-000 an" ha" o)ne "a)ings o% G3-000. Net
in'o(e %o the #ea is
a. G9-000.
*. G12-000.
'. G14-000.
". G17-000.
Ans2 " !;8 1T2 AN ?i%%i'ult#2 0as# T;T2 1.0 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2 @epoting
148. At ;'to*e 1- A'a"e .ie 0ntepises epote" o)neJs equit# o% G35-000. ?uing
;'to*e- no a""itional in+est(ents )ee (a"e an" the 'o(pan# eane" net in'o(e o%
G9-000. 4% o)neJs equit# at ;'to*e 31 totals G39-000- )hat a(ount o% o)ne "a)ings
)ee (a"e "uing the (onthD
a. G0
*. G4-000
'. G5-000
". G13-000
Ans2 ' !;8 1T2 AN ?i%%i'ult#2 0as# T;T2 1.0 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2 @epoting
;'to*e- no a""itional in+est(ents )ee (a"e an" the 'o(pan# poste" a net loss o%
G4-000. 4% o)neJs equit# at ;'to*e 31 totals G32-000- )hat a(ount o% o)ne "a)ings
)ee (a"e "uing the (onthD
a. G0
*. G2-000
'. G4-000
". G8-000
Ans2 a !;8 1T2 AN ?i%%i'ult#2 0as# T;T2 1.0 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2 @epoting
;'to*e- the o)ne (a"e a""itional in+est(ents o% G2-000 an" the 'o(pan# eane" net
in'o(e o% G7-000. 4% o)neJs equit# at ;'to*e 31 totals G40-000- )hat a(ount o% o)ne
"a)ings )ee (a"e "uing the (onthD
a. G0
*. G2-000
'. G4-000
". G5-000
Ans2 ' !;8 1T2 AN ?i%%i'ult#2 /e"iu( T;T2 1.5 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2 @epoting
1 - /9
Te!" Ba$* +(r A))(u$"%$, Pr%$)%&e!- Te$"' E.%"%($
;'to*e- the o)ne (a"e a""itional in+est(ents o% G5-000 an" the 'o(pan# poste" a net
loss o% G2-000. 4% o)neJs equit# at ;'to*e 31 totals G35-000- )hat a(ount o% o)ne
"a)ings )ee (a"e "uing the (onthD
a. G0
*. G2-000
'. G3-000
". G5-000
Ans2 ' !;8 1T2 AN ?i%%i'ult#2 /e"iu( T;T2 1.5 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2 @epoting
152. 5hi'h o% the %ollo)ing is not pat o% the a''ounting po'essD
a. @e'o"ing
*. 4"enti%#ing
'. .inan'ial "e'ision (a:ing
". Co((uni'ating
153. The %ist pat o% the a''ounting po'ess is
a. 'o((uni'ating.
*. i"enti%#ing.
'. po'essing.
". e'o"ing.
154. Keeping a s#ste(ati'- 'honologi'al "ia# o% e+ents that ae (easue" in "ollas an"
'ents is 'alle"
a. 'o((uni'ating.
*. i"enti%#ing.
'. po'essing.
". e'o"ing.
155. Au"iting is
a. the e,a(ination o% %inan'ial state(ents *# a CPA in o"e to e,pess an opinion on
thei %ainess.
*. a pat o% a''ounting that in+ol+es onl# e'o"ing o% e'ono(i' e+ents.
'. an aea o% a''ounting that in+ol+es su'h a'ti+ities as 'ost a''ounting- *u"geting- an"
a''ounting in%o(ation s#ste(s.
". 'on"u'te" *# the !e'uities an" 0,'hange Co((ission to ensue that egistee"
%inan'ial state(ents ae pesente" %ail#.
156. 4ntenal uses o% a''ounting in%o(ation in'lu"e all o% the %ollo)ing except
a. 'o(pan# o%%i'es.
*. in+estos.
'. (a:eting (anages.
". po"u'tion supe+isos.
1 - /:
157. The ogani6ation8s9 pi(ail# esponsi*le %o esta*lishing geneall# a''epte" a''ounting
pin'iples is8ae9 the
.A!1 !0C
a. no no
*. #es no
'. no #es
". #es #es
Ans2 " !04 1T2 K ?i%%i'ult#2 0as# T;T2 1.0 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2 @epoting
158. The pi(a# a''ounting stan"a"&setting *o"# in the Bnite" !tates is the
a. .inan'ial A''ounting !tan"a"s 1oa".
*. 4ntenational A''ounting !tan"a"s 1oa".
'. 4ntenal @e+enue !e+i'e.
". !e'uities an" 0,'hange Co((ission.
159. A popietoship is a *usiness
a. o)ne" *# one peson.
*. o)ne" *# t)o o (oe pesons.
'. ogani6e" as a sepaate legal entit# un"e state 'opoation la).
". o)ne" *# a go+en(ental agen'#.
160. A net loss )ill esult "uing a ti(e peio" )hen
a. assets e,'ee" lia*ilities.
*. assets e,'ee" o)ne>s equit#.
'. e,penses e,'ee" e+enues.
". e+enues e,'ee" e,penses.
161. 1ight 0#es ?o)nto)n ?ine e'ei+e" a *ill o% G600 %o( the Honan" 5ine A"+etising
Agen'#. The o)ne- A. A. 1on"#- is postponing pa#(ent o% the *ill until a late "ate. The
e%%e't on spe'i%i' ite(s in the *asi' a''ounting equation is
a. a "e'ease in Cash an" an in'ease in A''ounts Pa#a*le.
*. a "e'ease in Cash an" an in'ease in ;)neJs Capital.
'. an in'ease in A''ounts Pa#a*le an" a "e'ease in ;)neJs Capital.
". a "e'ease in A''ounts Pa#a*le an" an in'ease in ;)neJs Capital.
Ans2 ' !;7 1T2 C ?i%%i'ult#2 /e"iu( T;T2 1.5 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2 @epoting
162. /ata"o Co(pan# pu'hases G1-300 o% equip(ent %o( ?ange /ouse 4n'. %o 'ash. The
e%%e't on the 'o(ponents o% the *asi' a''ounting equation o% /ata"o Co(pan# is
a. an in'ease in assets an" lia*ilities.
*. a "e'ease in assets an" lia*ilities.
'. no 'hange in total assets.
". an in'ease in assets an" a "e'ease in lia*ilities.
1 - /;
Te!" Ba$* +(r A))(u$"%$, Pr%$)%&e!- Te$"' E.%"%($
163. ?uganaut Co(pan# *u#s a G21-000 +an on 'e"it. The tansa'tion )ill a%%e't the
a. in'o(e state(ent onl#.
*. *alan'e sheet onl#.
'. in'o(e state(ent an" o)ne>s equit# state(ent onl#.
". in'o(e state(ent- o)ne>s equit# state(ent- an" *alan'e sheet.
164. 5hi'h o% the %ollo)ing 8a- *- o '9 is not a eason one set o% intenational a''ounting
stan"a"s ae nee"e"D
a. (ultinational 'opoations.
*. (eges an" a'quisitions.
'. in%o(ation te'hnolog#.
". all o% the a*o+e 8a- *- o '9 ae easons one set o% intenational a''ounting stan"a"s
ae nee"e".
165. 5hi'h o% the %ollo)ing 8a- *- o '9 is not a eason one set o% intenational a''ounting
stan"a"s ae nee"e"D
a. (ultinational 'opoations.
*. %inan'ial (a:ets.
'. in%o(ation te'hnolog#.
". all o% the a*o+e 8a- *- o '9 ae easons one set o% intenational a''ounting stan"a"s
ae nee"e".
166. 4ntenational stan"a"s ae e%ee" to as
a. 4.@!.
*. $AAP.
'. 4A!1.
". .A!1.
167. B.!. stan"a"s ae e%ee" to as
a. 4.@!.
*. $AAP.
'. 4A!1.
". .A!1.
168. 4ntenational stan"a"s ae "e+elope" *# the
a. 4.@!.
*. $AAP.
'. 4A!1.
". .A!1.
169. B.!. stan"a"s ae "e+elope" *# the
a. 4.@!.
*. $AAP.
'. 4A!1.
". .A!1.
1 - 5>
170. The Bnite" !tates an" the intenational stan"a"&setting en+ion(ent ae pi(ail# "i+en
*# (eeting the nee"s o%
a. in+estos an" 'e"itos.
*. ta, authoities.
'. 'ental go+en(ent plannes.
". a'a"e(i' esea'hes.
171. The intenal 'ontol stan"a"s appli'a*le to !a*anes&;,le# appl# to
a. all B.!. an" intenational 'o(panies.
*. B.!. an" intenational 'o(panies liste" on B.!. e,'hanges.
'. 4ntenational 'o(panies liste" on B.!. e,'hanges.
". B.!. 'o(panies liste" on B.!. e,'hanges.
172. The 'on'en a*out intenational 'o(panies a"opting !;O&t#pe stan"a"s 'entes on
a. 'ost&*ene%it anal#sis.
*. ethi's issues.
'. the go+ening authoities.
". 'o(paa*ilit#.
173. .inan'ial a''ounting ethi's +iolations ae
a. not a po*le( in the B.!. o intenationall#.
*. (u'h (oe 'o((on in the B.!. than intenationall#.
'. (u'h (oe 'o((on intenationall# than in the B.!.
". a (a7o po*le( *oth in the B.!. an" intenationall#.
174. 4.@!- 'o(pae" to $AAP- ten"s to *e (oe
a. "etaile".
*. ules&*ase".
'. pin'iples&*ase".
". %ull o% "is'losue equie(ents.
175. $AAP- 'o(pae" to 4.@!- ten"s to *e (oe
a. si(ple in a''ounting equie(ents.
*. ules&*ase".
'. pin'iples&*ase".
". si(ple in "is'losue equie(ents.
176. Popietoships- patneships- an" 'opoations
a. ae the thee (ost 'o((on %o(s o% *usiness ogani6ations in the B.!.
*. ae the thee (ost 'o((on %o(s o% *usiness ogani6ations intenationall#.
'. ae use" in "i%%eent popotions in "i%%eent 'ounties.
". all o% the a*o+e ae tue.
1 - 51
Te!" Ba$* +(r A))(u$"%$, Pr%$)%&e!- Te$"' E.%"%($
177. The 'on'eptual %a(e)o: that un"elies 4.@!
a. is +e# si(ila to that use" to "e+elop $AAP.
*. "oes not "e%ine assets o lia*ilities.
'. "oes not "e%ine equit#.
". "oes not "e%ine in'o(e o e,penses.
A$!<er! "( Mu"%&e C'(%)e Que!"%($!
I"e# A$!= I"e# A$!= I"e# A$!= I"e# A$!= I"e# A$!= I"e# A$!= I"e# A$!=
41. ' 61. ' 81. ' 101. a 121. * 141. ' 161. '
42. * 62. ' 82. " 102. ' 122. ' 142. " 162. '
43. ' 63. " 83. * 103. " 123. * 143. " 163. *
44. a 64. * 84. ' 104. * 124. " 144. ' 164. "
45. a 65. * 85. " 105. * 125. " 145. ' 165. "
46. ' 66. " 86. ' 106. a 126. " 146. ' 166. a
47. ' 67. a 87. a 107. ' 127. ' 147. " 167. *
48. * 68. ' 88. " 108. " 128. ' 148. ' 168. '
49. " 69. ' 89. " 109. * 129. * 149. a 169. "
50. * 70. * 90. " 110. * 130. * 150. ' 170. a
51. ' 71. * 91. * 111. ' 131. ' 151. ' 171. "
52. a 72. a 92. " 112. ' 132. ' 152. ' 172. a
53. " 73. " 93. ' 113. a 133. " 153. * 173. "
54. ' 74. * 94. * 114. * 134. * 154. " 174. '
a
55. a 75. " 95. a 115. ' 135. * 155. a 175. *
a
56. ' 76. ' 96. ' 116. ' 136. * 156. * 176. "
a
57. ' 77. * 97. a 117. " 137. * 157. " 177. a
a
58. ' 78. ' 98. * 118. ' 138. * 158. a
59. ' 79. " 99. a 119. ' 139. * 159. a
60. ' 80. * 100. " 120. a 140. * 160. '
BRIEF EXERCISES
BE 19:
/at'h the %ollo)ing e,tenal uses o% %inan'ial a''ounting in%o(ation )ith the t#pe o% "e'ision
that use )ill (a:e )ith the in%o(ation.
a. Ce"ito
*. 4n+esto
'. @egulato# Agen'#
" 4ntenal @e+enue !e+i'e
PPPPPPP 819 4s the 'o(pan# opeating )ithin pes'i*e" gui"elinesD
PPPPPPP 829 4s the 'o(pan# 'o(pl#ing )ith ta, la)sD
PPPPPPP 839 4s the 'o(pan# a*le to pa# its "e*tsD
PPPPPPP 849 4s the 'o(pan# a goo" in+est(entD
1 - 5/
S(u"%($ 19:
1. '
2. "
3. a
4. *
!;2 1T2 C ?i%%i'ult#2 0as# T;T2 3 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2
@epoting
BE 19;
/at'h the %ollo)ing te(s an" "e%initions.
a. A''ounts e'ei+a*le '. A''ounts pa#a*le
*. Ce"ito ". Note pa#a*le
PPPPPPP 819 A(ounts "ue %o( 'usto(es
PPPPPPP 829 A(ounts o)e" to supplies %o goo"s an" se+i'es pu'hase"
PPPPPPP 839 A(ounts o)e" to *an:
PPPPPPP 849 Pat# to )ho( (one# is o)e"
S(u"%($ 19;
1. a
2. '
3. "
4. *
!;6 1T2 K ?i%%i'ult#2 0as# T;T2 3 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2
@epoting
BE 1:>
4n"i'ate )hi'h o% these ite(s is an asset 8A9- lia*ilit# 8<9 o o)neJs equit# 8;09 a''ount.
PPPPPPP 819 !upplies
PPPPPPP 829 ;)neJs ?a)ings
PPPPPPP 839 1uil"ings
PPPPPPP 849 Notes Pa#a*le
PPPPPPP 859 !alaies an" 5ages Pa#a*le
S(u"%($ 1:>
1. Assets 8A9
2. ;)neJs equit# 8;09
3. Asset 8A9
4. <ia*ilit# 8<9
5. <ia*ilit# 8<9
!;6 1T2 K ?i%%i'ult#2 0as# T;T2 3 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2
@epoting
1 - 55
Te!" Ba$* +(r A))(u$"%$, Pr%$)%&e!- Te$"' E.%"%($
BE 1:1
Bse the a''ounting equation to ans)e the %ollo)ing questions.
1. Pi'aesque !ails Co. has total assets o% G120-000 an" total lia*ilities o% G45-000. 5hat is
o)neJs equit#D
2. The Natenal .un Cente has total assets o% G225-000 an" o)neJs equit# o% G100-000. 5hat
ae total lia*ilitiesD
3. ;::e+il @i+e @estauant has total lia*ilities o% G40-000 an" o)neJs equit# o% G100-000.
5hat ae total assetsD
S(u"%($ 1:1
1. G120-000 I G45-000 3 G75-000 o)neJs equit#
2. G225-000 I G100-000 3 G125-000 total lia*ilities
3. G40-000 = G100-000 3 G140-000 total assets
!;6 1T2 AP ?i%%i'ult#2 0as# T;T2 5 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2
@epoting
BE 1:/
?ete(ine the (issing ite(s.
A!!e"! ? L%a2%%"%e! @ O<$er! EAu%"1
G75-000 G52-000 8a9
8*9 G28-000 G34-000
G84-000 8'9 G55-000
S(u"%($ 1:/
a. G23-000
*. G62-000
'. G29-000
@epoting
BE 1:5
Classi%# ea'h o% these ite(s as an asset 8A9- lia*ilit# 8<9- o o)neJs equit# 8;09.
PPPPP 1. A''ounts e'ei+a*le
PPPPP 2. A''ounts pa#a*le
PPPPP 3. ;)neJs Capital
PPPPP 4. ;%%i'e supplies
1 - 56
BE 1:5 8'ont.9
PPPPP 5. Btilities e,pense
PPPPP 6. Cash
PPPPP 7. Notes pa#a*le
PPPPP 8. 0quip(ent
S(u"%($ 1:5 85 (in.9
1. A 5. ;0
2. < 6. A
3. ;0 7. <
4. A 8. A
@epoting
BE 1:6
4"enti%# the i(pa't on the a''ounting equation o% ea'h o% the %ollo)ing tansa'tions.
1. Pu'hase o%%i'e supplies on a''ount.
2. Pai" se'eta# )ee:l# sala#.
3. Pu'hase" o%%i'e %unitue %o 'ash.
4. @e'ei+e" (onthl# utilit# *ill to *e pai" at late ti(e.
S(u"%($ 1:6 85 (in.9
1. 4n'ease assets an" in'ease lia*ilities.
2. ?e'ease assets an" "e'ease o)neJs equit#.
3. 4n'ease assets an" "e'ease assets.
4. 4n'ease lia*ilities an" "e'ease o)neJs equit#.
!;7 1T2 C ?i%%i'ult#2 /e"iu( T;T2 5 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA
.N2 @epoting
BE 1:7
1alan'e sheet a(ounts as o% ?e'e(*e 31- 2011 %o /att Pon">s <eaning !e+i'e ae liste"
*elo). Pepae a *alan'e sheet in goo" %o(.
A''ounts Pa#a*le G 400
A''ounts @e'ei+a*le 1-000
Cash 500
;)neJs Capital D
1 - 57
Te!" Ba$* +(r A))(u$"%$, Pr%$)%&e!- Te$"' E.%"%($
S(u"%($ 1:7 85 (in.9
/ATT P;N?Js TBT;@4N$ !0@F4C0
1alan'e !heet
?e'e(*e 31- 2011
Assets <ia*ilities an" ;)neJs 0quit#
Cash G 500 A''ounts Pa#a*le G 400
A''ounts @e'ei+a*le 1-000 ;)neJs- Capital 1-100
Total assets G1-500 Total lia*ilities an" o)neJs equit# G1-500
!;8 1T2 AP ?i%%i'ult#2 /e"iu( T;T2 5 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA
.N2 @epoting
BE 1:8
4"enti%# )hethe the %ollo)ing ite(s )oul" *e epote" on the in'o(e state(ent 84!9 o *alan'e
sheet 81!9.
1. Cash
2. !e+i'e @e+enue
3. Notes Pa#a*le
4. 4nteest 0,pense
5. A''ounts @e'ei+a*le
S(u"%($ 1:8
1. 1alan'e !heet 81!9
2. 4n'o(e !tate(ent 84!9
4. 4n'o(e !tate(ent 84!9
@epoting
BE 1:9
Bse the %ollo)ing in%o(ation to 'al'ulate %o the #ea en"e" ?e'e(*e 31- 2011 8a9 net in'o(e-
8*9 en"ing o)neJs equit#- an" 8'9 total assets.
!upplies G 1-000 @e+enues G23-000
;peating e,penses 12-000 Cash 15-000
A''ounts pa#a*le 9-000 ?a)ings 1-000
A''ounts e'ei+a*le 3-000 Notes pa#a*le 1-000
1eginning Capital 5-000 0quip(ent 6-000
1 - 58
S(u"%($ 1:9
8a9 G11-000 8*9 G15-000 8'9 G25-000
.N2 @epoting
BE 1::
<iste" *elo) in alpha*eti'al o"e ae the *alan'e sheet ite(s o% /a"7a': Co(pan# at ?e'e(*e
31- 2011. Pepae a *alan'e sheet an" in'lu"e a 'o(plete hea"ing.
A''ounts pa#a*le G 21-000
1uil"ings 96-000
Cash 6-000
;)neJs Capital 113-000
;)neJs 0quip(ent 17-000
S(u"%($ 1::
/A?HACK C;/PANQ
1alan'e !heet
?e'e(*e 31- 2011
A!!0T!
Cash G 6-000
;%%i'e equip(ent 17-000
1uil"ing 96-000
Total assets G134-000
<4A14<4T40! AN? ;5N0@J! 0KB4TQ
<ia*ilities
;)neJs equit#
;)neJs- Capital 113-000
Total lia*ilities an" o)neJs equit# G134-000
.N2 @epoting
1 - 59
Te!" Ba$* +(r A))(u$"%$, Pr%$)%&e!- Te$"' E.%"%($
EXERCISES
E0= 1:;
1elo) is a list o% i(potant a**e+iations )i"el# use" in *usiness. .o ea'h a**e+iation gi+e the
%ull "esignation.
1. CPA PPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPP
2. 4@! PPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPP
3. .14 PPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPP
4. .A!1 PPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPP
5. $AAP PPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPP
6. !0C PPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPP
S(u"%($ 1:;
1. Ceti%ie" Pu*li' A''ountant
2. 4ntenal @e+enue !e+i'e
3. .e"eal 1ueau o% 4n+estigation
4. .inan'ial A''ounting !tan"a"s 1oa"
5. $eneall# A''epte" A''ounting Pin'iples
6. !e'uities an" 0,'hange Co((ission
!;2- 4 1T2 K ?i%%i'ult#2 /e"iu( T;T2 5 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA
.N2 @epoting
E0= 1;>
?ete(ine the (issing a(ount %o ea'h o% the %ollo)ing.
1. 8a9 G50-000 G95-000
2. G125-000 8*9 G85-000
3. G140-000 G65-000 8'9
S(u"%($ 1;>
1. 8a9 3 G145-000 8G50-000 = G95-0009
2. 8*9 3 G40-000 8G125-000 & G85-0009
3. 8'9 3 G75-000 8G140-000 & G65-0009
@epoting
1 - 5:
E0= 1;1
.o the ite(s liste" *elo)- %ill in the appopiate 'o"e lette to in"i'ate )hethe the ite( is an
asset- lia*ilit#- o o)ne>s equit# ite(.
Co"e
Asset A
<ia*ilit# <
;)ne>s 0quit# ;0
PPPPPP 1. @ent 0,pense PPPPPP 6. Cash
PPPPPP 2. 0quip(ent PPPPPP 7. A''ounts @e'ei+a*le
PPPPPP 3. A''ounts Pa#a*le PPPPPP 8. ;)neJs ?a)ings
PPPPPP 4. ;)neJs Capital PPPPPP 9. !e+i'e @e+enue
PPPPPP 5. 4nsuan'e 0,pense PPPPPP10. Notes Pa#a*le
S(u"%($ 1;1
1. ;0 6. A
2. A 7. A
3. < 8. ;0
4. ;0 9. ;0
5. ;0 10. <
@epoting
E0= 1;/
At the *eginning o% the #ea- !haolin Co(pan# ha" total assets o% G550-000 an" total lia*ilities o%
G210-000. Ans)e the %ollo)ing questions +ie)ing ea'h situation as *eing in"epen"ent o% the
othes.
819 4% total assets in'ease" G200-000 "uing the #ea- an" total lia*ilities "e'ease" G75-000-
)hat is the a(ount o% o)ne>s equit# at the en" o% the #eaD
829 ?uing the #ea- total lia*ilities in'ease" G230-000 an" o)ne>s equit# "e'ease" G90-000.
5hat is the a(ount o% total assets at the en" o% the #eaD
839 4% total assets "e'ease" G40-000 an" o)ne>s equit# in'ease" G130-000 "uing the #ea-
)hat is the a(ount o% total lia*ilities at the en" o% the #eaD
1 - 5;
Te!" Ba$* +(r A))(u$"%$, Pr%$)%&e!- Te$"' E.%"%($
S(u"%($ 1;/
Total Assets Total <ia*ilities ;)ne>s 0quit#
1eginning G550-000 G210-000
Change 200-000 875-0009
0n"ing G750-000 I G135-000 3 G615-000 819
1eginning G550-000 G210-000 G340-000
Change 230-000 890-0009
0n"ing G690-000 829 3 G440-000 = G250-000
1eginning G550-000 G210-000 G340-000
Change 840-0009 130-000
0n"ing G510-000 3 G 40-000 839 = G470-000
.N2 @epoting
E0= 1;5
/agnolia 0le'ti' Ca Cleaning has the %ollo)ing a''ounts2
0quip(ent Notes Pa#a*le
A''ounts Pa#a*le ;)neJs Capital
Cash ;)neJs- ?a)ing
!upplies 0quip(ent
A''ounts @e'ei+a*le
4"enti%# )hi'h ite(s ae 819 Assets
829 <ia*ilities
839 ;)ne>s 0quit#
S(u"%($ 1;5
819 AssetsA0quip(ent- Cash- !upplies- A''ounts @e'ei+a*le- 0quip(ent
829 <ia*ilitiesAA''ounts Pa#a*le- Notes Pa#a*le
839 ;)ne>s 0quit#A ;)neJs- Capital- ;)neJs- ?a)ing
!;6 1T2 C ?i%%i'ult#2 0as# T;T2 .5 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2
@epoting
E0= 1;6
;n Hune 1- 2011- !e'etl# Cana"ian Co(pan# pepae" a *alan'e sheet that sho)s the
%ollo)ing2
Assets 8no 'ash9............................................................... G100-000
<ia*ilities........................................................................... 40-000
;)ne>s 0quit#.................................................................. 60-000
1 - 6>
E0= 1;6 8'ont.9
!hotl# theea%te- all o% the assets )ee sol" %o 'ash. Eo) )oul" the *alan'e sheet appea
i((e"iatel# a%te the sale o% the assets %o 'ash %o ea'h o% the %ollo)ing 'asesD
Cash @e'ei+e" %o 1alan'es 4((e"iatel# A%te !ale
the Assets Assets I <ia*ilities 3 ;)ne>s 0quit#
Cash A G110-000 GPPPPPPPP GPPPPPPPP GPPPPPPPP
Cash 1 100-000 PPPPPPPP PPPPPPPP PPPPPPPP
Cash C 90-000 PPPPPPPP PPPPPPPP PPPPPPPP
S(u"%($ 1;6
Cash @e'ei+e" %o 1alan'es 4((e"iatel# A%te !ale
the Assets Assets I <ia*ilities 3 ;)ne>s 0quit#
Cash A G110-000 G110-000 G40-000 G70-000
Cash 1 100-000 100-000 40-000 60-000
Cash C 90-000 90-000 40-000 50-000
.N2 @epoting
E0= 1;7
At the *eginning o% 2011- Eol" !tea"# Co(pan# ha" total assets o% G550-000 an" total lia*ilities
o% G250-000. Ans)e ea'h o% the %ollo)ing questions.
1. 4% total assets in'ease" G60-000 an" o)ne>s equit# "e'ease" G90-000 "uing the #ea-
"ete(ine the a(ount o% total lia*ilities at the en" o% the #ea.
2. ?uing the #ea- total lia*ilities "e'ease" G75-000 an" o)ne>s equit# in'ease" G50-000.
Co(pute the a(ount o% total assets at the en" o% the #ea.
3. 4% total assets "e'ease" G100-000 an" total lia*ilities in'ease" G55-000 "uing the #ea-
"ete(ine the a(ount o% o)ne>s equit# at the en" o% the #ea.
S(u"%($ 1;7
1. 0n"ing Total <ia*ilities 3 8G550-000 = G60-0009 I 8G550-000 I G250-000 & G90-0009
3 G610-000 I G210-000 3 G400-000
2. 0n"ing Total Assets 3 8G250-000 I G75-0009 = 8G550-000 I G250-000 = G50-0009
3 G175-000 = G350-000 3 G525-000
3. 0n"ing ;)ne>s 0quit# 3 8G550-000 I G100-0009 I 8G250-000 = G55-0009
3 G450-000 I G305-000 3 G145-000
1 - 61
Te!" Ba$* +(r A))(u$"%$, Pr%$)%&e!- Te$"' E.%"%($
!;6 1T2 AN ?i%%i'ult#2 /e"iu( T;T2 5 (in. AAC!12 Anal#sis A4CPA 112 Citi'al Thin:ing A4CPA .N2
@epoting
E0= 1;8
Co(pute the (issing a(ount in ea'h 'atego# o% the a''ounting equation.
Assets <ia*ilities ;)ne>s 0quit#
8a9 G349-000 G D G143-000
8*9 G223-000 G 79-000 G D
8'9 G D G253-000 G325-000
S(u"%($ 1;8
8a9 G206-000 8G349-000 I G143-000 3 G206-0009.
8*9 G144-000 8G223-000 I G79-000 3 G144-0009.
8'9 G578-000 8G253-000 = G325-000 3 G578-0009.
!;6 1T2 AN ?i%%i'ult#2 0as# T;T2 5 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2
@epoting
E0= 1;9
.o( the %ollo)ing list o% sele'te" a''ounts ta:en %o( the e'o"s o% 5a" Eo(eopathi' Cente-
i"enti%# those that )oul" appea on the *alan'e sheet.
a. ;)neJs Capital %. A''ounts Pa#a*le
*. !e+i'e @e+enue g. Cash
'. <an" h. @ent 0,pense
". !alaies an" 5ages 0,pense i. !upplies
e. Notes Pa#a*le 7. Btilities 0,pense
S(u"%($ 1;9
a- '- e- %- g- i
@epoting
E0= 1;:
!ele'te" tansa'tions %o /ountain $oats Tee !e+i'e ae liste" *elo).
1. /a"e 'ash in+est(ent to stat *usiness.
2. Pai" %o (onthl# a"+etising.
3. Pu'hase" supplies on a''ount.
4. 1ille" 'usto(es %o se+i'es pe%o(e".
5. 5ith"e) 'ash %o o)neJs pesonal use.
6. @e'ei+e" 'ash %o( 'usto(es *ille" in 849.
7. 4n'ue" utilities e,pense on a''ount.
1 - 6/
8. Pu'hase" a""itional supplies %o 'ash.
9. @e'ei+e" 'ash %o( 'usto(es )hen se+i'e )as pe%o(e".
I$!"ru)"%($!
<ist the nu(*es o% the a*o+e tansa'tions an" "es'i*e the e%%e't o% ea'h tansa'tion on assets-
lia*ilities- an" o)neJs equit#. .o e,a(ple- the %ist ans)e is2 819 4n'ease in assets an"
in'ease in o)neJs equit#.
S(u"%($ 1;:
1. 4n'ease in assets an" in'ease in o)neJs equit#.
2. ?e'ease in assets an" "e'ease in o)neJs equit#.
3. 4n'ease in assets an" in'ease in lia*ilities.
5. ?e'ease in assets an" "e'ease in o)neJs equit#.
6. 4n'ease in assets an" "e'ease in assets.
7. 4n'ease in lia*ilities an" "e'ease in o)neJs equit#.
8. 4n'ease in assets an" "e'ease in assets.
!;6- 7 1T2 C ?i%%i'ult#2 0as# T;T2 3 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2
@epoting
E0= 1;;
5il'o <egal 0agles Co(pan# entee" into the %ollo)ing tansa'tions "uing
/a'h 2011.
1. Pu'hase" o%%i'e equip(ent %o G23-000 %o( 1usiness 0quip(ent- 4n'. on a''ount.
2. Pai" G3-000 'ash %o /a'h ent on o%%i'e %unitue.
3. @e'ei+e" G15-000 'ash %o( 'usto(es %o legal )o: *ille" in .e*ua#.
4. Po+i"e" legal se+i'es to A(# Constu'tion Co(pan# %o G3-500 'ash.
5. Pai" Nothen !tates Po)e Co. G2-700 'ash %o ele'ti' usage in /a'h.
6. H. 5il'o in+este" an a""itional G32-000 in the *usiness.
7. Pai" 1usiness 0quip(ent- 4n'. %o the o%%i'e equip(ent pu'hase" in 819 a*o+e.
8. 4n'ue" a"+etising e,pense %o /a'h o% G1-900 on a''ount.
I$!"ru)"%($!
4n"i'ate )ith the appopiate lette )hethe ea'h o% the tansa'tions a*o+e esults in2
8a9 an in'ease in assets an" a "e'ease in assets.
8*9 an in'ease in assets an" an in'ease in o)neJs equit#.
8'9 an in'ease in assets an" an in'ease in lia*ilities.
8"9 a "e'ease in assets an" a "e'ease in o)neJs equit#.
8e9 a "e'ease in assets an" a "e'ease in lia*ilities.
8%9 an in'ease in lia*ilities an" a "e'ease in o)neJs equit#.
8g9 an in'ease in o)neJs equit# an" a "e'ease in lia*ilities.
S(u"%($ 1;;
1. 8'9 5. 8"9
2. 8"9 6. 8*9
3. 8a9 7. 8e9
4. 8*9 8. 8%9
1 - 65
Te!" Ba$* +(r A))(u$"%$, Pr%$)%&e!- Te$"' E.%"%($
!;6- 7 1T2 C ?i%%i'ult#2 0as# T;T2 3 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2
@epoting
E0= />>
T)o ite(s ae o(itte" %o( ea'h o% the %ollo)ing su((aies o% *alan'e sheet an" in'o(e
state(ent "ata %o t)o popietoships %o the #ea 2012- Eoll# 0ntepises an" Cat !te+ens.
Ba)* S'ee& E$"er&r%!e! Ca" S"e4e$!
1eginning o% #ea2
Total assets G 98-000 G129-000
Total lia*ilities 55-000 8'9
Total o)neJs equit# 8a9 75-000
0n" o% #ea2
Total assets 160-000 180-000
Total lia*ilities 100-000 50-000
Total o)neJs equit# 60-000 130-000
Changes "uing #ea in o)neJs equit#2
A""itional in+est(ent 8*9 25-000
?a)ings 25-000 8"9
Total e+enues 215-000 100-000
Total e,penses 185-000 65-000
I$!"ru)"%($!
?ete(ine the (issing a(ounts.
S(u"%($ />>
8a9 Total assets 8*eginning o% #ea9 G98-000
Total lia*ilities 8*eginning o% #ea9 855-0009
Total o)neJs equit# 8*eginning o% #ea9 G43-000
8*9 Total o)neJs equit# 8en" o% #ea9 G60-000
Total o)neJs equit# 8*eginning o% #ea9 843-0009
4n'ease in o)neJs equit# G17-000
Total e+enues G215-000
Total e,penses 185-000
Net in'o(e G 30-000
<ess2 Net in'o(e G830-0009
A""2 ?a)ings 25-0009 85-0009
A""itional in+est(ent G12-000
8'9 Total assets 8*eginning o% #ea9 G129-000
Total lia*ilities 8*eginning o% #ea9 G 54-000
1 - 66
S(u"%($ />> 8'ont.9
8"9 Total o)neJs equit# 8en" o% #ea9 G130-000
4n'ease in o)neJs equit# G 55-000
Total e+enues G100-000
Net in'o(e G 35-000
<ess2 Net in'o(e G 35-000
A""itional in+est(ent 25-000 860-0009
?a)ings G85-0009
!;6- 7 1T2 AP ?i%%i'ult#2 /e"iu( T;T2 5 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA
.N2 @epoting
E0= />1
An anal#sis o% the tansa'tions (a"e *# 5hite !tipes R Co.- a la) %i(- %o the (onth o% Hul# is
sho)n *elo). 0a'h in'ease an" "e'ease in o)neJs equit# is e,plaine".
A''ounts A''ounts ;)neJs 0quit#
Cash = @e'ei+a*le = !upplies = 0quip(ent 3 Pa#a*le = ;)neJs Capital
1. =G15-000 =G15-000 4n+est(ent
2. & 2-000 =G5-000 =G3-000
3. & 750 =G750
4. = 2-500 =G4-600 = 7-100 !e+i'e @e+enue
5. & 1-500 & 1-500
6. & 2-500 & 2-500 ?a)ings
7. & 750 & 750 @ent 0,pense
8. = 550 & 550
9. & 3-500 & 3-500 !alaies 0,pense
10. = 500 & 500 Btilities 0,pense
I$!"ru)"%($!
8a9 ?ete(ine ho) (u'h o)neJs equit# in'ease" %o the (onth.
8*9 Co(pute the a(ount o% net in'o(e %o the (onth.
S(u"%($ />1
8a9 4n+est(ent G15-000
!e+i'e e+enue 7-100
?a)ings 82-5009
@ent e,pense 87509
!alaies e,pense 83-5009
Btilities e,pense 85009
4n'ease in 'apital G14-850
1 - 67
Te!" Ba$* +(r A))(u$"%$, Pr%$)%&e!- Te$"' E.%"%($
S(u"%($ />1 8'ont.9
8*9 !e+i'e e+enue G7-100
@ent e,pense 87509
Net in'o(e G2-350
@epoting
E0= />/
The Constantine Co(pan# ha" the %ollo)ing assets an" lia*ilities on the "ates in"i'ate".
De)e#2er 51 T("a A!!e"! T("a L%a2%%"%e!
2010 G480-000 G250-000
2011 G460-000 G210-000
2012 G590-000 G300-000
Constantine *egan *usiness on Hanua# 1- 2010- )ith an in+est(ent o% G100-000.
I$!"ru)"%($!
.o( an anal#sis o% the 'hange in o)neJs equit# "uing the #ea- 'o(pute the net in'o(e 8o
loss9 %o2
8a9 2010- assu(ing ConstantineJs "a)ings )ee G35-000 %o the #ea.
8*9 2011- assu(ing Constantine (a"e an a""itional in+est(ent o% G50-000 an" ha" no "a)ings
in 2011.
8'9 2012- assu(ing Constantine (a"e an a""itional in+est(ent o% G15-000 an" ha" "a)ings o%
G30-000 in 2010.
S(u"%($ />/
8a9 ;)neJs equit#A12N31N10 8G480-000 I G250-0009 G230-000
;)neJs equit#A1N1N10 8100-0009
4n'ease in o)neJs equit# 130-000
A""2 ?a)ings 35-000
Net in'o(e %o 2010 G165-000
8*9 ;)neJs equit#A12N31N11 8G460-000 I G210-0009 G250-000
;)neJs equit#A1N1N11Asee 8a9 8230-0009
<ess2 A""itional in+est(ent 50-000
Net loss %o 2011 G 830-0009
8'9 ;)neJs equit#A12N31N12 8G590-000 I G300-0009 G290-000
;)neJs equit#A1N1N12Asee 8*9 250-000
<ess2 A""itional in+est(ent 815-0009
25-000
A""2 ?a)ings 30-000
Net in'o(e %o 2012 G 55-000
.N2 @epoting
1 - 68
E0= />5
.o ea'h o% the %ollo)ing- in"i'ate )hethe the tansa'tion a%%e'ts e+enue 8@9- e,pense 809-
o)ne>s "a)ing 8?9- o)ne>s in+est(ent 849- o no e%%e't on o)ne>s equit# 8N;09.
1. /a"e an in+est(ent to stat the *usiness.
3. Pu'hase" equip(ent on a''ount.
4. Pai" (onthl# ent.
5. 5ith"e) 'ash %o pesonal use.
S(u"%($ />5
1. 4n+est(ent 849
2. @e+enue 8@9
3. No e%%e't 8N;09
4. 0,pense 809
5. ?a)ing 8?9
@epoting
E0= />6
Pesente" *elo) is a *alan'e sheet %o Hi( Eenson Qa" !e+i'e at ?e'e(*e 31- 2011.
JIM HENSON YARD SERVICE
1alan'e !heet
?e'e(*e 31- 2011
Assets <ia*ilities an" ;)ne>s 0quit#
Cash G13-000 <ia*ilities
A''ounts e'ei+a*le 6-000 A''ounts pa#a*le G 8-000
!upplies 9-000 Notes pa#a*le 15-000
0quip(ent 11-000 ;)ne>s equit#
;)neJs 'apital 16-000
Total assets G39-000 Total lia*ilities R o)neJs equit# G39-000
The %ollo)ing a""itional "ata ae a+aila*le %o the #ea )hi'h *egan on Hanua# 12 All e,penses
8e,'lu"ing supplies e,pense9 total G6-000. !upplies on Hanua# 1- )ee G11-000 an" G5-000 o%
supplies )ee pu'hase" "uing the #ea. Net in'o(e %o the #ea )as G8-000 an" "a)ings )ee
G6-000.
I$!"ru)"%($!
?ete(ine the %ollo)ing2 8!ho) all 'o(putations.9
1. !upplies use" "uing the #ea.
2. Total e,penses %o the #ea.
3. !e+i'e e+enues %o the #ea.
4. ;)neJs 'apital *alan'e on Hanua# 1.
1 - 69
Te!" Ba$* +(r A))(u$"%$, Pr%$)%&e!- Te$"' E.%"%($
S(u"%($ />6
1. Co(putation o% !upplies Bse"2
1eginning !upplies- Han. 1 G11-000
A""2 Pu'hases 5-000
<ess2 0n"ing !upplies- ?e'. 31 89-0009
0quals2 !upplies Bse" G 7-000
2. Co(putation o% Total 0,penses2
All 0,penses 8e,'lu"ing supplies e,pense9 G 6-000
Plus2 !upplies Bse" 7-000
Total 0,penses G13-000
3. Co(putation o% @e+enues2
Net 4n'o(e G 8-000
Plus2 Total 0,penses 13-000
Total @e+enues G21-000
4. Co(putation o% ;)neJs Capital on Hanua# 12
Capital- ?e'e(*e 31 G16-000
Plus2 ?a)ings 6-000
<ess2 Net 4n'o(e 88-0009
Capital- Hanua# 1 G14-000
!;7 1T2 AN ?i%%i'ult#2 Ea" T;T2 10 (in. AAC!12 Anal#sis A4CPA 112 Citi'al Thin:ing A4CPA PC2 Po*le(
!ol+ing
E0= />7
Anal#6e the tansa'tions o% a *usiness ogani6e" as a popietoship "es'i*e" *elo) an"
in"i'ate thei e%%e't on the *asi' a''ounting equation. Bse a plus sign 8=9 to in"i'ate an in'ease
an" a (inus sign 8I9 to in"i'ate a "e'ease.
1. @e'ei+e" 'ash %o se+i'es en"ee". PPPPPPPP PPPPPPPP PPPPPPPP
2. Pu'hase" o%%i'e equip(ent on 'e"it. PPPPPPPP PPPPPPPP PPPPPPPP
3. Pai" e(plo#ees> salaies. PPPPPPPP PPPPPPPP PPPPPPPP
4. @e'ei+e" 'ash %o( 'usto(e in pa#(ent
on a''ount. PPPPPPPP PPPPPPPP PPPPPPPP
5. Pai" telephone *ill %o the (onth. PPPPPPPP PPPPPPPP PPPPPPPP
6. Pai" %o o%%i'e equip(ent pu'hase" in
tansa'tion 2. PPPPPPPP PPPPPPPP PPPPPPPP
7. Pu'hase" o%%i'e supplies on 'e"it. PPPPPPPP PPPPPPPP PPPPPPPP
8. ;)ne )ith"e) 'ash %o pesonal
e,penses. PPPPPPPP PPPPPPPP PPPPPPPP
9. ;*taine" a loan %o( the *an:. PPPPPPPP PPPPPPPP PPPPPPPP
10. 1ille" 'usto(es %o se+i'es en"ee". PPPPPPPP PPPPPPPP PPPPPPPP
1 - 6:
S(u"%($ />7
1. @e'ei+e" 'ash %o se+i'es en"ee". = =
2. Pu'hase" o%%i'e equip(ent on 'e"it. = =
3. Pai" e(plo#ees> salaies. I I
4. @e'ei+e" 'ash %o( 'usto(e in pa#(ent =-I
on a''ount.
5. Pai" telephone *ill %o the (onth. I I
6. Pai" %o o%%i'e equip(ent pu'hase" in
tansa'tion 2. I I
7. Pu'hase" o%%i'e supplies on 'e"it. = =
8. ;)ne )ith"e) 'ash %o pesonal
e,penses. I I
9. ;*taine" a loan %o( the *an:. = =
10. 1ille" 'usto(es %o se+i'es en"ee". = =
.N2 @epoting
E0= />8
.o ea'h o% the %ollo)ing- in"i'ate )hethe the tansa'tion in'ease" 8=9- "e'ease" 8&9- o ha" no
e%%e't 8N09 on assets- lia*ilities- an" o)ne>s equit# using the %ollo)ing %o(at.
1. /a"e an in+est(ent to stat the *usiness.
3. Pu'hase" equip(ent on a''ount.
4. 5ith"e) 'ash %o pesonal use.
5. Pai" %o equip(ent pu'hase" in 3. a*o+e.
S(u"%($ />8
1. = N0 =
2. = N0 =
3. = = N0
4. I N0 I
5. I I N0
1 - 6;
Te!" Ba$* +(r A))(u$"%$, Pr%$)%&e!- Te$"' E.%"%($
@epoting
E0= />9
Ne:o Case "e'i"es to open a 'leaning an" laun"# se+i'e nea the lo'al 'ollege 'a(pus that )ill
opeate as a sole popietoship. Anal#6e the %ollo)ing tansa'tions %o the (onth o% Hune in
te(s o% thei e%%e't on the *asi' a''ounting equation. @e'o" ea'h tansa'tion *# in'easing 8=9
o "e'easing 8I9 the "olla a(ount o% ea'h ite( a%%e'te". 4n"i'ate the ne) *alan'e o% ea'h ite(
a%te a tansa'tion is e'o"e". 4t is not ne'essa# to i"enti%# the 'ause o% 'hanges in o)ne>s
equit#.
Tansa'tions
819 Ne:o Case in+ests G20-000 in 'ash to stat a 'leaning an" laun"# *usiness on Hune 1.
829 Pu'hase" equip(ent %o G5-000 pa#ing G3-000 in 'ash an" the e(ain"e "ue in 30
"a#s.
839 Pu'hase" supplies %o G1-200 'ash.
849 @e'ei+e" a *ill %o( College Ne)s %o G300 %o a"+etising in the 'a(pus ne)spape.
859 Cash e'eipts %o( 'usto(es %o 'leaning an" laun"# a(ounte" to G2-400.
869 Pai" salaies o% G600 to stu"ent )o:es.
879 1ille" the <ion !o''e Tea( G450 %o 'leaning an" laun"# se+i'es.
889 Pai" G300 to College Ne)s %o a"+etising that )as pe+iousl# *ille" in Tansa'tion 4.
899 Ne:o Case )ith"e) G900 %o( the *usiness %o li+ing e,penses.
8109 4n'ue" utilit# e,penses %o (onth on a''ount- G400.
Tans& A''ounts A''ounts ;)neJs
a'tion Cash = @e'ei+a*le = !upplies = 0quip(ent 3 Pa#a*le = Capital
819
AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA
1alan'e
829
1alan'e
839
1alan'e
849
1alan'e
859
1alan'e
869
1alan'e
879
1alan'e
889
1alan'e
1 - 7>
E0= />9 8'ont.9
899
1alan'e
8109
Totals

S(u"%($ />9
Tans& A''ounts A''ounts ;)neJs
a'tion Cash = @e'ei+a*le = !upplies = 0quip(ent 3 Pa#a*le = Capital
819 =G20-000 =G20-000
1alan'e G20-000 G20-000
829 I 3-000 =G5-000 =G2-000
1alan'e G17-000 G5-000 G2-000 G20-000
839 I 1-200 =G1-200
1alan'e G15-800 G1-200 G5-000 G2-000 G20-000
849 = 300 I 300
1alan'e G15-800 G1-200 G5-000 G2-300 G19-700
859 = 2-400 = 2-400
1alan'e G18-200 G1-200 G5-000 G2-300 G22-100
869 I 600 I 600
1alan'e G17-600 G1-200 G5-000 G2-300 G21-500
879 =G450 = 450
1alan'e G17-600 G450 G1-200 G5-000 G2-300 G21-950
889 I 300 I 300
1alan'e G17-300 G450 G1-200 G5-000 G2-000 G21-950
899 I 900 I 900
1alan'e G16-400 G450 G1-200 G5-000 G2-000 G21-050
8109 = 400 I 400
Totals G16-400 G450 G1-200 G5-000 G2-400 G20-650

.N2 @epoting
1 - 71
Te!" Ba$* +(r A))(u$"%$, Pr%$)%&e!- Te$"' E.%"%($
E0= />:
.o ea'h o% the %ollo)ing- "es'i*e a tansa'tion that )ill ha+e the state" e%%e't on the ele(ents o%
the a''ounting equation.
8a9 4n'ease one asset an" "e'ease anothe asset.
8*9 4n'ease an asset an" in'ease a lia*ilit#.
8'9 ?e'ease an asset an" "e'ease a lia*ilit#.
8"9 4n'ease an asset an" in'ease o)ne>s equit#.
8e9 4n'ease one asset- "e'ease one asset- an" in'ease a lia*ilit#.
S(u"%($ />:
8a9 @e'ei+e 'ash %o( 'usto(es on a''ount.
Pu'hase supplies %o 'ash.
8*9 Pu'hase supplies on a''ount.
Pu'hase equip(ent an" signe" a note pa#a*le.
8'9 Pa# 'ash to e"u'e a''ounts pa#a*le.
Pa# 'ash to e"u'e a note pa#a*le.
8"9 4nitial 'onti*ution *# an o)ne.
A""itional 'onti*utions *# an o)ne.
@en"e se+i'es on a''ount 8o %o 'ash9.
8e9 1u# equip(ent )ith a 'ash "o)n pa#(ent )ith the e(ain"e %inan'e" *# a note pa#a*le.
.N2 @epoting
E0= />;
The %ollo)ing tansa'tions epesent pat o% the a'ti+ities o% 1lo' Pat# Co(pan# %o the %ist
(onth o% its e,isten'e. 4n"i'ate the e%%e't o% ea'h tansa'tion upon the total assets o% the
*usiness *# one o% the %ollo)ing phases2 in'ease" total assets- "e'ease" total assets- o no
'hange in total assets.
8a9 The o)ne in+este" 'ash to stat the *usiness.
8*9 Pu'hase" a 'o(pute %o 'ash.
8'9 Pu'hase" o%%i'e equip(ent )ith (one# *oo)e" %o( the *an:.
8"9 Pai" the %ist (onth>s utilit# *ill.
8e9 Colle'te" an a''ounts e'ei+a*le.
8%9 ;)ne )ith"e) 'ash %o( the *usiness.
S(u"%($ />;
8a9 4n'ease" total assets.
8*9 No 'hange in total assets.
8'9 4n'ease" total assets.
8"9 ?e'ease" total assets.
8e9 No 'hange in total assets.
1 - 7/
S(u"%($ />; 8'ont.9
8%9 ?e'ease" total assets.
.N2 @epoting
E0= /1>
!ele'te" tansa'tions %o Paton Co(pan# ae liste" *elo). <ist the nu(*e o% the tansa'tion
an" then "es'i*e the e%%e't o% ea'h tansa'tion on assets- lia*ilities- an" o)ne>s equit#.
!a(ple2 /a"e initial 'ash in+est(ent in the *usiness.
The ans)e )oul" *eA4n'ease in assets an" in'ease in o)ne>s equit#.
1. Pai" (onthl# utilit# *ill.
2. Pu'hase" ne) "ispla# 'ase %o 'ash.
3. Pai" 'ash %o epai )o: on se'uit# s#ste(.
5. @e'ei+e" 'ash %o( 'usto(es *ille" in 4.
6. 5ith"e) 'ash %o o)ne>s pesonal use.
7. 4n'ue" a"+etising e,penses on a''ount.
8. Pai" (onthl# ent.
9. @e'ei+e" 'ash %o( 'usto(es )hen se+i'e )as en"ee".
S(u"%($ /1>
1. ?e'ease in assets an" "e'ease in o)ne>s equit#.
2. No net 'hange in assets.
4. 4n'ease in assets an" in'ease in o)ne>s equit#.
5. No net 'hange in assets.
7. 4n'ease in lia*ilities an" "e'ease in o)ne>s equit#.
9. 4n'ease in assets an" in'ease in o)ne>s equit#.
.N2 @epoting
E0= /11
A se+i'e popietoship sho)s %i+e tansa'tions su((ai6e" *elo). The e%%e't o% ea'h
tansa'tion on the a''ounting equation is sho)n- an" also the ne) *alan'e o% ea'h ite( in the
equation. .o ea'h tansa'tion 8a9 to 8e9 )ite an e,planation o% the natue o% the tansa'tion.
A''ounts 0quip& A''ounts ;)neJs
Cash = @e'. = (ent = <an" = 1uil"ing 3 Pa#a*le = Capital
G5-000 G6-500 G10-000 G7-500 G50-000 G3-000 G76-000
a9 I2-000 I2-000
3-000 6-500 10-000 7-500 50-000 1-000 76-000
*9 =1-000 I 1-000
4-000 5-500 10-000 7-500 50-000 1-000 76-000
1 - 75
Te!" Ba$* +(r A))(u$"%$, Pr%$)%&e!- Te$"' E.%"%($
E0= /11 8'ont.9
'9 = 5-000 =5-000
4-000 5-500 15-000 7-500 50-000 6-000 76-000
"9 =2-500 = 2-500
6-500 5-500 15-000 7-500 50-000 6-000 78-500
e9 =3-000 = 3-000
G6-500 G8-500 G15-000 G7-500 G50-000 G6-000 G81-500
S(u"%($ /11
8a9 Pai" 'ash to 'e"itos.
8*9 @e'ei+e" 'ash %o( 'usto(es on a''ount.
8'9 1ought equip(ent on a''ount.
8"9 A""itional in+est(ent *# o)ne o se+i'es en"ee" to 'usto(es %o 'ash.
8e9 !e+i'es en"ee" on a''ount.
!;7 1T2 C ?i%%i'ult#2 /e"iu( T;T2 5 (in. AAC!12 Anal#sis A4CPA 112 Citi'al Thin:ing A4CPA .N2 @epoting
E0= /1/
Thee ae ten tansa'tions liste" *elo). /at'h the tansa'tions that ha+e the i"enti'al e%%e't on
the a''ounting equation. Qou shoul" en" up )ith 5 (at'hes.
a. @e'ei+e 'ash %o( 'usto(es on a''ount.
*. 4nitial 'ash 'onti*ution *# an o)ne.
'. Pa# 'ash to e"u'e an a''ounts pa#a*le.
". Pu'hase supplies %o 'ash.
e. Pa# 'ash to e"u'e a notes pa#a*le.
%. Pu'hase supplies on a''ount.
g. A""itional 'ash 'onti*ution *# an o)ne.
h. Pu'hase equip(ent )ith a note pa#a*le.
i. Pa# utilities )ith 'ash.
7. ;)ne )ith"a)s (one# %o( the *usiness %o pesonal use.
S(u"%($ /1/
/at'h S1 3 a- "
S2 3 '- e
S3 3 %- h
S4 3 *- g
S5 3 i- 7
.N2 @epoting
1 - 76
E0= /15
An anal#sis o% the tansa'tions (a"e *# Coo:ie /ountain <egal R Co.- a la) %i(- %o the (onth
o% Hul# is sho)n *elo). 0a'h in'ease an" "e'ease in o)neJs equit# is e,plaine".
Cash = @e'ei+a*le = !upplies = 0quip(ent 3 Pa#a*le = ;)neJs Capital
1. =G15-000 =G15-000 4n+est(ent
2. & 2-000 =G5-000 =G3-000
3. & 750 =G750
4. = 2-500 =G4-600 = 7-100 !e+i'e @e+enue
5. & 1-500 & 1-500
6. & 2-500 & 2-500 ?a)ings
7. & 750 & 750 @ent 0,pense
8. = 550 & 550
9. & 3-500 & 3-500 !alaies 0,pense
I$!"ru)"%($!
8a9 Pepae an in'o(e state(ent %o the (onth en"ing Hul# 31- 2012.
8*9 Pepae an o)neJs equit# state(ent %o the (onth en"ing Hul# 31- 2012.
S(u"%($ /15
8a9
COOBIE MOUNTAIN LEGAL
4n'o(e !tate(ent
.o the /onth 0n"e" Hul# 31- 2012
@e+enues
!e+i'e e+enue G7-100
0,penses
!alaies an" )ages e,pense G3-500
@ent e,pense 750
Net in'o(e G2-350
8*9
;)neJs 0quit# !tate(ent
.o the /onth 0n"e" Hul# 31- 2012
;)neJs Capital- Hul# 1 0
A""2 4n+est(ents G15-000
Net in'o(e 2-350 17-350
17-350
<ess2 ?a)ings 2-500
;)neJs Capital- Hul# 31 G14-850
@epoting
1 - 77
Te!" Ba$* +(r A))(u$"%$, Pr%$)%&e!- Te$"' E.%"%($
E0= /16
An anal#sis o% the tansa'tions (a"e *# Coo:ie /ountain <egal- a la) %i(- %o the (onth o% Hul#
is sho)n *elo). 0a'h in'ease an" "e'ease in o)neJs equit# is e,plaine".
Cash = @e'ei+a*le = !upplies = 0quip(ent 3 Pa#a*le = ;)neJs- Capital
1. =G15-000 =G15-000 4n+est(ent
2. & 2-000 =G5-000 =G3-000
3. & 750 =G750
4. = 2-500 =G4-600 = 7-100 !e+i'e @e+enue
5. & 1-500 & 1-500
6. & 2-500 & 2-500 ?a)ings
7. & 750 & 750 @ent 0,pense
8. = 550 & 550
9. & 3-500 & 3-500 !alaies 0,pense
I$!"ru)"%($!
Pepae a *alan'e sheet at Hul# 31- 2012.
S(u"%($ /16
1alan'e !heet
Hul# 31- 2012
Assets
Cash G 7-050
!upplies 750
0quip(ent 5-000
<ia*ilities an" ;)neJs 0quit#
<ia*ilities
;)neJs equit#
@epoting
1 - 78
E0= /17
The %ollo)ing in%o(ation elates to 1onnie 1ill# Co. %o the #ea 2012.
;)neJs Capital- Hanua# 1- 2012 G 67-000 A"+etising e,pense G4-500
?a)ings "uing 2012 6-000 @ent e,pense 9-500
!e+i'e e+enue 67-500 Btilities e,pense 1-400
!alaies an" )ages e,pense 29-000
I$!"ru)"%($!
A%te anal#6ing the "ata- pepae an in'o(e state(ent an" an o)neJs equit# state(ent %o the
#ea en"ing ?e'e(*e 31- 2012
S(u"%($ /17
BONNIE BILLY CO=
4n'o(e !tate(ent
.o the Qea 0n"e" ?e'e(*e 31- 2012
@e+enues
!e+i'e e+enue G67-500
0,penses
!alaies an" )ages e,pense G29-000
@ent e,pense 9-500
A"+etising e,pense 4-500
Btilities e,pense 1-400
Net in'o(e G23-100
BONNIE BILLY CO=
.o the Qea 0n"e" ?e'e(*e 31- 2012
;)neJs Capital- Hanua# 1 G67-000
A""2 Net in'o(e 23-100
90-100
<ess2 ?a)ings 6-000
;)neJs Capital- ?e'e(*e 31 G84-100
@epoting
1 - 79
Te!" Ba$* +(r A))(u$"%$, Pr%$)%&e!- Te$"' E.%"%($
E0= /18
Fan ;''upanthe is the *oo::eepe %o @os'oe Co(pan#. Fan has *een t#ing to get the
*alan'e sheet o% @os'oe Co(pan# to *alan'e. @os'oe Js *alan'e sheet is as %ollo)s.
ROSCOE COMPANY
1alan'e !heet
?e'e(*e 31- 2012
Assets <ia*ilities
Cash G7-400 A''ounts pa#a*le G25-000
!upplies 7-100 A''ounts e'ei+a*le 819-5009
0quip(ent 45-000 ;)neJs 'apital 63-200
;)neJs "a)ings 9-200 Total lia*ilities an"
Total assets G68-700 o)neJs equit# G68-700
I$!"ru)"%($!
Pepae a 'oe't *alan'e sheet.
S(u"%($ /18
ROSCOE COMPANY
1alan'e !heet
?e'e(*e 31- 2012
Assets
Cash G 7-400
!upplies 7-100
0quip(ent 45-000
<ia*ilities an" ;)neJs 0quit#
<ia*ilities
A''ounts pa#a*le G25-000
;)neJs equit#
;)neJs 'apital 8G63-200 I G9-2009 54-000
!;8 1T2 AN ?i%%i'ult#2 /e"iu( T;T2 5 (in. AAC!12 Anal#ti'al A4CPA 112 Citi'al Thin:ing A4CPA .N2
@epoting
1 - 7:
E0= /19
Pesente" *elo) is in%o(ation elate" to the sole popietoship o% Anthon# !'ali'i- 'onsultant.
!e+i'e e+enueA2012 G340-000
Total e,pensesA2012 213-000
Assets- Hanua# 1- 2012 85-000
<ia*ilities- Hanua# 1- 2012 64-000
Assets- ?e'e(*e 31- 2012 165-000
<ia*ilities- ?e'e(*e 31- 2012 80-000
?a)ingsA2012 D
I$!"ru)"%($!
Pepae the 2012 o)neJs equit# state(ent %o Anthon# !'ali'iJs 'onsulting 'o(pan#.
S(u"%($ /19
ANTHONY SCALICI- ATTORNEY
.o the Qea 0n"e" ?e'e(*e 31- 2012
;)neJs Capital- Hanua# 1 G 21-000 8a9
A""2 Net in'o(e 127-000 8*9
148-000
<ess2 ?a)ings 63-000
;)neJs Capital- ?e'e(*e 31 G 85-000 8'9
!uppoting Co(putations
8a9 Assets- Hanua# 1- 2012 G85-000
<ia*ilities- Hanua# 1- 2012 864-0009
Capital- Hanua# 1- 2012 G21-000
8*9 <egal %ees eane" G340-000
Net in'o(e G127-000
8'9 Assets- ?e'e(*e 31- 2012 G165-000
<ia*ilities- ?e'e(*e 31- 2012 880-0009
Capital- ?e'e(*e 31- 2012 G 85-000
.N2 @epoting
1 - 7;
Te!" Ba$* +(r A))(u$"%$, Pr%$)%&e!- Te$"' E.%"%($
E0= /1:
Pepae an in'o(e state(ent- an o)ne>s equit# state(ent- an" a *alan'e sheet %o the
a''upun'tue pa'ti'e o% $ol"a 1ea- %o( the ite(s liste" *elo) %o the (onth o% !epte(*e.
;)neJs Capital- !epte(*e 1 G47-000
0quip(ent 35-000
!e+i'e e+enue 28-000
!upplies e,pense 4-500
Cash 6-000
!upplies 4-800
@ent e,pense 2-000
$;<?A 10A@- ACCBPBNCTB@4!T
4n'o(e !tate(ent
.o the /onth 0n"e" !epte(*e 30- 2012
@e+enues G
0,penses G G

Total e,penses G

Net in'o(e G
;)ne>s 0quit# !tate(ent
;)neJs Capital- !epte(*e 1 G
A""2

G
<ess2

G
1 - 8>
E0= /1: 8'ont.9
1alan'e !heet
!epte(*e 30- 2012
Assets
G
Total assets
G
<ia*ilities an" ;)ne>s 0quit#
<ia*ilities
G
;)ne>s 0quit# G
Total lia*ilities an" o)ne>s equit# G
S(u"%($ /1:
4n'o(e !tate(ent
@e+enues
!e+i'e e+enue.............................................................................. G28-000
0,penses
!alaies e,pense............................................................................. G9-000
!upplies e,pense............................................................................ 4-500
@ent e,pense.................................................................................. 2-000
Btilities e,pense.............................................................................. 700
Total e,penses.......................................................................... 16-200
Net in'o(e................................................................................ G 11-800
;)neJs Capital- !epte(*e 1.............................................................. G47-000
A""2 Net in'o(e.................................................................................... 11-800
58-800
<ess2 ?a)ings...................................................................................... 6-000
;)neJs Capital- !epte(*e 30............................................................. G52-800
1 - 81
Te!" Ba$* +(r A))(u$"%$, Pr%$)%&e!- Te$"' E.%"%($
S(u"%($ /1: 8'ont.9
1alan'e !heet
!epte(*e 30- 2012
Assets
Cash...................................................................................................... G 6-000
A''ounts e'ei+a*le.............................................................................. 14-000
!upplies................................................................................................ 4-800
0quip(ent............................................................................................. 35-000
Total assets..................................................................................... G59-800
<ia*ilities an" ;)ne>s 0quit#
<ia*ilities
A''ounts pa#a*le............................................................................ G 7-000
;)ne>s 0quit#
;)neJs 'apital................................................................................ 52-800
Total lia*ilities an" o)ne>s equit#................................................... G59-800
!;8 1T2 AP ?i%%i'ult#2 Ea" T;T2 15 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2
@epoting
E0= /1;
4n"i'ate )hethe the %ollo)ing ite(s )oul" appea on the *alan'e sheet 81!9- in'o(e state(ent
84!9- o o)ne>s equit# state(ent 8;09.
1. A"+etising e,pense
2. A''ounts e'ei+a*le
3. ;)neJs "a)ings
4. @ent e+enue
5. !alaies pa#a*le
6. !upplies
S(u"%($ /1; 85 (in.9
1. 4n'o(e state(ent 84!9 4. 4n'o(e state(ent 84!9
2. 1alan'e sheet 81!9 5. 1alan'e sheet 81!9
3. ;)ne>s equit# state(ent 8;09 6. 1alan'e sheet 81!9
@epoting
1 - 8/
E0= //>
<iste" *elo) in alpha*eti'al o"e ae the *alan'e sheet ite(s o% @o': Pla6a Cental Co(pan# at
?e'e(*e 31- 2011. Pepae a *alan'e sheet an" in'lu"e a 'o(plete hea"ing.
A''ounts Pa#a*le G 24-000
A''ounts @e'ei+a*le 15-000
1uil"ings 56-000
Cash 7-000
;)neJs Capital 107-000
<an" 42-000
0quip(ent 11-000
.N2 @epoting
S(u"%($ //> 85 (in.9
@;CK P<ATA C0NT@A<
1alan'e !heet
?e'e(*e 31- 2011
A!!0T!
Cash G 7-000
<an" 42-000
1uil"ings 56-000
0quip(ent 11-000
<4A14<4T40!
;5N0@>! 0KB4TQ
Total lia*ilities an" o)ne>s equit# G131-000
.N2 @epoting
1 - 85
Te!" Ba$* +(r A))(u$"%$, Pr%$)%&e!- Te$"' E.%"%($
E0= //1
;ne ite( is o(itte" in ea'h o% the %ollo)ing su((aies o% *alan'e sheet an" in'o(e state(ent
"ata %o thee "i%%eent sole popietoships- O- Q- an" T. ?ete(ine the a(ounts o% the (issing
ite(s- i"enti%#ing ea'h popietoship *# lette.
Popietoship
O Q T
1eginning o% the Qea2
Assets G380-000 G150-000 G199-000
<ia*ilities 250-000 105-000 168-000
0n" o% the Qea2
Assets 450-000 185-000 195-000
<ia*ilities 280-000 95-000 169-000
?uing the Qea2
A""itional 4n+est(ent *# the o)ne D 79-000 80-000
5ith"a)als *# the o)ne 90-000 83-000 D
@e+enue 195-000 D 187-000
0,penses 170-000 113-000 175-000
S(u"%($ //1
Popietoship O 8G105-0009
1eginning Capital *alan'e 8G380-000 I G250-0009 G130-000
A""itional in+est(ents 8G260-000 I G130-000 I G25-0009 105-000
Net in'o(e %o #ea 8G195-000 I G170-0009 25-000
260-000
<ess )ith"a)als 90-000
0n"ing Capital *alan'e 8G450-000 I G280-0009 G170-000
Popietoship Q 8G162-0009
1eginning Capital *alan'e 8G150-000 I G105-0009 G 45-000
A""itional in+est(ents 79-000
Net in'o(e %o #ea 49-000
U@e+enues 3 G162-000 8G113-000 = G49-0009V 173-000
<ess )ith"a)als 83-000
0n"ing Capital *alan'e 8G185-000 I G95-0009 G 90-000
Popietoship T 8G97-0009
1eginning Capital *alan'e 8G199-000 I G168-0009 G 31-000
A""itional in+est(ents 80-000
Net in'o(e %o #ea 8G187-000 I G175-0009 12-000
123-000
<ess )ith"a)als 8G123-000 I G26-0009 97-000
0n"ing Capital *alan'e 8G195-000 I G169-0009 G 26-000
!;8 1T2 AN ?i%%i'ult#2 Ea" T;T2 10 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA PC2
Po*le( !ol+ing
1 - 86
E0= ///
4n"i'ate in the spa'e po+i"e" *# ea'h ite( )hethe it )oul" appea on the 4n'o(e !tate(ent
84!9- 1alan'e !heet 81!9- o ;)ne>s 0quit# !tate(ent 8;092
a. PPPPPP !e+i'e @e+enue g. PPPPPP A''ounts @e'ei+a*le
*. PPPPPP Btilities 0,pense h. PPPPPP /'Catne#- Capital 8en"ing9
'. PPPPPP Cash i. PPPPPP 0quip(ent
". PPPPPP A''ounts Pa#a*le 7. PPPPPP A"+etising 0,pense
e. PPPPPP ;%%i'e !upplies :. PPPPPP /'Catne#- ?a)ing
%. PPPPPP 5age 0,pense l. PPPPPP Notes Pa#a*le
S(u"%($ ///
a. 4! g. 1!
*. 4! h. ;0- 1!
'. 1! i. 1!
". 1! 7. 4!
e. 1! :. ;0
%. 4! l. 1!
@epoting
E0= //5
/aia Kueen )as e+ie)ing he *usiness a'ti+ities at the en" o% the #ea 820119 an" "e'i"e" to
pepae an ;)ne>s 0quit# !tate(ent. At the *eginning o% the #ea he assets )ee G500-000 an"
he lia*ilities )ee G190-000. At the en" o% the #ea the assets ha" go)n to G750-000 *ut
lia*ilities ha" also in'ease" to G340-000. The net in'o(e %o the #ea )as G220-000. /aia ha"
)ith"a)n G120-000 "uing the #ea %o his pesonal use.
Pepae an o)ne>s equit# state(ent in goo" %o(.
S(u"%($ //5
/A@4A KB00N
.o the Qea 0n"e" 2011
;)neJs 1eginning Capital G310-000
A""2 Net 4n'o(e 220-000
530-000
<ess2 ?a)ings 120-000
;)neJs 0n"ing Capital G410-000
.N2 @epoting
1 - 87
Te!" Ba$* +(r A))(u$"%$, Pr%$)%&e!- Te$"' E.%"%($
E0= //6
At !epte(*e 1- the *alan'e sheet a''ounts %o !tanle#Js @estauant )ee as %ollo)s2
A''ounts Pa#a*le G 3-800 <an" G33-000
A''ounts @e'ei+a*le 1-600 ;)neJs Capital D
1uil"ings 68-000 Notes Pa#a*le 48-000
Cash 10-000 !upplies 6-600
0quip(ent 18-700
The %ollo)ing tansa'tions o''ue" "uing the ne,t t)o "a#s2
!tanle# in+este" an a""itional G22-000 'ash in the *usiness. The a''ounts pa#a*le )ee pai" in
%ull. 8No pa#(ent )as (a"e on the notes pa#a*le.9
I$!"ru)"%($!
Pepae a *alan'e sheet at !epte(*e 3- 2011.
S(u"%($ //6
!TAN<0Q>! @0!TAB@ANT
1alan'e !heet
!epte(*e 3- 2011
A!!0T!
Cash G 28-200
!upplies 6-600
<an" 33-000
1uil"ings 68-000
0quip(ent 18-700
<4A14<4T40!
A''ounts pa#a*le G &0&
Notes pa#a*le 48-000
;5N0@>! 0KB4TQ
Total lia*ilities an" o)ne>s equit# G156-100
Cash 8G10-000 = G22-000 I G3-8009 3 G28-200
A''ounts Pa#a*le 8G3-800 I G3-8009 3 G0
;)neJs Capital2 1eginning *alan'e 8G137-900 I G51-8009 G 86-100
A""itional in+est(ent 22-000
0n"ing *alan'e G108-100
!;8 1T2 AP ?i%%i'ult#2 Ea" T;T2 10 (in. AAC!12 Anal#sis A4CPA 112 Citi'al Thin:ing A4CPA PC2 Po*le(
!ol+ing
1 - 88
E0= //7
Pesente" *elo) ae *alan'e sheet ite(s %o 1la': Angel Co(pan# at ?e'e(*e 31- 2011.
A''ounts pa#a*le G30-000
Cash 17-000
0quip(ent 72-000
Notes pa#a*le 50-000
Co(pute ea'h o% the %ollo)ing2
1. Total assets.
2. Total lia*ilities.
S(u"%($ //7
1. Total assets 3 G125-000 8G36-000 = G17-000 = G72-0009
2. Total lia*ilities 3 G80-000 8G30-000 = G50-0009
@epoting
1 - 89
Te!" Ba$* +(r A))(u$"%$, Pr%$)%&e!- Te$"' E.%"%($
COMPLETION STATEMENTS
226. A''ounting is an in%o(ation s#ste( that i"enti%ies- PPPPPPPPPPPPP- an" PPPPPPPPPPPPP
the e'ono(i' e+ents o% an ogani6ation.
227. The (ee e'o"ing o% e'ono(i' e+ents is 'alle" PPPPPPPPPPPPPP- an" is 7ust one pat o%
the PPPPPPPPPPPPPPP po'ess.
228. The thee (a7o se+i'es en"ee" *# a 'eti%ie" pu*li' a''ountant ae PPPPPPPPPPPPPP-
PPPPPPPPPPPPPPPP- an" (anage(ent PPPPPPPPPPPPPPPP.
229. A''ountants )ho ae e(plo#ees o% *usiness entepises ae e%ee" to as
PPPPPPPPPPPPPPPP a''ountants.
230. A 'o((on set o% stan"a"s that po+i"es gui"elines to a''ountants an" in"i'ates ho) to
epot e'ono(i' e+ents is 'alle" PPPPPPPPPPPPPPPPP.
231. The PPPPPPPPPPPPPPPP pin'iple states that assets shoul" *e e'o"e" at the +alue
e,'hange" at the ti(e the asset is a'quie".
232. The PPPPPPPPPPPPPPPPP assu(ption equies that the a'ti+ities o% an entit# *e :ept
sepaate %o( the a'ti+ities o% its o)ne.
233. The esi"ual 'lai( on total assets o% a *usiness is :no)n as PPPPPPPPPPPPPPPP an" is
equal to total assets (inus total lia*ilities.
234. ?a)ings PPPPPPPPPPPPPPPP o)ne>s equit# *ut ae not e,penses.
235. The PPPPPPPPPPPPPPPP epots the assets- lia*ilities- an" o)ne>s equit# o% a *usiness
entepise at a spe'i%i' "ate.
A$!<er! "( C(#&e"%($ S"a"e#e$"!
226. e'o"s- 'o((uni'ates 231. 'ost
227. *oo::eeping- a''ounting 232. e'ono(i' entit#
228. au"iting- ta,ation- 'onsulting 233. o)ne>s equit#
229. pi+ate 8o (anageial9 234. e"u'e
230. geneall# a''epte" a''ounting pin'iples 235. *alan'e sheet
!;1&8 1T2 K ?i%%i'ult#2 0as# T;T2 3 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2
@epoting
1 - 8:
MATCHING
236. /at'h the ite(s *elo) *# enteing the appopiate 'o"e lette in the spa'e po+i"e".
A. CPA .. Copoation
1. 1u"geting $. Assets
C. !0C E. 0quities
?. Popietoship 4. 0,penses
0. 0'ono(i' 0ntit# Assu(ption H. Tansa'tion
PPPPPP 1. A'ti+ities o% an entit# (ust *e :ept sepaate %o( its o)neJs a'ti+ities.
PPPPPP 2. Consu(e" assets o se+i'es.
PPPPPP 3. ;)neship is li(ite" to one peson.
PPPPPP 4. ;%%es e,pet a''ounting se+i'e to the geneal pu*li'.
PPPPPP 5. Ce"ito an" o)neship 'lai(s against the assets o% the *usiness.
PPPPPP 6. A sepaate legal entit# un"e state la)s.
PPPPPP 7. $o+en(ent agen'# that 'an (an"ate a''ounting ules.
PPPPPP 8. Kuanti%#ing goals an" o*7e'ti+es.
PPPPPP 9. .utue e'ono(i' *ene%its.
PPPPPP10. 0'ono(i' e+ents e'o"e" *# a''ountants.
A$!<er! "( Ma")'%$,
1. 0 6. .
2. 4 7. C
3. ? 8. 1
4. A 9. $
5. E 10. H
!;1&8 1T2 K ?i%%i'ult#2 0as# T;T2 3 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2
@epoting
1 - 8;
Te!" Ba$* +(r A))(u$"%$, Pr%$)%&e!- Te$"' E.%"%($
SHORT-ANSCER ESSAY QUESTIONS
S-A E /59
The a''ounting po%ession po+i"es (an# 'aee oppotunities %o in"i+i"uals. 4"enti%# the (a7o
%iel"s that e,ist in a''ounting an" 'o((ent on the (a7o %un'tions pe%o(e" *# in"i+i"uals in
ea'h o% these aeas.
S(u"%($ /59
The (a7o %iel"s that e,ist in a''ounting ae in the aeas o% 819 pu*li' a''ounting- 829 pi+ate
a''ounting- an" 839 not&%o&po%it a''ounting. 4n pu*li' a''ounting- an a''ountant (a# pa'ti'e as2
819 an au"ito )ho e,a(ines the %inan'ial state(ents o% 'o(panies an" e,pesses an opinion as
to the %ainess o% pesentationC 829 a ta, spe'ialist )ho gi+es ta, a"+i'e- pepaes ta, etuns- an"
epesents 'lients *e%oe go+en(ental agen'iesC an" 839 a (anage(ent a''ountant )ho
engages in the "e+elop(ent o% a''ounting an" 'o(pute s#ste(s an" the "esign o%
ogani6ational s#ste(s.
Pi+ate 8(anageial9 a''ountants pe%o( (an# "i%%eent a'ti+ities )ithin a 'o(pan#. Pi+ate
a''ountants (a# *e in+ol+e" in2 'ost a''ounting- *u"geting- geneal %inan'ial a''ounting-
a''ounting in%o(ation s#ste(s- an" ta, a''ounting.
!;9 1T2 K ?i%%i'ult#2 /e"iu( T;T2 5 (in. AAC!12 Co((uni'ation A4CPA 112 Citi'al Thin:ing A4CPA .N2
@epoting
S-A E /5:
The %a(e)o: use" to e'o" an" su((ai6e the e'ono(i' a'ti+ities o% a *usiness entepise is
e%ee" to as the a''ounting equation. !tate the *asi' a''ounting equation an" "e%ine its (a7o
'o(ponents. Eo) ae *usiness tansa'tions an" %inan'ial state(ents elate" to the a''ounting
equationD
S(u"%($ /5:
The *asi' a''ounting equation is e,pesse" as %ollo)s2
Assets ae "e%ine" as esou'es o)ne" *# the *usiness. <ia*ilities ae 'e"itoship 'lai(s against
the assets o% the *usinessC o si(pl# put- lia*ilities ae e,isting "e*ts an" o*ligations. ;)ne>s
equit# is the o)neship 'lai( on the total assets o% the *usinessC it is equal to total assets (inus
total lia*ilities.
1usiness tansa'tions ae e'ono(i' e+ents an" a'ti+ities that a%%e't the ele(ents o% the *asi'
a''ounting equationC that is- tansa'tions 'ause in'eases o "e'eases in the assets- lia*ilities-
an" o)ne>s equit#. The %inan'ial state(ents epot the esults an" e%%e'ts o% tansa'tions on the
*usiness> assets- lia*ilities- an" o)ne>s equit#. The *alan'e sheet is a su((a# e,pession o%
the *asi' a''ounting equation.
!;6 1T2 C ?i%%i'ult#2 /e"iu( T;T2 4 (in. AAC!12 Co((uni'ation A4CPA 112 Citi'al Thin:ing A4CPA .N2
@epoting
1 - 9>
S-A E /5;
Qou %ien"- Angela- (a"e this 'o((ent2
/# (a7o is *iolog# an" 4 plan to esea'h %o 'ues %o (a7o illnesses. Thus- 4 ha+e
no nee" to stu"# a''ounting.
5hat is #ou esponse to AngelaD
S(u"%($ /5;
Angela- #ou ae enteing a "#na(i' po%ession an" #ou ha+e the oppotunit# to (a:e i(potant
'onti*utions to so'iet#. 5hile s'ien'e )ill *e #ou po%ession an" (a7o 'on'en- #ou )ill not *e
a*le to es'ape the nee" to un"estan" a''ounting. A''ounting sta%% an" po%essionals )ill al)a#s
*e a+aila*le to assist #ou. Eee ae so(e aeas that )ill "ie'tl# a%%e't #ou2
As a (anage- #ou )ill nee" to e+ie) a''ounting in%o(ation 8*oth intenal an" e,tenal9 an"
(a:e "e'isions. 1u"gets )ill *e an i(potant pat o% #ou esea'h a'ti+ities. As an e(plo#ee-
#ou )ill *e 'on'ene" a*out the %inan'ial in%o(ation o% #ou e(plo#e. Thus- #ou )ill nee" to *e
a*le to ea" the 'o(pan#Js %inan'ial state(ents. Also- as an in+esto- #ou )ill *e inteeste" in the
%inan'ial state(ents o% othe 'o(panies.
Qou )ill po*a*l# not *e a pepae o% the %inan'ial state(ents- *ut #ou "o nee" an un"estan"ing
o% ho) the# ae pepae". Qou also nee" a goo" un"estan"ing o% ho) to intepet the
in%o(ation on the %inan'ial state(ents.
!;2 1T2 ! ?i%%i'ult#2 Ea" T;T2 5 (in. AAC!12 Co((uni'ation A4CPA 112 Citi'al Thin:ing A4CPA .N2
@epoting
S-A E /6>
The in%o(ation nee"s o% a spe'i%i' use o% %inan'ial a''ounting in%o(ation "epen"s upon the
:in"s o% "e'isions that use (a:es. 4"enti%# the (a7o uses o% a''ounting in%o(ation an"
"is'uss )hat questions %inan'ial a''ounting in%o(ation ans)es %o ea'h goup o% uses.
S(u"%($ /6>
The (a7o uses o% a''ounting in%o(ation ae intenal uses an" e,tenal uses. 4ntenal uses
ae those )ho (anage the *usiness. 0,tenal uses ae those outsi"e the *usiness )ho ha+e
eithe a pesent o potential %inan'ial inteest.
.inan'ial a''ounting in%o(ation (a# ans)e the %ollo)ing questions %o intenal uses2
1. 4s 'ash su%%i'ient to pa# ou "e*tsD
2. Can )e a%%o" to gi+e e(plo#ee pa# aises this #eaD
3. 5hat is the 'ost o% (anu%a'tuing ea'h unit o% po"u'tD
4. 5hi'h po"u't line is the (ost po%ita*leD
Kuestions ans)ee" *# %inan'ial a''ounting in%o(ation %o e,tenal uses in'lu"e2
1. 4s the 'o(pan# eaning satis%a'to# in'o(eD
2. Eo) "oes the 'o(pan# 'o(pae in si6e an" po%ita*ilit# )ith 'o(petitosD
3. 5ill the 'o(pan# *e a*le to pa# its "e*ts as the# 'o(e "ueD
!;2 1T2 C ?i%%i'ult#2 /e"iu( T;T2 5 (in. AAC!12 @e%le'ti+e Thin:ing A4CPA 112 Citi'al Thin:ing A4CPA .N2
@epoting
1 - 91
Te!" Ba$* +(r A))(u$"%$, Pr%$)%&e!- Te$"' E.%"%($
S-A E /61 80thi's9
Hoanna Ne)so( o)ns an" opeates Hoanna>s 1uges- a s(all %ast %oo" stoe- lo'ate" at the
e"ge o% Cit# College 'a(pus in Ne)ton- ;hio. A%te se+eal +e# po%ita*le #eas- Hoanna>s
1uges *egan to ha+e po*le(s. /ost o% the po*le(s )ee elate" to Hoanna>s e,pansion o% the
eating aea in the estauant )ithout 'oespon"ing in'eases in the %oo" pepaation aea.
Hoanna "oes not ha+e the 'ash o %inan'ial *a':ing to e,pan" %uthe. !he has thee%oe "e'i"e"
to sell he *usiness.
Fi+ian $ils is inteeste" in pu'hasing the *usiness. Eo)e+e- she is lo'ate" in anothe 'it# an"
is un%a(ilia )ith Ne)ton. !he has as:e" Hoanna )h# she is selling Hoanna>s 1uges. Hoanna
eplies that he el"el# (othe equies e,ta 'ae- an" that he *othe nee"s help in his
(anu%a'tuing *usiness. 1oth ae tue- *ut neithe is his pi(a# eason %o selling. Hoanna
easons that Fi+ian shoul" not ha+e as:e" he an#)a#- sin'e po%ita*le *usinesses "on>t 'o(e
up %o sale.
ReAu%re.D
1. 4"enti%# the sta:ehol"es in this situation.
2. ?i" Hoanna a't ethi'all# in not e+ealing %ull# his easons %o selling the *usinessD 5h# o
)h# notD
S(u"%($ /61
1. The sta:ehol"es in'lu"e
Hoanna Ne)so(
Fi+ian $ils
Ne)ton- ;hio
stu"ents o% Cit# College
Cit# College
pesons %inan'ing the pu'hase o% !a(>s 1uges
2. Hoanna "i" not a't ethi'all# in not e+ealing %ull# he easons %o selling the *usiness.
!tu"ents (ight *e o% the opinion that a pu'hase shoul" in+estigate a *usiness *e%oe
pu'hasing it- athe than el#ing entiel# on the selle>s assetions. Eo)e+e- stu"ents shoul"
eali6e that Hoanna shoul" ha+e sai" so(ething a*out his po*le(s. Ee (ight ethi'all# *e
allo)e" to put these in the *est possi*le light- pehaps- *ut %ailue to "is'lose the( at all is
'etainl# unethi'al. This is espe'iall# tue- sin'e %a(il# 'on'ens (ight )ell 'ause so(eone to
sell a *usiness that is othe)ise "oing )ell. Hoanna has sho)n an intent to "e'ei+e that is
unethi'alan" (ight *e a'tiona*le in 'out as )ell.
!;3 1T2 0 ?i%%i'ult#2 /e"iu( T;T2 5 (in. AAC!12 0thi's A4CPA 112 Citi'al Thin:ing A4CPA .N2 @epoting
S-A E /6/ 8Co((uni'ation9
@a'hel 1ells Ea+ens is a %ien" o% #ous %o( high s'hool. !he "e'i"e" to *e'o(e a *eauti'ian
a%te lea+ing high s'hool- athe than to atten" 'ollege. !he e'entl# opene" he o)n shop- an"
has 'onta'te" he se+i'es to a lo'al hospital. !he is pai" a (onthl# %ee %o he se+i'es- an"
e'ei+es a s(all gatuit# %o( ea'h o% the patients.
1 - 9/
!he has 7ust e'ei+e" he %ist set o% %inan'ial state(ents %o( he a''ountant. !he is quite upset.
The state(ents sho) a 'ash *alan'e o% G3-600 at the en" o% the (onth- *ut a net in'o(e o% onl#
G500. !he has )itten #ou a lette- as:ing #ou )hethe su'h a situation is possi*le- o )hethe
she shoul" %in" anothe a''ountant.
ReAu%re.D
5ite a shot lette to #ou %ien". Bse pope %o(. Ans)e he question 'o(pletel#- *ut *ie%l#.
S(u"%($ /6/
Ans)es )ill +a#. The instu'to>s equie(ents 'on'ening pope %o( shoul" *e %ollo)e". The
lette (a# *e eithe *usiness o pesonal. As a (ini(u(- the lette shoul" *e in a e'ogni6a*le
%o(- an" pope ga((a an" spelling shoul" *e use". Neat easues an" 'oe'tions (ight *e
allo)e". A suggeste" pesonal lette %ollo)s2
1245 <il# <ane
1uena Fista- A@ 77661
8?ate9
?ea @a'hel-
Congatulations on opening #ou *usinessW 4 a( sue #ou )ill "o )ell- 'o(*ining
#ou 'eati+e genius )ith #ou talent %o se+ing othes.
Qou as:e" a*out #ou %inan'ial state(ents. ;% 'ouse- #ou eali6e that 4 a( 7ust an
a''ounting stu"ent- *ut 4 "o :no) that it is possi*le to ha+e a lage 'ash *alan'e
an" little net in'o(e. Qou (a# ha+e ha" e,penses that )ee not pai" in 'ash #et.
These e,penses e"u'e #ou in'o(e- *ut not #ou 'ash.
4 thin: that #ou shoul" "is'uss the state(ents )ith the a''ountant )ho pepae"
the(. Ee o she )ill *e in the *est position to e,plain the esults.
Than:s %o the question. 4t eall# (a"e (e thin:.
!in'eel#-
8signatue9
!;8 1T2 C ?i%%i'ult#2 /e"iu( T;T2 5 (in. AAC!12 Co((uni'ation A4CPA 112 Citi'al Thin:ing A4CPA .N2
@epoting
1 - 95

Accounting in Action: Summary of Questions by Study Objectives and Bloom'S Taxonomy

Enviado por

Dados do documento

Título original

Direitos autorais

Formatos disponíveis

Compartilhar este documento

Compartilhar ou incorporar documento

Opções de compartilhamento

Você considera este documento útil?

Este conteúdo é inapropriado?

Direitos autorais:

Formatos disponíveis

Accounting in Action: Summary of Questions by Study Objectives and Bloom'S Taxonomy

Enviado por

Direitos autorais:

Formatos disponíveis

CHAPTER 1

Você também pode gostar