Chapter 1: Q. 1-17E (page 37)
Use the information in Exercise 1-15 to prepare an October 31 balance sheet for Ernst Consulting. Hint: The solution to Exercise 1-16 can help.
The balance sheet shows assets, liabilities, and equity and the total of the balance sheet is $92,610.
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Identify in outline format the three major business activities of an organization. For each of these activities, identify at least two specific transactions or events normally undertaken by the business’s owners or its managers.
The following describe several different business organizations. Determine whether each description best refers to a sole proprietorship (SP), partnership (P), or corporation (C).
a. Micah and Nancy own Financial Services, a financial services provider. Neither Micah nor Nancy has personal responsibility for the debts of Financial Services.
b. Riley and Kay own Speedy Packages, a courier service. Both are personally liable for the debts of the business.
c. IBC Services does not have separate legal existence apart from the one person who owns it.
d. Trent Company is owned by Trent Malone, who is personally liable for the company’s debts.
e. Ownership of Zander Company is divided into 1,000 shares of stock.
f. Physio Products does not pay income taxes and has one owner.
g. AJ Company pays its own income taxes and has two owners.
What is the purpose of the statement of retained earnings?
What work do tax accounting professionals perform in addition to preparing tax returns?
Question: Accounting is an information and measurement system that identifies, records, and communicates relevant, reliable, and comparable information about an organization’s business activities. Classify the following activities as part of the identifying (I), recording (R), or communicating (C) aspects of accounting. 1. Analyzing and interpreting reports. 2. Presenting financial information. 3. Keeping a log of service costs. 4. Measuring the costs of a product. 5. Preparing financial statements. 6. Seeing revenues generated from a service. 7. Observing employee tasks behind a product. 8. Registering cash sales of products sold.
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