Chapter 1: Q20DQ (page 29)
What do accountants mean by the term revenue?
Accountants are professionals who performs accounting functions, and revenue is defined as the amount received on providing goods or services
Over 30 million students worldwide already upgrade their learning with Vaia!
All the tools & learning materials you need for study success - in one app.
Get started for free
Identify how each of the following separate transactions 1 through 10 affects financial statements. For increases, place a “+” and the dollar amount in the column or columns. For decreases, place a “−” and the dollar amount in the column or columns. Some cells may contain both an increase (+) and a decrease (−) along with dollar amounts. The first transaction is completed as an example. Required
b. For the statement of cash flows, identify how each transaction affects cash flows from operating activities, cash flows from investing activities, and cash flows from financing activities.
1 Owner invests \(800 cash in business in exchange for stock +800 +800 +800
2 Purchases \)100 of supplies on credit
3 Buys equipment for \(400 cash
4 Provides services for \)900 cash
5 Pays \(400 cash for rent incurred
6 Incurs \)200 utilities costs on credit
7 Pays \(300 cash for wages incurred
8 Pays \)50 cash for dividends
9 Provides \(600 services on credit
10 Collects \)600 cash on accounts receivable
Ski-Doo Company manufactures, markets, and sells snowmobiles and snowmobile equipment and accessories. The average total assets for Ski-Doo is \(3,000,000. In its most recent year, Ski-Doo reported net income of \)201,000 on revenues of $1,400,000.
Required 1. What is Ski-Doo Company’s return on assets?
Rivera Roofing Company, owned by Reyna Rivera, began operations in July and completed these transactions during that first month of operations.
July 1 Reyna Rivera invested \(80,000 cash in the company in exchange for its common stock.
2 The company rented office space and paid \)700 cash for the July rent.
3 The company purchased roofing equipment for \(5,000 by paying \)1,000 cash and agreeing to pay the \(4,000 balance in 30 days.
6 The company purchased office supplies for \)600 cash.
8 The company completed work for a customer and immediately collected \(7,600 cash for the work.
10 The company purchased \)2,300 of office equipment on credit.
15 The company completed work for a customer on credit in the amount of \(8,200.
17 The company purchased \)3,100 of office supplies on credit.
23 The company paid \(2,300 cash for the office equipment purchased on July 10.
25 The company billed a customer \)5,000 for work completed; the balance is due in 30 days.
28 The company received \(8,200 cash for the work completed on July 15.
30 The company paid an assistant’s salary of \)1,560 cash for this month.
31 The company paid \(295 cash for this month’s utility bill.
31 The company paid \)1,800 cash in dividends to the owner (sole shareholder).
Required 3. Prepare the statement of cash flows for the month of July.
Question: What type of accounting information might be useful to the marketing managers of a business?
Enter the letter A through H for the principle or assumption in the blank space next to each numbered description that it best reflects.
A. General accounting principle
B. Cost principle
C. Business entity assumption
D. Revenue recognition principle
E. Specific accounting principle
F. Matching (expense recognition) principle
G. Going-concern assumption
H. Full disclosure principle
1. A company reports details behind financial statements that would impact users’ decisions.
2. Financial statements reflect the assumption that the business continues operating.
3. A company records the expenses incurred to generate the revenues reported.
4. Derived from long-used and generally accepted accounting practices.
5. Each business is accounted for separately from its owner or owners.
6. Revenue is recorded when products and services are delivered.
7. Usually created by a pronouncement from an authoritative body.
8. Information is based on actual costs incurred in transactions.
What do you think about this solution?
We value your feedback to improve our textbook solutions.
