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ACCT 212 WEEK 4 MIDTERM.
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ACCT 212 WEEK 4 MIDTERM.
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ACCT 212 WEEK 4 MIDTERM(TCO 1) The Accounting Equation is used to develop the organization's financial reports. (1) Describe what owners'
equity values would be if Assets are $100,000 and Liabilities are $27,000 by showing the Accounting Equation (10
points) and (2) provide an explanation of what accounts could be found in owners' equity. (10 points)
Student Answer: The owners equity would like this in the accounting equation if
assets are $100,000 and liabilities are $27,000: Assets = owners
equity + liabilities Owners equity = assets – liabilities Owners
equity = 100,000 – 27,000 Owners equity = 73,000 The accounts
that can be found in the owner's equity are common stocks,
accounts payable and retained earnings.
Instructor Textbook pages 11-12. Owners' Equity = $100,000 - $27,000 = $73,000. Stock,
Explanation: Additional Paid in Capital, and Retained Earnings are examples.
Comments:
Question 2.Question : (TCO 1) The financial statements present a company to the public in financial
terms. (1) Which financial statement requires input from the Income Statement
and Statement of Retained Earnings (10 points), and (2) explain what information
this financial statement provides. (10 points)
Student Answer: The financial statement that requires input from the income
statement and statement of retained earnings is the balance sheet.
The information this financial statement provides is a company's
assets, liabilities, and capital which provides a detail look at the
company's financial position during a certain reporting period.
Instructor Textbook pages 15-21. Balance Sheet. Provides the balances of the accounting
Explanation: equation accounts.
Comments:
Question 3.Question : (TCO 1) The accounting profession follows a set of guidelines for measurement
and disclosure of financial information called the Generally Accepted
Accounting Principles (GAAP). (1) Explain what the International Financial
Reporting Standards (IFRS) are (10 points) and (2) provide an example of its
application. (10 points)
Student Answer: The International Financial Reporting Standards are accounting
, standards that provide public companies of how to report and
disclose their company's financial statements. The IFRS provides a
general guidance for companies of how to prepare their financial
statements then setting rules. An example of IFRS application
would be the following asset and equity statement: ASSETS
Liabilities and Equity Cash Land Common Stock 150,000 150,000 -
50,000 50,000 Bal 100,000 50,000 Total Assets 150,000 150,000
http://whatis.techtarget.com/definition/IFRS-International-
Financial-Reporting-Standards
Instructor Textbook pages 6-9. Standards that will make the global economy report using the
Explanation: same standards. The intention is to make raising capital easier for third-world
businesses.
Comments:
Question 4.Question : (TCO 2) Transaction analysis results in the development of a journal entry. A
building is purchased for $535,000. (1) Name the accounts impacted and how to
use the format account name/debit or credit/dollar amount (10 points), and (2)
explain how the Accounting Equation is impacted. (10 points)
Student Answer: The accounts impacted from the purchase of a building for
$535,000 would the building account, the cash/accounts payable
account. For the building account $535,000 would be listed under
the debit and the cash account the $535,000 would be listed under
the credit. The accounting equation is impacted by the building
account which is an asset would increase by $535,000 and the cash
account would decrease by $535,000.
Instructor Textbook page 64. Building/Debit/$535,000 and Cash/Credit/$535,000. Assets are
Explanation: increased and decreased by the same amount so the Accounting Equation is in
balance.
Comments:
Question 5.Question : (TCO 3) Adjusting Entries are required at the end of the period to ensure that
accrual accounting principles are applied. At the beginning of the month, $1,350
of office supplies were purchased. There was not a beginning balance and the one
purchase was the only one for the month. At the end of the month, $500 of
supplies remained. Develop the adjusting entry. (1) Name the accounts impacted
and how using the format account name/debit or credit/dollar amount (10 points),
and (2) explain how the Accounting Equation is impacted. (10 points)
Student Answer: The adjusting entry for office supplies purchased for $1350 with no
balance at the beginning month and the end of the month $500
remained would be: Supplies debit for $1350 Cash credit for $1350
End of month: Office expense debit $850 Supplies credit of $850
remaining balance $500 The accounts impacted were the supplies
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