P 1- 46B Req. E 1- 47 Req. P 1- 48 Req. Possible answers include the following: a. Which business is more profitable? A business must be profitable to survive. Which business owes more to creditors? Big debts make a business risky. Which business has more owner equity? More owner equity makes a business less risky.
In fact, they have no net income at all. Their accounting errors include the following: 1. The amount of cash in the bank does not measure net income. The cash balance only shows how much cash is available for use in the business. Neither an investment by an owner nor a bank loan creates a revenue. A business earns revenue by providing goods or services to customers. And a bank loan increases liabilities, not revenue. None of the items they list as expenses is really an expense.
The house and its renovation, furniture, kitchen equipment, and computer are all assets because these items provide future benefit to the business. Expenses are costs of doing business that have no lasting, or future value. The business will earn service revenue after it opens— from renting rooms. Expenses will result from incurring costs which have no lasting or future value.
There are two specific items to address. If it means reclassifying expenses in an effort to boost net income, it is false and dishonest. The ethical course of action for the CFO is to be open, honest and forthcoming about the reasons for the payments. It would distort the balance sheet by understating liabilities.
How to organize the business—as a proprietorship, a partnership, an LLC, or a corporation you have decided to organize as a proprietorship 2. Where to locate the business 3.
How much of your own time and money to commit to the business 4. How to finance the business—with your own personal money, with equity investments from others, or through borrowing 5. How many people to employ for the business 6. What type of animals to board dogs only, dogs and cats, birds, reptiles, and so on 8.
Whether to sell pet foods, toys, and other supplies 9. Whether to offer obedience lessons and other pet training How to advertise the business newspapers, radio, posters Student answers may vary. Obtain equity financing to start the business 2. Purchase land and a building 3.
Renovate the building to make it suitable for a kennel 4. Purchase pet food and other supplies that will be needed to operate a kennel 5. Advertise the business 6. Earn service revenue by keeping pets 7. Pay utility bills 8. Pay for veterinarian services needed for the animals 9.
Pay the wages of an employee Borrow money Drawings by owner Student answers may vary. Finally, you also need plenty of cash to continue in business. How to organize the business—as a proprietorship, a partnership, an LLC, or a corporation assume you have decided to organize as a proprietorship 2. By providing more meaningfullearning tools, this title helps readers clear hurdles, like never before.
Personalize learning with MyLab Accounting MyLab tm Accounting is an online homework, tutorial, and assessment program designed to work with this text to engage students and improve results.
Within its structured environment, students practice what they learn, test their understanding, and pursue a personalized study plan that helps them better absorb cours. Within its structured environment, students practice what they learn, test their understanding, and pursue a personalized study plan that helps them better absorb course material and understand difficult conc. Expanding on Proven Success with Horngren's Financial and Managerial Accounting Horngren's Financial and Managerial Accounting presents the core content of the accounting course in a fresh format designed to help today's learners succeed.
TheEleventh Edition expands on the proven success of the significant revision to the Horngren franchise and uses what the authors have learned from focus groups, market feedback, and colleagues to create livelier classrooms, provide meaningful learning tools, and give professors resources to help students inside and outside the class. First, the authors ensured that content was clear, consistent, and above all, accurate.
Every chapter is reviewed to ensure that students understand what they are reading and that there is consistency from chapter to chapter. The author team worked every single accounting problem and employed a team of accounting professors from across the nation to review for accuracy.
This edition continues the focus on student success and provides resources for professors to create an active and engaging classroom.
Through MyAccountingLab, students have the opportunity to watch author recorded solution videos, practice the accounting cycle using an interactive tutorial, and watch in-depth author-driven animated lectures that cover every learning objective. In addition, all instructor resources have been updated to accompany this edition of the book, including the PowerPoint presentations and Test Bank.
Popular Books. The Becoming by Nora Roberts. Fear No Evil by James Patterson. Mercy by David Baldacci. Flying Angels by Danielle Steel. The date on the journal entry should also be transferred to the accounts in the ledger. Step 5: Determine whether the accounting equation is in balance. After each entry the accounting equation should always be in balance.
Part 1: Date of the transaction. Part 2: Debit account name and dollar amount. Part 3: Credit account name and dollar amount. The credit account name is indented. Part 4: Brief explanation. When transactions are posted from the journal to the ledger, the dollar amount is transferred from the debit and credit columns to the specific accounts in the ledger. The date of the journal entry is also transferred to the accounts in the ledger. The posting reference columns in the journal and ledger are also completed.
In a computerized system, this step is completed automatically when the transaction is recorded in the journal. The trial balance is used to prove the equality of total debits and total credits of all accounts in the ledger; it is also used to prepare the financial statements. A trial balance verifies the equality of total debits and total credits of all accounts on the trial balance and is an internal document used only by employees of the company.
If total debits equal total credits on the trial balance, it does not mean that the trial balance is error- free. An incorrect amount could have been used, an entry could have been completely missed, or the wrong account title could have been debited or credited. The debt ratio is calculated by dividing total liabilities by total assets and shows the proportion of assets financed with debt.
Notes Receivable A f. Taxes Payable L b. New, Capital E g. Rent Expense E c. Prepaid Insurance A h. Furniture A d. Notes Payable L i. New, Withdrawals E e. Rent Revenue E j. Unearned Revenue L S a. Increase to Accounts Receivable DR f. Decrease to Prepaid Rent CR b. Decrease to Unearned Revenue DR g. Increase to Perry, Capital CR c. Decrease to Cash CR h. Increase to Notes Receivable DR d. Increase to Interest Expense DR i.
Decrease to Accounts Payable DR e. Increase to Salaries Payable CR j. Notes Payable CR f. Hernandez, Capital CR b. Hernandez, Withdrawals DR g. Utilities Expense DR c. Service Revenue CR h. Office Supplies DR d. Land DR i. Advertising Expense DR e. Unearned Revenue CR j. Requirement 2 Cash Accounts Payable Bal.
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