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ACT (Lecture 2)

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19 views

ACT (Lecture 2)

Uploaded by

count.d.ville
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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List of Assets

 Cash List of Liabilities


 Accounts Payable
 Accounts Receivable
 Notes Payable
 Inventory
 Short-term Loans Payable
 Prepaid Expenses
 Accrued Expenses
 Marketable Securities
 Salaries Payable
 Supplies
 Interest Payable
 Short-term Loans Receivable
 Taxes Payable
 Land
 Dividends Payable
 Buildings
 Unearned Revenue
 Furniture
 Customer Deposits
 Equipment
 Bonds Payable
 Vehicles
 Mortgages Payable
 Intangible Assets (e.g., patents,
 Lease Liabilities
trademarks)  Long-term Loans Payable
 Long-term Investments
 Deferred Tax Liabilities
 Goodwill
 Pension Liabilities
 Construction in Progress
 Contingent Liabilities
 Natural Resources
 Advances from Customers
 Deposit Assets
List of Revenue List of Expenses
 Sales Revenue  Salaries and Wages Expense
 Service Revenue  Rent Expense List of Owner’s Equity
 Utilities Expense  Capital Contributions
 Interest Revenue
 Depreciation Expense  Retained Earnings
 Rental Income
 Advertising Expense  Owner’s Drawings (or Withdrawals)
 Dividend Income
 Insurance Expense  Common Stock
 Commission
 Interest Expense  Preferred Stock
Revenue
 Office Supplies Expense  Additional Paid-in Capital
 Royalties Revenue
 Repairs and Maintenance Expense  Treasury Stock
 Consulting Revenue
 Travel and Entertainment Expense  Accumulated Other Comprehensive
 Subscription
 Taxes Expense Income
Revenue
 Legal and Professional Fees  Dividends Declared
 Licensing Revenue
 Research and Development  Partner’s Capital Accounts (for
 Advertising Revenue
 Gain on Sale of Expense partnerships)
Assets  Bad Debts Expense
 Franchise Revenue  Training and Development Expense
 Telephone and Internet Expense
Selected transactions for Fabulous Flora Company are listed below.
1. Made cash investment to start business.
2. Purchased equipment on account.
3. Paid salaries.
4. Billed customers for services performed.
5. Received cash from customers billed in (4).
6. Withdrew cash for owner’s personal use.
7. Incurred advertising expense on account.
8. Purchased additional equipment for cash.
9. Received cash from customers when service was performed.

List the numbers of the above transactions and describe the effect of each
transaction on assets, liabilities, and owner’s equity
Solution
1. Increase in assets and increase in owner’s equity.
2. Increase in assets and increase in liabilities.
3. Decrease in assets and decrease in owner’s equity.
4. Increase in assets and increase in owner’s equity.
5. Increase in assets and decrease in assets.
6. Decrease in assets and decrease in owner’s equity.
7. Increase in liabilities and decrease in owner’s equity.
8. Increase in assets and decrease in assets.
9. Increase in assets and increase in owner’s equity.
Alma’s Payroll Services Company entered into the following transactions during May
2020.
1. Purchased computers for $15,000 from Bytes of Data on account.
2. Paid $3,000 cash for May rent on storage space.
3. Received $12,000 cash from customers for contracts billed in April.
4. Performed payroll services for Magic Construction Company for $2,500 cash.
5. Paid Northern Ohio Power Co. $7,000 cash for energy usage in May.
6. Alma invested an additional $25,000 in the business.
7. Paid Bytes of Data for the computers purchased in (1) above.
8. Incurred advertising expense for May of $900 on account.
Solution:
1. an increase in assets and an increase in liabilities.
2. a decrease in assets and a decrease in owner’s equity.
3. an increase in assets and a decrease in assets.
4. an increase in assets and an increase in owner’s equity.
5. a decrease in assets and a decrease in owner’s equity.
6. an increase in assets and an increase in owner’s equity.
7. a decrease in assets and a decrease in liabilities.
8. an increase in liabilities and a decrease in owner’s equity

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