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Question 1.
Question
:
(TCO
1) The Accounting Equation is used to develop the organization’s
financial reports. (1) Describe what liabilities value would be if Assets
are $50,000 and Owners’ Equity is $25,000 by showing the Accounting
Equation (10 points) and (2) provide an example of two liability
accounts. (10 points)
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)
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 Going-concern
Assumption is (10 points) and (2) provide an example of its application.
(10 points)
Comments:
Question 4.
Question
:
(TCO
2) Transaction analysis results in the development of a journal entry. In
the start-up of a business, the owner contributes $750,000 of cash. (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)
Comments:
Question 5.
Question
:
(TCO
3) Adjusting Entries are required at the end of the period to ensure that
accrual accounting principles are applied. The building that houses the
business is depreciated at an annual rate of $14,000. Develop the
adjusting entry for year end. (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)
* Times are displayed in (GMT-07:00) Mountain Time (US &
Canada)
(TCO
5) E-commerce creates its own risks, and therefore special internal
controls. (1) Identify and explain one pitfall and one security measure
for an online business (10 points) and (2) provide examples of how your
selected security measure will strengthen internal control. (15 points)
Comments:
Question 2.
Question
:
(TCO
5) The bank account as a control device helps to protect cash. One of the
requirements is to conduct periodic bank statement reconciliations. Using
the following data, complete the bank statement reconciliation for J
& J Flooring, Inc. (Use the format shown on page 251 of your
textbook.) (25 points)
· The bank statement
indicated a service charge of $56.
· J & J made a deposit on
May 31, but this deposit did not appear on the bank statement, $1,451.
· A credit memo in the bank
statement indicated a bank collection of a note for $1,300 with interest
received of $16. This item was dated May 18.
· Also included in the bank
statement was a debit memo for a NSF check for $314 from Barney Smythe.
· Checks #1406 for $1,342,
#1610 for $1,609, and #1825 for $857 were written by J & J and sent
to the respective companies, but these checks do not appear on the bank
statement.
· The balance on the bank
statement as of May 31 was $13,019.
· The Cash account on Janus’
books showed an amount of $9,716.
Comments:
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(TCO 5) The bank account as a control device that helps to protect
cash. One of the requirements is to conduct periodic bank statement
reconciliations. Using the following data, complete the bank statement
reconciliation.
Use the information below to prepare the bank
reconciliation for EEE Electric for the month of September.
· The bank statement indicated bank service
charges of $63.
· Outstanding checks as of September 30 amounted
to $1,405.
· Deposits in transit as of September 30 amounted
to $2,769.
· The ending balance per the September bank
statement is $40,653.
· EEE’s bookkeeper mistakenly recorded a $1,610
cash disbursement as $1,160 for Office Supplies on check #2402.
· The bank mistakenly recorded a deposit of $2,800
as $280 on February 17.
· The bank made an EFT payment on behalf of the
company for Insurance for $3,200.
· Bank collected rent of $3,000 and a note, for
$16,450, including interest of $450.
· The ending cash balance per the books for
September before any adjustments was 28,800Question 7
Internal Controls are
required to safeguard assets and to ensure ethical business practices. (1)
Identify and explain the reason for any two of the five components of internal
control (10 points) and (2) provide examples of how your two selected
components of internal control will meet the goal of safeguarding assets and
promoting ethical business practices. (15 points)
