ACC Final Exam Study with complete Solution 2022

(a) The liabilities of Holland Company are $116,000 and its stockholders' equity is $229,500. What is the amount of Holland Company's total assets? Holland Company's total assets (b) The total assets of Holland Co ...

(a) The liabilities of Holland Company are $116,000 and its stockholders' equity is $229,500. What is the amount of Holland Company's total assets? Holland Company's total assets (b) The total assets of Holland Company are $194,000 and its stockholders' equity is $83,000. What is the amount of its total liabilities? Holland Company's total liabilities (c) The total assets of Holland Company are $833,000 and its liabilities are equal to one-half of its total assets. What is the amount of Holland Company's stockholders' equity? Holland Company's owner's equity - ANSWER (a)Total assets (Liability + Stockholders equity) = $116,000 + $229,500 = $345,500 (b)Total liabilities (Assets - Stockholders equity)= $194,000 -$83,000 = $111,000 (c) Stockholders' equity (Assets - (0.5 x Assets)) = $833,000 - 0.5($833,000) = $416,500 Indicate whether each of the following items is an asset, liability, or part of stockholders' equity. (a) Accounts receivable (b) Salaries and wages payable (c) Equipment (d) Supplies (e) Owner's investment (f) Notes payable - ANSWER (a) Assets (b) Liability (c) Assets (d) Assets (e) Stockholders' Equity (f) Liability Presented below are three business transactions. For each column, indicate whether the transactions increased, decreased, or had no effect on assets, liabilities, and stockholders' equity. (a) Purchased supplies on account. (b) Received cash for performing a service. (c) Paid expenses in cash. - ANSWER (a) Assets: Increased , Liabilities: Increased , Stockholder: No effect (b) Assets: Increased , Liabilities: No effect , Stockholder: Increased (c) Assets: Decreased , Liabilities: No effect , Stockholder: Decreased Presented below are three business transactions. Determine the effect on assets, liabilities, and stockholders' equity of the following three transactions. For each column, indicate whether the transactions increased, decreased , or had no effect. (a) Stockholders invested cash in the business for common stock. (b) Paid a cash dividend. (c) Received cash from a customer who had previously been billed for services performed. - ANSWER (a) Assets: Increased , Liabilities: No effect , Stockholder: Increased (b) Assets: Decreased , Liabilities: No effect , Stockholder: Decreased (c) Assets: No effect , Liabilities: No effect , Stockholder: No effect Classify each of the following items as dividends, revenue, or expense. (a) Advertising expense (b) Service revenue (c) Insurance expense (d) Salaries and wages expense (e) Dividends (f) Rent revenue (g) Utilities expense - ANSWER (a) Expense (b) Revenue (c) Expense (d) Expense (e) Dividends (f) Revenue (g) Expense (a) The following are users of financial statements. Identify the users as being either external users or internal users. 1. Customers 2. Internal Revenue Service 3. Labor unions 4. Marketing manager 5. Production supervisor 6. Securities and ExchangeCommission 7. Store manager 8. Suppliers 9. Vice president of finance (b) The following questions could be asked by an internal user or an external user. Identify each of the questions as being more likely asked by an internal user or an external user. 1. Can we afford to give our employees a pay raise? 2. Did the company earn a satisfactory income? 3. Do we need to borrow in the near future? 4. How does the company's profitability compare to other companies? 5. What does it cost us to manufacture each unit produced? 6. Which product should we emphasize? 7. Will the company be able to pay its short-term debts? - ANSWER (a) 1. External users 2. External users 3. External users 4. Internal users 5. Internal users 6. External users 7. Internal users 8. External users 9. Internal users (b) 1. Internal users 2. External users 3. Internal users 4. External users 5. Internal users 6. Internal users 7. External users Match the following terms and definitions. (1) Amounts due from customers (2) Amounts owed to suppliers for goods and services purchased (3) Amounts owed to bank (4) Party to whom money is owed - ANSWER (1) Accounts Receivable (2) Accounts Payable (3) Note Payable (4) Creditor Indicate which of these items is an asset, liability or stockholders' equity account. (1) Supplies (2) Dividends (3) Buildings (4) Notes Payable (5) Salaries and Wages Payable - ANSWER (1) Assets (2) Stockholders' Equity (3) Assets (4) Liability (5) Liability Identify the impact on the accounting equation of each of the following transactions. 1. Purchase office supplies on account. 2. Paid secretary weekly salary. 3. Purchased office furniture for cash. 4. Received monthly utility bill to be paid at later time. - ANSWER 1. Increase assets and increase liabilities 2. Decrease assets and decrease stockholders' equity