1 tame Wry MAUS ar aa Defining Accounting Terms | 22 Pts. — ‘Analyzing Accounting Practices | 15 Ps. i a Ta ng ak eunig Egan | 40s Determining How Transactions Change an Accounting Equation | 40Pis.| | TESTA Part One—Defining Accounting Terms Directions: Select the one term in Column I that best fits each definition in Column IL Print the letter identifying your choice in the Answers column. Columa A. account BL account balance & account ttle W. accounting BY accounting equation accounting récords g. accounting system Hh asset J. osiness ties X. capital . equities Jf ethics Muexpense Js financial statements Pi liabilty 9. owner's equity f. proprietorship HX revenue A meciocom A, service business bs earscion ob ihc Chapter I—Test A Column I 7- The use of ethics in making business decisions. (% Planning, recording, analyzing, and interpreting financial information. J: An equation showing the relationship among assets, liabilities, ‘and owner's equity. PF Nbusiness activity that changes asels, liabilities, or ‘owner's equity. A planned process for providing financial information that, will be uséful to management. A. The amountiin an account. ‘The account used to summarize the owner's equity in the business. ‘The amount remaining after the value of all liabilities is, subtracted from the value ofall assets, A.record summarizing all the information pertaining toa single item in the accounting equation. Organized summaries of a business's financial activities. Anything of value that is owned. sale for which cash will be received at a later date. Assets taken out of a business for the owner's pérsonal use, An increase in owner's equity resulting from the operation ofa business. Abusiness owned by one person. Financial xights to the assets of a business. A business that performs an activity for a fee. . The principles of right and wrong that guide an individual in making decisions Financial reports that summarize the financial conditions and operations of a business. An amount owed by a business. (. The name given to an account. RR BR BERR BR RE ER BOR OY . A decrease in owner's equity resulting from the operation ofa business. © South-Western Cengage Learning Answers 4 2 O- se 4 ou 5 G 6 B 2) a wT we 1. NW 20._O aC 2 MName Part Three—Determining How Transactions Change an Accounting Equation Claudia Arellano is starting Arellano Consulting Services, a small service business, Arellano Consulting Services uses the accounts shown in the following accounting equation. Use the form below to record the following transactions, ‘Use a plus sign (+) to indicate an increase and a minus sign (-) to indicate a decrease. Calculate new balances for all accounts after each transaction. Transactions » ¥, Received cash from owner as an investment, $15,000.00. Paid cash for insurance, $5,000.00. 9 Bought supplies on account from Lee's Supplies, $1,600.00. 4¢ Paid cash on account to Lee's Supplies, 1,000.00. 8¢ Received cash front sales, $2,500.00, — 6. Sold services on account to Jones Computers, $3,500.00. Assets __| = Uabitties + Owner's Equity ‘Transaction: Accts. Rec. Prepaid Acts. Pay. Claudia No. Cash + Jones + Supplies + Insurancé|) = Lee's + ‘Arellano, Computers ‘Supplies Capital Beg. Bal. $0 30 $0 $0 $0 1 + 15,000 New! Bal. SG ; coo) New ‘Bal. + 6D Ir \\ @o New ~ 1,000 ~ 1000 Neb 2600 : *2,600 Neva 43,500 | _. Bee0 Newbal (V6500 3.500 Loo Cov | GOO A'OG| Y Ties va ~ L'eeg 21'G00 4 Chapter 1—Test A © South-Western Cengage Learning