Williams: Financial and Managerial Accounting Chapter 3 Homework

Each of the following statements may (or may not) describe one of these technical terms. For each statement, indicate the term described, or answer “None” if the statement does not correctly describe any of the terms.

 


The span of time covered by an income statement.


The sequence of accounting procedures used to record, classify, and summarize accounting information.


The traditional accounting practice of resolving uncertainty by choosing the solution that leads to the lowest amount of income being recognized.


An increase in owners’ equity resulting from profitable operations.


The underlying accounting principle that determines when revenue should be recorded in the accounting records.


The type of entry used to decrease an asset or increase a liability or owners’ equity account.


The underlying accounting principle of offsetting revenue earned during an accounting period with the expenses incurred in generating that revenue.


The costs of the goods and services used up in the process of generating revenue.

A number of transactions of Claypool Construction are described as follows in terms of accounts debited and credited.

 
Debit Wages Expense; credit Wages Payable.
Debit Accounts Receivable; credit Construction Revenue.
Debit Dividends; credit Cash.
Debit Office Supplies; credit Accounts Payable.
Debit Repairs Expense; credit Cash.
Debit Cash; credit Accounts Receivable.
Debit Tools and Equipment; credit Cash and Notes Payable.
Debit Accounts Payable; credit Cash.

 

a. Indicate the effects of each transaction upon the elements of the income statement and the balance sheet. Select I for increase, D for decrease, and NE for no effect in the column headings below to show the effects of the above transactions. The answer for transaction 1 is provided as an example.

The following information came from a recent balance sheet of The Coca Cola, Co.



a. Determine the amount of total liabilities reported in Coca-Cola’s balance sheet at the beginning of the year.

b. Determine the amount of total owners’ equity reported in Coca-Cola’s balance sheet at the end of the year.

c. Retained earnings was reported in Coca-Cola’s year-end balance sheet at $60.4 billion. If retained earnings was $65.5 billion at the beginning of the year, determine net income for the year if a $6.3 billion dividend was declared during the year. (Enter your answers in billions of dollars rounded to 1 decimal place.)

Use the information in the ledger accounts.



Prepare a trial balance for Avenson Insurance Company dated November 30.