会计英语——程子建问答题整理

一、中译英accounting equationstatement of cash flowreal estatecredit balanceworking capitaloriginal vouchersFIFOcurrency unitcash basiscapital leaseretained earningscommon stockincome taxpar valueearnings par shareaccounting principleT-accountaccounting information system current depositfixed assetsgross marginlower-of-cost-or-market-rule long-term investment intangible assets operating leaseretained earnings preferred stockpar valuecash equivalentsquick ratioauditinghistoricalcost principlegeneral ledgercurrent liabilities internal control system interest rate merchandise inventory capital expenditure intangible assetssales taxretained earningspar valuesubsequent eventsquick ratiosecurity market二、英译中1、会计是计量企业经济活动，处理、加工信息，将结果与决策者交流的信息系统。

2、基本的财务报表有：资产负债表；损益表；现金流量表。

3、会计假设有：会计主体假设；持续经营假设；期间假设；币值稳定假设。

4、资产是企业拥有的具有货币价值的财产。

会计学英语试题及答案一、单项选择题（每题2分，共10题）1. Which of the following is not a financial statement?A. Balance SheetB. Income StatementC. Cash Flow StatementD. Tax Return2. The process of recording all financial transactions in a company is known as:A. BudgetingB. ForecastingC. BookkeepingD. Auditing3. What does the term "Depreciation" refer to?A. The increase in value of an asset over timeB. The decrease in value of an asset over timeC. The sale of an assetD. The purchase of an asset4. Which of the following is not a type of receivable?A. Accounts ReceivableB. Notes ReceivableC. InventoryD. Trade Receivables5. What is the purpose of an audit?A. To ensure compliance with tax lawsB. To verify the accuracy of financial recordsC. To prepare financial statementsD. To manage the company's budget6. The term "Equity" in accounting refers to:A. The total assets of a companyB. The total liabilities of a companyC. The owner's investment in the companyD. The company's net income7. Which of the following is not a component of a balance sheet?A. AssetsB. LiabilitiesC. EquityD. Revenue8. The accounting equation is represented as:A. Assets = Liabilities + EquityB. Assets = Liabilities - EquityC. Assets - Liabilities = EquityD. Assets + Equity = Liabilities9. What is the term used to describe the conversion of cash into other assets?A. InvestingB. FinancingC. OperatingD. Spending10. Which of the following is a non-current asset?A. CashB. InventoryC. LandD. Office Supplies二、多项选择题（每题3分，共5题）1. Which of the following are considered as current assets?A. CashB. Accounts ReceivableC. InventoryD. Land2. The following are examples of liabilities except:A. Accounts PayableB. Long-term DebtC. Common StockD. Retained Earnings3. The following are types of expenses in an income statement except:A. Cost of Goods SoldB. Salaries and WagesC. DividendsD. Depreciation4. Which of the following are considered as equity transactions?A. Issuance of SharesB. Declaration of DividendsC. EarningsD. Payment of Dividends5. The following are true statements about accountingprinciples except:A. The going concern assumptionB. The matching principleC. The cash basis of accountingD. The accrual basis of accounting三、判断题（每题1分，共5题）1. True or False: The accounting cycle includes the processof closing the books at the end of an accounting period.2. True or False: All prepaid expenses are considered current assets.3. True or False: Revenue recognition is based on the cash received.4. True or False: The statement of cash flows is preparedusing the cash basis of accounting.5. True or False: The accounting equation must always balance.四、简答题（每题5分，共2题）1. Explain the difference between revenue and profit.2. Describe the role of the statement of cash flows infinancial reporting.五、计算题（每题10分，共1题）A company has the following transactions during the month:- Cash sales: $10,000- Accounts receivable: $5,000- Accounts payable: $3,000- Inventory purchased on credit: $2,000- Cash paid for expenses: $1,500Calculate the company's cash flow from operating activities for the month.答案：一、单项选择题1. D2. C3. B4. C5. B6. C7. D8. A9. A10. C二、多项选择题1. A, B, C2. C, D3. C4. A, D5. C三、判断题1. True2. True3. False4. False5. True四、简答题1. Revenue is the income generated from the normal business activities of a company over a specific period, before any expenses are deducted. Profit, on the other hand, is the amount of money remaining after all expenses have been deducted from the revenue. It represents the net income or net loss of a company.2. The statement of cash flows is a financial statement that provides information about the cash receipts。

会计英语复习资料答案会计英语复习资料答案一、单词1.accounting 会计学2.accounting elements 会计要素3.accounting equation 会计等式4.assets 资产5.liabilities 负债6.owner`s equity 所有者权益7.revenue 收入8.expenses 费用9.profits 利润10.accounting period 会计期间11.transaction 经济业务/会计事项12.double-entry system 复式记账法13.debit 借方14.credit 贷方15.ledger 分类账16.chart of accounts 会计科目表17.journal 日记账18.current assets 流动资产19.cash 现金20.cash equivalents 现金等价物21.check 支票22.bank deposits 银行存款23.cash in bank 银行存款24.money orders 汇票25.cash on band 库存现金26.accounts receivable 应收账款27.allowance for bad debts 坏账准备 realizable value 可变现净值29.inventory 存货30.finished goods 产成品31.semi-finished goods 半成品32.goods in process 在产品33.historical cost 历史成本34.specific identification 个别计价法35.first-in, first-out 先进先出法st-in, first-out 后进先出法37.weighted average 加权平均法38.raw materials 原材料39.short-term investment 短期投资40.marketable securities 有价证券41.shareholder 股东42.bonds 债券43.debentures 债券44.long-term assets 长期资产45.fixed assets 固定资产46.intangible assets 无形资产47.deferred assets 递延资产eful life 使用寿命49.depreciation 折旧50.depreciable amount 应计折旧额51.depreciation method 折旧方法52.estimated net residual value 预计净残值53.straight-line method 直线法54.units of production method 工作量法55.double declining balance method 双倍余额递减法56.sum-of-the-years-digits method 年数总和法57.amortization 摊销58.impairment 减值59.current liabilities 流动负债60.accounts payable 应付账款61.notes payable 应付票据62.unearned revenue 预收账款63.income taxes payable 应交所得税64.contingent liabilities 或有负债65.long-term liabilities 长期负债66.bonds payable 应付债券67.ownership 所有权68.sole proprietorship 独资企业69.partnership 合伙企业70.corporation 公司mon shareholders 普通股股东72.preferred shareholders 优先股股东mon stock 普通股74.preferred stock 优先股75.dividends 股利76.retained earnings 留存收益77.paid-in capital 实收资本78.capital stock 股本79.addtional paid-in capital 附加投入资本80.capital surplus 资本公积81.undistributed profit 未分配利润82.par value 面值83.fair value 公允价值84.reserve fund 盈余公积85.legal reserve 法定盈余86.stock split 股利分割87.cash dividends 现金股利88.stock dividends 股票股利89.sales revenue 销售收入90.service revenue 劳务收入91.product costs 产品成本92.direct material costs 直接材料成本93.direct labor costs 直接人工成本94.indirect costs 间接成本95.manufacturing overhead 制造费用96.period expenses 期间费用97.operating expense 营业费用98.administrative expense 管理费用99.finance expense 财务费用100.balance sheet 资产负债表101.income statement 利润表/损益表102.cash flow statement 现金流量表二、填空1. The accounting elements include assets, liabilities, owner`s equity, revenue, expenses, and profits.2. Liabilities are debts of a business.3. Borrowing cash from a bank does not belong to assets; it simply belongs to liability.4. Profit is the excess of revenue over expenses for the accounting period.5. The accounting equation is :assets = liabilities + owner`s equity.6.“Dr.” stands for debits ,while “Cr.” is the abbreviation for credit.7. Liability, owner`s equity, revenue and profit decreases are recorded as debits.8. Short-term investments refer to various of marketable securities.9. Marketable securities include stock and debentures to be realized within one year from the balance sheet date and shall be accounted for at cost.10. Depreciation refers to the systematic allocation of the depreciable amount of a fixed asset over its useful life.11. The four common depreciation methods are the straight-line method, the units of production method.12. The straight –line method shall be employed when it is assumed that an asset`s economic revenue is the same each year, and the repair and maintenance cost is also the same for each period.13. When depreciation is mainly due to wear and tear, the units of production method are usually used.14. The two types of intangible assets are finite and indenfinite intangibles.15. Please name five most commonly seen intangibles , i.e., patents, trademarks, copyrights, franchises and licenses, internet domain names and construction permit.16. Intangible assets do not include internally generated goodwill, brands and publishing titles.17. Intangible assets should be measured initially at cost.18. For intangible assets with finite useful lives enterprises shall consider their amortization while intangible assets with indefinite useful lives shall not be amortized.19. The account of unearned revenue should be decreased when the service paid for in advance has been provided.20. The account of accounts payable should be recorded when the business purchased supplies on credit.21. The account of notes payable used to show what the business owes the bank.22. A corporation`s balance sheet contains assets, liabilities, and shareholders` equity.23. Preferred stock and common stock are the two common capital stocks issued by a corporation.24. Cash dividends and stock dividend are the usual forms of distribution to share holders.25. A stock dividend is a proportional distribution to shareholders of additional shares of the corporation`s common or preferred stocks.26. Retained Earnings represents the corporation`s accumulated net income, less accumulated dividends and other amounts transferred to paid-in capital accounts.三、单选1. Matching each of the following statements with its poper term.(1) accounts receivable ( B )(2) dishonored notes receivable ( C )(3) allowance method ( A )(4) direct write-off method ( D )A. The method of accounting for un-collectible accounts that provides an expense for un-collectible receivables in advance of their write-off.B. A receivable created by selling merchandise or service on credit.C. A note that maker fails to pay on the due date.D. The method of accounting for un-collectible accounts that recognizes the expense only when accounts are judged to be worthless.2. At the end of the fiscal year, accounts receivable has a balance of $100000 and allowance for doubtful accounts has a balance of $7000, The expected net realizable value of the accounts receivable is ( B )A. $7000B. $93000C. $100000D. $1070003. If merchandise inventory is being valued at cost and the price level is steadily rising, the method of costing that will yield the higher net income is ( B )A.LIFOB.FIFOC.AverageD.Periodic4. Given the following information, which of the following accounting transactions is true?( B )Gross payroll $20000Federal income tax withheld $4000Social security tax withheld $1600A. $1600 is recorded as salary expense.B. $14400 is recorded as salary payableC. The $1600 deducted for employee social security tax belongs to the companyD. Payroll is an example of an estimated liability5.If a corporation has outstanding 1000 shares of $9 cumulative preferred stock of $100 par and dividends have been passed for the preceding three years, what is the amount of preferred dividends that must be declared in the current year before a dividend can be declared on common stock?( C ) A.$9000 B. $27000 C. $36000 D. $450006. All of the following are reasons for purchasing treasury stock except to ( B )A. make a market for the stockB. increase the number of shareholdersC. increase the earnings per share and return on equityD. give employee as compensation7. Paid-in capital for a corporation may arise from which of the following sources?( D )A. Issuing cumulative preferred stockB. Receiving donations of real estateC. Selling the corporation`s treasury stockD. All of the above8. Under the equity method, the investment account is decreased by all of the following except the investor`s proportionate share of ( B )A. dividends paid by the investeeB. declines in the fair value of the investmentC. the losses of the investeeD. all of the options9. Cash dividends are paid on the basis of the number of shares ( C )A. authorizedB. issuedC. OutstandingD. outstanding less the number of treasury shares10. The stockholders` equity section of the balance sheet may include ( D )A. common stockB. preferred stockC. donated capitalD. all of the above11. Declaration and issuance of a dividend in stock ( D )A. increases the current ratioB. decreases the amount of working capitalC. decreases total stockholders` equityD. has no effect on total assets, liabilities, or stockholders` equity12. If a corporation reacquires its own stock, the stock is listed on the balance sheet in the ( C )A. current assets sectionB. long term liability sectionC. stockholders` equity sectionD. investments section13. A corporation has issued 25000 shares of $100 par common stock and holds 3000 of these shares as treasury stock. If the corporation declares a $2 per share cash dividend, what amount will be recorded as cash dividend?( C )A. $22000B. $25000C. $44000D. $5000014. A company declared a cash dividend on its common stock on December 15, 2004, payable on January 12, 2005. How would this dividend affect shareholders` equity on the following dates? ( B ) December 15, January 122004 2005A. Decrease. Decrease.B. No effect. No effect.C. No effect. No effect.D. Decrease. Decrease.15. An example of a cash flow from an operating activity is ( D )A. the receipt of cash from issuing stockB. the receipt of cash from issuing bondsC. the payment of cash for dividendsD. the receipt of cash from customers on account16. An example of a cash flow from an investing activity is ( A )A. the receipt of cash from the sale of equipmentB. the receipt of cash from issuing bondsC. the payment of cash for dividendsD. the payment of cash to acquire treasury stock17. An example of a cash flow from a financing activity is ( C )A. the receipt of cash from customers on accountB. the receipt of cash from the sale of equipmentC. the payment of cash for dividendsD. the payment of cash to acquire marketable securities18. A receivable created by selling merchandise or services on credit. ( A )A. accounts receivableB. dishonored notes payableC. allowance methodD. direct write-off method19. At the end of the fiscal year, accounts receivable has a balance of $100000 and allowance for doubtful accounts has a balance of $7000. The expected net realizable value of the accounts receivable is ( B )A. $7000B. $93000C. $100000D. $10700020.( B ) are valuable resources owned by the entity.A. LiabilityB. AssetsC. EquityD. None of them21. Which is intangible asset ( C )A. internally generated goodwillB. internally generated publishing titlesC. franchises and licenseD. internally generated brands22.( A ) shall be employed when it is assumed that an asset`s economic revenue is the same each year, and the repair and maintenance cost is also the same for each period.A. straight-line methodB. units of production methodC. double declining balance methodD. sum-of-the-years-digits(SYD) method四、判断1. Fixed assets are intangible assets. ( F )2. Internally generated goodwill can be viewed as intangible assets. ( F )3. Land doesn`t need depreciation and is considered to have an infinite life. （ T ）4. Fixed assets are usually subjected to depreciation. ( T )5. Bonds and stocks are classified as intangible assets.( F )6. Once the expected useful life and estimated net residual value are determined, they shall notbe changed under any circumstances.( F )7. When a corporation issues one type of capital stocks, common stocks are always issued. ( T )8. Par value is strictly a legal matter, and it establishes the legal capital of a corporation. ( T )9. The balance of the additional paid-in capital account represents a gain on the sale of stocks and increases net income. ( F )10. A corporation must, by law, pay a dividend once a year. ( T )11. Dividends are an expense of a corporation and should be charged to the periodic income. ( T )12. Revenue increase owner`s equity. ( T )13. Revenue is recognized when we receive cash from the buyers. ( F )14. Advertising expense is usually collected as period expense. ( T )15. Interest revenue should be measured based on the length of time. ( T )16. If revenue exceed expenses for the same accounting period, the entity is deemed to suffera loss. ( F )17. Asset = liabilities + Expense. ( F )18. Liabilities are debts of a business. ( T )19. Borrowing cash from a bank belongs to revenue. ( F )20. Increase in asset is recorded in credit side. ( F )21. When depreciation is mainly due to wear and tear, straight-line method shall be employed. ( F )22. Bonds payable belong to current liabilities.( F )23. All fixed assets are depreciable over their limited useful life.( F )24. Fixed assets are intangible assets. ( F )25. Internally generated goodwill can be viewed as intangible assets. ( F )26. Land doesn`t need depreciation and is considered to have an infinite life. ( T )五、翻译1. Accounting contains elements both of science and art. The important thing is that it is not merely a collection of arithmetical techniques but a set of complex processes depending on and prepared for people.会计既是科学，也是艺术。

会计专业英语试题及答案一、选择题（每题2分，共20分）1. Which of the following is not an accounting principle?A. Accrual BasisB. Going ConcernC. ConsistencyD. Cash BasisAnswer: D2. The process of summarizing, analyzing, and reporting financial data is known as:A. BudgetingB. AccountingC. AuditingD. TaxationAnswer: B3. What is the term used to describe the systematic and periodic recording of financial transactions?A. BookkeepingB. PayrollC. TaxationD. AuditingAnswer: A4. Which of the following is not a component of the balance sheet?A. AssetsB. LiabilitiesC. EquityD. RevenueAnswer: D5. The matching principle requires that:A. Expenses are recognized when incurredB. Expenses are recognized when paidC. Expenses are recognized in the same period as the revenue they generateD. Expenses are recognized when the cash is received Answer: C6. The accounting equation is:A. Assets = Liabilities + EquityB. Assets - Liabilities = EquityC. Assets + Equity = LiabilitiesD. Assets = Equity - LiabilitiesAnswer: A7. The term "double-entry bookkeeping" refers to the practice of:A. Recording transactions twiceB. Recording transactions in two accountsC. Recording debits and credits for every transactionD. Recording transactions in two different booksAnswer: C8. Which of the following is not a type of intangible asset?A. PatentsB. TrademarksC. GoodwillD. InventoryAnswer: D9. The purpose of an income statement is to show:A. The financial position of a company at a point in timeB. The changes in equity over a period of timeC. The financial performance of a company over a period of timeD. The cash flows of a company over a period of time Answer: C10. The statement of cash flows is used to report:A. How cash is generated and used during a periodB. The net income of a company for a periodC. The changes in equity for a periodD. The changes in assets and liabilities for a period Answer: A二、填空题（每题2分，共20分）1. The accounting cycle includes the following steps:journalizing, posting, __________, adjusting entries, and closing entries.Answer: trial balance2. The __________ principle requires that all business transactions should be recorded at their fair value in the accounting records.Answer: Fair Value3. The __________ is a summary of all the journal entries fora period, listed in date order.Answer: General Journal4. __________ are expenses that have been incurred but not yet paid.Answer: Accrued Expenses5. The __________ is a report that shows the beginning cash balance, cash receipts, cash payments, and the ending cash balance for a period.Answer: Cash Flow Statement6. The __________ ratio is calculated by dividing current assets by current liabilities.Answer: Current Ratio7. __________ are assets that are expected to be converted into cash or used up within one year or one operating cycle. Answer: Current Assets8. __________ is the process of determining the cost of goodssold and the value of ending inventory.Answer: Costing9. __________ is the process of estimating the useful life of an asset and allocating its cost over that period.Answer: Depreciation10. __________ is the process of adjusting the accounts to reflect the proper revenue and expenses for the period. Answer: Accrual Accounting三、简答题（每题10分，共20分）1. Explain the difference between revenue and profit. Answer: Revenue is the income generated from the normal business activities of an entity during a specific period, before deducting expenses. Profit, on the other hand, is the excess of revenues and gains over expenses and losses for a period. It represents the net income or net earnings of a business.2. What are the main components of a balance sheet?Answer: The main components of a balance sheet are assets, liabilities, and equity. Assets represent what a company owns or controls with future economic benefit. Liabilities are obligations or debts that a company owes to others. Equity is the residual interest in the assets of the entity after deducting all its liabilities, representing the ownership interest of the shareholders.四、计算题（每题15分，共30分）1. Calculate the net income for the year if the revenue is$500,000, the cost of goods sold is $300,000, operating expenses are $80,000, and other expenses are $20,000. Answer: Net Income = Revenue - Cost of Goods Sold - Operating。

Exercise answer for Lesson 11.1 Select the best answer for each of the following unrelated items1.d2. d3. b4. d5. c6. c7.d8.a9.b 10.b11c 12b 13c 14d 15 a1.2 SHORT-ANSWER ESSAY QUESTIONS1.Accounting cycle is an important concept for accounting. Briefly explain the steps for accounting cycle.Solution: (1)Analyze transactions; (2) Journalize transactions; (3) Post to ledger;(4) Prepare unadjusted trial balance ;(5) Journalize & post adjustments; (6) Prepare adjusted trial balance; (7) Prepare financial statements; (8) Journalize and post closing entries; (9) Prepare post-closing trial balance2 Your roommate, a marketing major, thinks that debit means decrease and credit means increase. And, that every account can be debited and credited and as result, every account can have both a debit and a credit balance. Explain to your roommate (1) the meaning of debit and credit; (2) which accounts can only be debited, which can only be credited, and which can be both debited and credited; and (3) which accounts normally have debit balances and which credit balances.Solution: The terms debit and credit mean the left and right side, respectively, of every account. Some accounts such as Dividends and Expenses are only debited; other accounts such as Share Capital-Ordinary and Revenues are only credited; and finally, some accounts such as Cash, Accounts Receivable, and Accounts Payable can be debited and credited. Accounts with debit balances include Assets, Dividends, and Expenses. Accounts with credit balances include Share Capital-Ordinary and Revenues.3 A fellow classmate is confused about how debits and credits relate to the basic accounting equation. State the basic accounting equation, convert it into the expanded accounting equation, and then explain how it ties into the rules for debits and credits.Solution:The basic accounting equation is:Assets = Liabilities + EquityThe expanded equation divides Equity into its various parts, reflecting the shareholders' investment, dividends, revenues, and expenses:Assets = Liabilities + Share Capital-Ordinary + Retained Earnings – Dividends + Revenues – ExpensesThis expanded equation can then be re-arranged to explain why certain accounts have debit (left-hand) balances, while other accounts have credit (right-hand) balances, as follows:Assets + Dividends + Expenses = Liabilities + Share Capital-Ordinary + Retained Earnings + RevenuesThe accounts on the left-hand side of the equation have left-hand, or debit balances, while the accounts on theright-hand side of the equation have right-hand, or credit balances. Accounts with debit balances are increased with debits and decreased with credits, while accounts with credit balances are increased with credits and decreased with debits.4 John Dough, a fellow employee, wants to understand the basic steps in the recording process. Identify and briefly explain the steps in the order in which they occur.SolutionThe basic steps in the recording process are:1. Analyze each transaction. In this step, business documents are examined to determine the effects of the transactionon the accounts.2. Enter each transaction in a journal. This step is called journalizing and it results in making a chronological record ofthe transactions.3. Transfer journal information to ledger accounts. This step is called posting. Posting makes it possible to accumulatethe effects of journalized transactions on individual accounts.5 The process of transferring the information in the journal to the general ledger is called posting. Explain the posting process, including the importance of the journal page number and the account numbers.SolutionThe posting process begins with locating the account(s) being debited in the general ledger. Then entering the date of the entry, the journal page number where the entry originated and debit portion of the entry in the date, reference and debit columns, respectively. Once this done, the account number(s) of the account(s) being debited is (are) entered in the reference column in the journal. Next, the credit portion of the journal entry is posted to the appropriate accounts in the ledger following the same steps as noted for the debit portion.The importance of the journal page number, in the reference column of each account in the general ledger accounts, is to indicate where to find the original entry. And, the general ledger account numbers, in the reference column of the journal, indicate that the entry has been posted.1.3 The effects of transactions on the accounting equationLinda Champion began a professional accounting practice on May 1 and plans to prepare financial statements at the end of each month. During May, Champion completed these transactions:a. Invested €50,000 cash and equipment that had a€10,000 fair market (cash equivalent) value.b. Paid €1,600 rent for office space for the month.c. Purchased €12,000 of additional equipment on credit.d. Completed work for a client and immediately collected €2,000 cash.e. Completed work for a client a nd sent a bill for €7,000 to be paid within 30 days.f. Purchased €8,000 of additional equipment for cash.g. Paid an assistant €2,400 as wages for the month.h. Collected €5,000 of the amount owed by the client described in transaction (e).i. Paid for the equipment purchased in transaction (c).j. Withdrew €500 for personal use.Enquired:Using the information presented in (a) through (j) above, Linda Champion, the owner, first creates a table like the one shown below. She then uses the results to calculate net income earned during the month of May, her first month of operations.Solutions:Notice how Assets of €64,500 = Liabilities + Owner’s equity of €64,500. From this schedule you cancalculate the firm’s net income by summarizing the revenues and expenses as follows: Net income =Revenues – Expenses= (€2,000 + €7,000) –(€1,600 + €2,400)= €5,0001.4 Preparing a statement of comprehensive income and a statement of financial positionDuring June through August of 20X5, Lin Yan earned money doing computer consulting work. She went around the city and obtained several contracts for small jobs. Lin then withdrew €3,000 from her personal savings account and deposited it in a separate account for the business. At the end of the summer, Lin tried to figure out how well her business had done.Lin’s business records showed the following transactions:a. Deposited €12,500 (from customers’ payments).b. Issued cheques:−car and equipment rental, €2,000;−gas, €900;−supplies purchased and used, €100;− hir ed help, €4,800;−payroll taxes, €600;−insurance, €180;−telephone, €120.c. Transferred €2,000 cash from the business bank account to personal savings account.d. Owed €500 by customers.e. Owed €150 for gas.Required1. Show the effect of each transaction, including the initial cash deposit, on the accounting equation.2. Prepare a statement of comprehensive income for Lin’s summer business.3. Prepare a statement of financial position for Lin at the end of the summer.Solution:1. To show the effect of each transaction on the accounting equation, construct a worksheet with four columns using the following headings: item, assets, liabilities, and owner’s equity. Recall that revenues increase owner’s equity and expenses decrease owner’s equity.2. Re venues originated from two sources: customers’ payments (€12,500) and from amounts yet to be paid by customers (€500). Total expenses included car and equipment rental (€2,000), car expenses (€900 paid + €150 unpaid), supplies (€100), helpers (€4,800), payroll taxes (€600), insurance (€180), and telephone (€120). Net income is determined from the difference of total revenues and total expenses. Based on this information, the following income statement is prepared.Solutions:3. From the effect of the transactions prepared in part 1, you can generate the following statement of financialposition for the end of the summer.The cash balance can be determined as follows:The cash balance excludes two amounts: the €500 still owed to Lin by customers and €150 she owes for car gas invoices not yet paid. If she receives the money owed her and she pays her debt, then she will have an additional €350 (€500 –€150), making a total cash balance of €5,150 (€4,800 + €350) for the summer. Note that the €2,000 personal withdrawal was not included as an expense on the statement of comprehensive income. The withdrawal is considered a distribution of income (owner’s profits) rather than an expense. The owner’s equity of €5,150 on the balance sheet includes the initial investment plus net income less the withdrawal (€3,000 + €4,150 –€2,000).1.5Increases, decreases, and normal balances of accountsEnquired: Complete the following table by1. Identifying the type of account listed on each line.2. Entering debit or credit in the blank spaces to identify the kind of entry that would increase or decrease the account balance.3. Identifying the normal balance of the account.1.6 Analyzing transactions using T-accountsOpen the following T-accounts: Cash; Accounts Receivable; Office Supplies; Office Equipment; Accounts Payable; Steve Moore, Capital; Steve Moore, Withdrawals; Fees Earned; and Rent Expense. Next, record these transactions of the Moore Company by recording the debit and credit entries directly in the T-accounts. Use the letters beside each transaction to identify the entries.a. Steve Moore invested €12,750 cash in the business.b. Purchased €375 of office supplies for cash.c. Purchased €7,050 of office equipment on credit.d. Received €1,500 cash as fees for services provided to a customer.e. Paid for the office equipment purchased in transaction (c).f. Billed a customer €2,700 as fees for services.g. Paid the monthly rent with €525 cash.h. Collected €1,125 of the account receivable created in transaction (f).i. Steve Moore withdrew €1,000 cash from the business.Enquired:1. Record these transactions of the Moore Company in journal.2. Open the following T-accounts: Cash; Accounts Receivable; Office Supplies; Office Equipment; Accounts Payable; Steve Moore, Capital; Steve Moore, Withdrawals; Fees Earned; and Rent Expense. Next, post the entries in theT-accounts. Use the letters beside each transaction to identify the entries.Solution:a. Steve Moore invested €12,750 cash in the business:b. Purchased €375 of office supplies for cash:c. Purchased €7,050 of office equipment on credit:d. Received €1,500 cash as fees for services provided to a customer:e. Paid for the office equipment purchased in transaction (c):f. Billed a customer €2,700 as fees for services:g. Paid the monthly rent with €525 cash:h. Collected €1,125 of the account receivable created in transaction (f):i. Steve Moore withdrew €1,000 cash from the bu siness:1.7 Correct the errorBetty Wright, CPA, was asked by the controller of Gore Company to review the accounting records before financial statements are prepared. Betty reviewed the records and found three errors.1.Cash paid on accounts payable for $930 was recorded as a debit to Accounts Payable $390 and a credit to Cash $390.2.The purchase of supplies on account for $500 was debited to Equipment $500 and credited to Accounts Payable $500.3.The company paid dividends $1,200. The bookkeeper debited Accounts Receivable for $120 and credited Cash $120. Enquired:Prepare an analysis of each error showing the(a) incorrect entry.(b) correct entry.(c) correcting entry.Solution:1. (a) Incorrect EntryAccounts Payable (390)Cash (390)(b) Correct EntryAccounts Payable (930)Cash (930)(c) Correcting EntryAccounts Payable (540)Cash (540)2. (a) Incorrect EntryEquipment (500)Accounts Payable (500)(b) Correct EntrySupplies (500)Accounts Payable (500)(c) Correcting EntrySupplies (500)Equipment (500)3. (a) Incorrect EntryAccounts Receivable (120)Cash (120)(b) Correct EntryDividends ......................................................................................... 1,200Cash ....................................................................................... 1,200(c) Correcting EntryDividends ......................................................................................... 1,200Accounts Receivable (120)Cash ....................................................................................... 1,0801.8 Ben Cartwright Pest Control has the following balances in selected accounts on December 31, 2011.Accounts Receivable € 0Accumulated Depreciation – Equipment 0Spraying Equipment 6,650Interest Payable 0Notes Payable 20,000Prepaid Insurance 2,400Salaries Payable 0Supplies 2,940Unearned Spraying Revenues 36,000All of the accounts have normal balances. The information below has been gathered at December 31, 2011.1. Depreciation on the equipment for 2011 is €1,250.2. Ben Cartwright Pest Control borrowed €20,000 by signing a 10%, one-year note on July 1, 2011.3. Ben Cartwright Pest Control paid €2,400 for 12 months of insurance coverage on October 1, 2011.4. Ben Cartwright Pest Control pays its employees total salaries of €10,000 every Monday for the preceding 5-day week (Monday-Friday). On Monday, December 27, 2011, employees were paid for the week ending December 24, 2011. All employees worked the five days ending December 31, 2011.5. Ben Cartwright Pest Control performed disinfecting services for a client in December 2011. The client will be billed €3,000.6. On December 1, 2011, Ben Cartwright Pest Control collected €36,000 for disinfecting processes to be performed from December 1, 2011, through May 31, 2011.7. A count of supplies on December 31, 2011, indicates that supplies of €950 are on hand.Enquired:Prepare in journal form with explanations, the adjusting entries for the seven items listed for Ben Cartwright Pest Control.Solutions:(1) Depreciation Expense - Equipment ............................................................... 1,250Accumulated Depreciation - Equipment................................................. 1,250 (To record depreciation for the period)(2) Interest Expense ............................................................................................ 1,000Interest Payable....................................................................................... 1,000 (To record accrued interest on note payable)[€20,000 * 10% * (6/12) = €1,000](3) Insurance Expense (600)Prepaid Insurance (600)(To recognize period insurance expense)[(€2,400 / 12) * 3 = €600](4) Wages Expense .............................................................................................. 10,000Wages Payable ........................................................................................ 10,000 (To record wages for the week)(5) Accounts Receivable ..................................................................................... 3,000Spraying Revenues ................................................................................. 3,000 (To record revenue earned but not yet received)(6) Unearned Spraying Revenues ........................................................................ 6,000Spraying Revenues ................................................................................. 6,000 (To record revenue earned with prior payment)(7) Supplies Expense ........................................................................................... 1,990Supplies .................................................................................................. 1,990 (To record supplies expense)[€2,940 - €950 = €1,990]1.9 Complete the worksheet for adjusted trial balanceThe worksheet for Boone Mailing Center appears below.BOONE MAILING CENTERWorksheetFor the Month Ended August 31, 2011Using the adjustment data below, complete the worksheet. Add any accounts that are necessary. Adjustment data:(a) Prepaid rent expired during August, $2.(b) Depreciation expense on equipment for the month of August, $8.(c) Supplies on hand on August 31 amounted to $6.(d) Salaries expense incurred at August 31 but not yet paid amounted to $10SolutionBOONE MAILING CENTERWorksheetFor the Month Ended August 31, 20111.10Preparing and posting closing entriesUse the information provided in the T-accounts below to prepare closing journal entries at December 31, 20X5.Rent ExpenseSolution:20X5(1) Dec 31 Services Revenue................................................ 73,000Income Summary ......................................... 73,000To close the revenue account and open Income Summary.(2) 31 Income Summary....................................................... 48,100Rent Expense ............................................... 8,600Salaries Expense .......................................... 20,000Insurance Expense ....................................... 3,500Depreciation Expense .................................. 16,000To close the expense accounts.(3) 31 Income Summary....................................................... 24,900Marcy Jones, Capital ................................... 24,900To close Income Summary.(4) 31 Marcy Jones, Capital ................................................ 24,000Marcy Jones, Withdrawals........................... 24,000To close the withdrawals account.Post the closing entries prepared in part (a) above to the T-accounts.1.11 Prepare closing entries and a post-closing trial balanceLatitudes Company had the following adjusted trial balance.LATITUDES COMPANYAdjusted Trial BalanceFor the month ended June 30, 20X1Enquired:(a) Prepare closing entries at June 30, 20X1.(b) Prepare a post-closing trial balance.Solution:(a)Service Revenue ...................................................................................................... 4,100Income Summary ....................................................................................... 4,100 Income Summary ..................................................................................................... 3,900Supplies Expense ....................................................................................... 2,300Miscellaneous Expense .............................................................................. 300 Salaries Expense ................................................................................................................... 1,300Income Summary (200)Retained Earnings (200)Retained Earnings (300)Dividends (300)(b)LATITUDES COMPANYPost-closing Trial BalanceFor the month ended June 30, 20X1Account titles Debits CreditsCash $ 3,700Accounts Receivable 3,900Supplies 500Accounts Payable $ 1,800Unearned Revenue 200Share Capital-Ordinary 5,000Retained Earnings 700DividendsService RevenueSalaries ExpenseMiscellaneous ExpenseSupplies ExpenseSalary Payable 400$8,100 $8,1001.12 Preparation of a classified statement of financial positionThe adjusted trial balance for Alpine Climbing Adventures has been alphabetized as follows:ALPINE CLIMBING ADVENTURESAdjusted trial BalanceMarch 31, 20X7Accounts payable..................................................................... € 2,400Accounts receivable................................................................. € 6,000Accumulated depreciation, equipment..................................... 14,000Amy Rooniak, capital .............................................................. 36,700Amy Rooniak, withdrawals ..................................................... 47,000Cash ......................................................................................... 15,000Depreciation expense, equipment ............................................ 1,400 Equipment................................................................................ 41,000Insurance expense.................................................................... 3,900Interest expense (660)Long-term notes payable ......................................................... 11,000Rent expense............................................................................ 15,000 Revenues.................................................................................. 122,000Supplies (540)Supplies expense...................................................................... 3,600Telephone expense................................................................... 4,200Unearned revenues................................................................... 22,000Utilities expense....................................................................... 1,800Wages expense......................................................................... 68,000 _______Totals ....................................................................................... €208,100 €208,100Required1. Journalize the closing entries.2. Prepare a statement of comprehensive income and a statement of change in owner’s equity for the year ended March 31, 20X7, and a classified statement of financial position at March 31, 20X7. The owner made an additional investment during the year of €5,000. A €6,000 payment on the long-term notes payable will be made during the year ended March 31, 20X7.Solution:20X7 Closing entries:March 31 Revenues............................................................... 122,000Income Summary ........................................... 122,000To close the revenue account.31 Income Summary .................................................. 98,560Depreciation Expense, Equipment ................. 1,400Insurance Expense.......................................... 3,900Interest Expense (660)Rent Expense.................................................. 15,000Supplies Expense ........................................... 3,600Telephone Expense ........................................ 4,200Utilities Expense ............................................ 1,800Wages Expense .............................................. 68,000To close expense accounts.31 Income Summary ................................................. 23,440Amy Rooniak, Capital................................... 23,440To close the income summary to capital.31 Amy Rooniak, Capital.......................................... 47,000Amy Rooniak, Withdrawals.......................... 47,000To close withdrawals to capital.。

英文版会计学考试题及答案English Accounting Exam Questions and AnswersQuestion 1: Define the term "Double Entry Bookkeeping" and explain its significance in accounting.Answer 1: Double Entry Bookkeeping is a system of recording financial transactions in which every entry to an account requires a corresponding and opposite entry to a different account. This ensures that the accounting equation (Assets = Liabilities + Owner's Equity) remains in balance. The significance of double entry bookkeeping lies in its ability to provide an accurate and comprehensive picture of a business's financial status, facilitating better decision-making and financial control.Question 2: What is the purpose of a trial balance, and how does it help in the preparation of financial statements?Answer 2: A trial balance is a report that lists the balances of all general ledger accounts at a particular point in time, with debit and credit amounts. It is used to ensure that the debits and credits have been recorded correctly. The trial balance helps in the preparation of financial statements by identifying any discrepancies in the accounting records, which can then be rectified before finalizing the statements.Question 3: Explain the difference between "AccrualAccounting" and "Cash Accounting."Answer 3: Accrual Accounting is a method of accounting where revenues and expenses are recognized when they are earned or incurred, not necessarily when cash is received or paid. This method provides a more accurate representation of a company's financial performance over a period. Cash Accounting, on the other hand, records transactions only when cash is exchanged. It is simpler and is often used by small businesses or those that operate on a cash basis.Question 4: Describe the process of preparing an income statement.Answer 4: Preparing an income statement involves several steps:1. List all the revenues for the period, such as sales and service income.2. Deduct all the expenses incurred to generate those revenues, including cost of goods sold, operating expenses, and taxes.3. Calculate the net income by subtracting total expenses from total revenues.4. The income statement should reflect the company's profitability over a specified period, typically a month, quarter, or year.Question 5: What are the main components of a balance sheet, and how do they relate to each other?Answer 5: The main components of a balance sheet are:1. Assets: What the company owns or controls with future economic benefit, divided into current assets (short-term) and non-current assets (long-term).2. Liabilities: Obligations the company owes to others, classified as current liabilities (due within one year) and long-term liabilities (due after one year).3. Owner's Equity: The residual interest in the assets of the entity after deducting liabilities, also known as shareholders' equity or net assets.These components are related through the fundamental accounting equation: Assets = Liabilities + Owner's Equity.Question 6: How does depreciation affect a company'sfinancial statements?Answer 6: Depreciation is a non-cash accounting method used to allocate the cost of tangible assets over their useful lives. It affects a company's financial statements in the following ways:1. It reduces the book value of the asset on the balance sheet.2. It increases the accumulated depreciation account, whichis a contra-asset account.3. It decreases net income on the income statement, as depreciation is an expense.4. It can lower taxable income, potentially reducing the company's tax liability.Question 7: What is the purpose of the statement of cash flows, and how does it differ from the income statement?Answer 7: The purpose of the statement of cash flows is to provide information about a company's cash receipts and payments during a period, showing how these cash flows affect the company's financial position. It differs from the income statement in that:1. It focuses on cash transactions, not accrual-basis accounting.2. It categorizes cash flows into operating, investing, and financing activities.3. It does not report net income but rather the net change in cash and cash equivalents.Question 8: Explain the concept of "Going Concern" and its importance in financial reporting.Answer 8: The Going Concern concept assumes that a businesswill continue to operate for the foreseeable future, allowing it to realize its assets and discharge its liabilities in the normal course of business. It is important in financial reporting because it underpins the accrual basis of accounting, which assumes that the business will continue to operate and therefore can recognize revenues and expensesover time.Question 9: What are the ethical considerations in accounting, and why are they important?Answer 9: Ethical considerations in accounting include honesty, integrity, objectivity, and confidentiality. Theyare important because they ensure the reliability andcredibility of financial information, which is crucial for stakeholders to make informed decisions. Ethical behavior also helps maintain public trust。

会计基础考试题库及答案英文版Accounting Fundamentals Exam Question Bank and Answers - English VersionQuestion 1: What is the primary purpose of financial accounting?Answer 1: The primary purpose of financial accounting is to provide financial information about a company to external users such as investors, creditors, and government agencies, which helps them make informed decisions.Question 2: Define the term "Double Entry Bookkeeping."Answer 2: Double Entry Bookkeeping is a system of recording financial transactions in which every transaction is recorded twice, once as a debit and once as a credit, to maintain the equality of the accounting equation.Question 3: Explain the difference between "Liabilities" and "Equity."Answer 3: Liabilities are the obligations of a company, which represent the amounts owed to external parties. Equity, on the other hand, represents the ownership interest in the company and the residual interest in the assets after deducting the liabilities.Question 4: What is the accounting equation?Answer 4: The accounting equation is Assets = Liabilities + Equity. It is the fundamental equation that underlies the double-entry bookkeeping system and shows the relationship between a company's assets, liabilities, and equity.Question 5: Describe the "Accrual Basis" of accounting.Answer 5: The accrual basis of accounting records revenues and expenses when they are earned or incurred, not when cash is received or paid. This method provides a more accurate picture of a company's financial performance over a period of time.Question 6: What is the purpose of a "Trial Balance"?Answer 6: A trial balance is a report that lists all the account balances from the general ledger at a particularpoint in time. It is used to check the accuracy of the accounting records by ensuring that the total of debitsequals the total of credits.Question 7: Differentiate between "Cash Flow Statement" and "Income Statement."Answer 7: The income statement reports a company's financial performance over a period of time, showing revenues, expenses, and net income or loss. The cash flow statement, however, shows the inflows and outflows of cash during the same period, focusing on the company's liquidity and ability to generate cash.Question 8: What is the role of "Depreciation" in accounting?Answer 8: Depreciation is the systematic allocation of thecost of a tangible asset over its useful life. It reflectsthe consumption of the asset's economic benefits over timeand is used to match the expense with the revenue generatedby the asset.Question 9: Explain the concept of "Financial Statements." Answer 9: Financial statements are formal records of acompany's financial activities, including the balance sheet, income statement, and cash flow statement. They provide a snapshot of the company's financial position and performance over a specific period.Question 10: What is the "Going Concern" assumption in accounting?Answer 10: The going concern assumption is the belief that a business will continue to operate for the foreseeable future. It is a fundamental assumption in accounting that allows for the preparation of financial statements based on the continuity of the business.End of Exam Question BankPlease note that this question bank is designed to provide a general overview of accounting fundamentals and should be used as a study aid. For a comprehensive understanding, further study and practical application are recommended.。

会计英语第四版试题及答案Section 1: Multiple Choice Questions1. Which of the following is a primary function of accounting?a) Data analysisb) Financial forecastingc) Budgetingd) Asset managementAnswer: a) Data analysis2. Which financial statement shows a company's revenues and expenses over a specific period of time?a) Balance sheetb) Income statementc) Statement of cash flowsd) Statement of retained earningsAnswer: b) Income statement3. The accrual basis of accounting recognizes revenues and expenses when:a) Cash is received or paidb) Goods are sold or purchasedc) Services are provided or receivedd) Assets are acquired or disposed ofAnswer: c) Services are provided or received4. The accounting equation can be expressed as:a) Assets = Liabilities + Owner's Equityb) Revenues - Expenses = Net Incomec) Cash Inflows - Cash Outflows = Net Cash Flowd) Assets + Liabilities = Owner's Equity + Revenues - ExpensesAnswer: a) Assets = Liabilities + Owner's Equity5. Which of the following statements is true about the International Financial Reporting Standards (IFRS)?a) They are principles-based accounting standardsb) They are used primarily in the United Statesc) They have been adopted by all countries globallyd) They focus only on financial reporting for public companiesAnswer: a) They are principles-based accounting standardsSection 2: Short Answer Questions1. Define the term "depreciation" in accounting.Depreciation is the systematic allocation of the cost of an asset over its useful life. It represents the decrease in value of an asset over time due to wear and tear, obsolescence, or other factors.2. What are the three main financial statements prepared by a company?The three main financial statements are the balance sheet, income statement, and statement of cash flows.3. Explain the difference between accounts payable and accounts receivable.Accounts payable refers to the money a company owes to its creditors or suppliers for goods or services received but not yet paid for. Accounts receivable, on the other hand, represents the money owed to a company by its customers for goods or services provided but not yet received payment for.4. What is the purpose of a trial balance in accounting?The purpose of a trial balance is to ensure the accuracy of the accounts and records by comparing the total debits and credits. It helps identify any errors or discrepancies that need to be rectified before preparing financial statements.5. Briefly explain the concept of "double-entry" bookkeeping.Double-entry bookkeeping is a system of recording financial transactions that requires each transaction to have at least two entries – a debit and a credit. This system ensures that the accounting equation (assets = liabilities+ owner's equity) remains in balance and helps maintain the accuracy of the financial records.Section 3: Essay Questions1. Discuss the role of ethics in accounting.Ethics plays a crucial role in accounting as it ensures the integrity, transparency, and fairness of financial reporting. Accountants are expectedto adhere to professional codes of conduct and ethical guidelines to maintain objectivity, confidentiality, and independence. Ethical behavior in accounting helps build trust among stakeholders, prevents fraudulent practices, and promotes accountability in financial management.2. What is the importance of internal controls in accounting?Internal controls are essential in accounting as they help safeguard assets, prevent and detect fraud, ensure accuracy in financial statements, and promote operational efficiency. They include procedures, policies, and mechanisms that mitigate risks, maintain the reliability of financial information, and protect a company's resources. Effective internal controls contribute to better financial management, compliance with regulations, and overall organizational success.3. Explain the concept of "going concern" in accounting.The concept of "going concern" in accounting assumes that a company will continue its operations and fulfill its obligations in the foreseeable future. It implies that the entity is financially stable, has sufficient resources to operate, and does not plan to liquidate or significantly curtail its activities. This assumption influences the valuation of assets, liabilities, and thepreparation of financial statements, giving stakeholders an understanding of the company's ability to continue as a viable entity.In conclusion, accounting is a fundamental aspect of business management that involves various principles, concepts, and practices. It serves as a tool for financial analysis, decision-making, and communication of financial information. Understanding accounting concepts and applying them accurately is crucial for professionals in the field to ensure reliable and transparent financial reporting.。

会计英语课后习题参考答案Suggested SolutionChapter 13.4.5.(b) net income = 9,260-7,470=1,790(c) net income = 1,790+2,500=4,290Chapter 21.a.To increase Notes Payable -CRb.To decrease Accounts Receivable-CRc.To increase Owner, Capital -CRd.To decrease Unearned Fees -DRe.To decrease Prepaid Insurance -CRf.To decrease Cash - CRg.To increase Utilities Expense -DRh.To increase Fees Earned -CRi.To increase Store Equipment -DRj.To increase Owner, Withdrawal -DR2.a.Cash 1,800Accounts payable 1,800 b.Revenue 4,500Accounts receivable 4,500 c.Owner’s withdrawals 1,500Salaries Expense 1,500 d.Accounts Receivable 750Revenue 7503.Prepare adjusting journal entries at December 31, the end of the year. Advertising expense 600Prepaid advertising 600Insurance expense (2160/12*2) 360Prepaid insurance 360Unearned revenue 2,100Service revenue 2,100Consultant expense 900Prepaid consultant 900Unearned revenue 3,000Service revenue 3,000 4.1. $388,4002. $22,5203. $366,6004. $21,8005.1. net loss for the year ended June 30, 2002: $60,0002. DR Jon Nissen, Capital 60,000CR income summary 60,0003. post-closing balance in Jon Nissen, Capital at June 30, 2002: $54,000 Chapter 31. Dundee RealtybankreconciliationOctober 31, 2009Reconciled balance $6,220 Reconciled balance $6,2202.April 7 Dr: Notes receivable—A company 5400Cr: Accounts receivable—A company 540012 Dr: Cash 5394.5Interest expense 5.5Cr: Notes receivable 5400June 6 Dr: Accounts receivable—A company 5533Cr: Cash 553318 Dr: Cash 5560.7Cr: Accounts receivable—A company 5533Interest revenue 27.73. (a)As a whole: the ending inventory=685(b) applied separately to each product: the ending inventory=6254. The cost of goods available for sale=ending inventory + the cost of goods=80,000+200,000*500%=80,000+1,000,000=1,080,0005.(1) 24,000+60,000-90,000*0.8=12000(2) (60,000+24,000)/(85,000+31,000)*(85,000+31,000-90,000)=18828Chapter 41. (a) second-year depreciation = (114,000 – 5,700) / 5 = 21,660;(b) second-year depreciation = 8,600 * (114,000 – 5,700) / 36,100 = 25,800;(c) first-year depreciation = 114,000 * 40% = 45,600second-year depreciation = (114,000 – 45,600) * 40% = 27,360;(d) second-year depreciation = (114,000 – 5,700) * 4/15 = 28,880.2. (a) weighted-average accumulated expenditures (2008) = 75,000 * 12/12 + 84,000 * 9/12 + 180,000 * 8/12 + 300,000 * 7/12 + 100,000 * 6/12 = 483,000(b) interest capitalized during 2008 = 60,000 * 12% + ( 483,000 –60,000) * 10% =49,5003. (1) depreciation expense = 30,000(2) book value = 600,000 – 30,000 * 2=540,000(3) depreciation expense = ( 600,000 – 30,000 * 8)/16 =22,500(4) book value = 600,000 – 30,000 * 8 – 22,500 = 337,5004. Situation 1:Jan 1st, 2008 Investment in M 260,000Cash 260,000June 30 Cash 6000Dividend revenue 6000 Situation 2:January 1, 2008 Investment in S 81,000Cash 81,000June 15 Cash 10,800Investment in S 10,800December 31 Investment in S 25,500Investment Revenue 25,5005. a. December 31, 2008 Investment in K 1,200,000Cash 1,200,000June 30, 2009 Dividend Receivable 42,500Dividend Revenue 42,500December 31, 2009 Cash 42,500Dividend Receivable 42,500b. December 31, 2008 Investment in K 1,200,000Cash 1,200,000December 31, 2009 Cash 42,500Investment in K 42,500Investment in K 146,000Investment revenue 146,000c. In a, the investment amount is 1,200,000net income reposed is 42,500In b, the investment amount is 1,303,500Net income reposed is 146,000Chapter 51.a. June 1: Dr: Inventory 198,000 Cr: Accounts Payable 198,000June 11: Dr: Accounts Payable 198,000Cr: Notes Payable 198,000June 12: Dr: Cash 300,000Cr: Notes Payable 300,000b. Dr: Interest Expenses (for notes on June 11) 12,100Cr: Interest Payable 12,100Dr: Interest Expenses (for notes on June 12) 8,175 Cr: Interest Payable 8,175c. Balance sheet presentation:Notes Payable 498,000Accrued Interest on Notes Payable 20,275d. For Green:Dr: Notes Payable 198,000Interest Payable 12,100Interest Expense 7,700Cr: Cash 217,800For Western:Dr: Notes Payable 300,000Interest Payable 8,175Interest Expense18,825Cr: Cash 327,0002.(1) 20?8 Deferred income tax is a liability 2,400 Income tax payable 21,60020?9 Deferred income tax is an asset 600 Income tax payable 26,100(2) 20?8: Dr: Tax expense 24,000 Cr: Income tax payable 21,600 Deferred income tax 2,400 20?9: Dr: Tax expense 25,500 Deferred income tax 600Cr: Income tax payable 26,100 (3) 20?8: Income statement: tax expense 24,000 Balance sheet: income tax payable 21,600 20?9: Income statement: tax expense 25,500 Balance sheet: income tax payable 26,1003.a. 1,560,000 (20000000*12 %* (1-35%))b. 7.8% (20000000*12 %* (1-35%)/20000000)5.Notes Payable 14,400Interest Payable 1,296Accounts Payable 60,000+Unearned Rent Revenue 7,200Current Liabilities 82,896Chapter 61. Mar. 1Cash 1,200,000Common Stock 1,000,000Paid-in Capital in Excess of Par Value 200,000Mar. 15Organization Expense 50,000Common Stock 50,000Mar. 23Patent 120,000Common Stock 100,000Paid-in Capital in Excess of Par Value 20,000The value of the patent is not easily determinable, so use the issue price of $12 per share on March 1 which is the issuing price of common stock.2. July.1Treasury Stock 180,000Cash 180,000The cost of treasury purchased is 180,000/30,000=60 per share.Nov. 1Cash 70,000Treasury Stock 60,000Paid-in Capital from Treasury Stock 10,000Sell the treasury at the cost of $60 per share, and selling price is $70 per share. The treasury stock is sold above the cost. Dec. 20Cash 75,000Paid-in Capital from Treasury Stock 15,000Treasury Stock 90,000The cost of treasury is $60 per share while the selling price is $50 which is lower than the cost.3. a. July 1Retained Earnings 24,000Dividends Payable—Preferred Stock 24,000b.Sept.1Dividends Payable—Preferred Stock 24,000Cash 24,000c. Dec.1Retained Earnings 80,000Dividends Payable—Common Stock 80,000d. Dec.31Income Summary 350,000Retained Earnings 350,0004.a. Preferred stock gives its owner certain advantages over common stockholders. These benefits include the right to receive dividends before the common stockholders and the right to receive assets before the common stockholders if the corporation liquidates. Corporation pay a fixed amount of dividends on preferred stock.The 7% cumulative term indicates that the investors earn 7% fixed dividends.b. 7%*120%*20,000=504,000c. If corporation issued debt, it has obligation to repay principald. The date of declaration decrease the stockholders’ equity; the date of record and the date of payment have no effect on stockholders.5.a. Jan. 15Retained Earnings 35,000Accumulated Depreciation 35,000To correct error in prior year’s depreciation.b. Mar. 20Loss from Earthquake 70,000Building 70,000c. Mar. 31Retained Earnings 12,500Dividends Payable 12,500d. Apirl.15Dividends Payable 12,500Cash 12,500e. June 30Retained Earnings 37,500Common Stock 25,000Additional Paid-in Capital 12,500To record issuance of 10% stock dividend: 10%*25,000=2,500 shares;2500*$15=$37,500f. Dec. 31Depreciation Expense 14,000Accumulated Depreciation 14,000Original depreciation: $40,000/40=$10,000 per year. Book value on Jan.1, 2009 is $350,000(=$400,000-5*$10,000). Deprecation for 2009 is $14,000(=$350,000/25).g. The company does not need to make entry in the accounting records. But the amount of Common Stock ($10 par value) decreases 275,000, while the amount of Common Stock ($5 par value) increases 275,000.Chapter 71.Requirement 1If revenue is recognized at the date of delivery, the following journal entries would be used to record the transactions for the two years:Year 1Inventory ....................................................................................... 480,000 Cash/Accounts payable .......................................................... 480,000 To record purchase of inventoryInventory ....................................................................................... 124,000 Cash/Accounts payable .......................................................... 124,000 To record refurbishment of inventoryAccounts receivable ...................................................................... 310,000 Sales revenue ......................................................................... 310,000 To record sale of goods on accountCost of goods sold ........................................................................ 220,000Inventory ................................................................................. 220,000 To record the cost of the goods sold as an expense Sales returns (I/S) ......................................................................... 15,500* Allowance for sales returns (B/S) ........................................... 15,500 To record provision for return of goods sold under 30-day return period* 5% of $310,000Warranty expense ......................................................................... 31,000* Provision for warranties (B/S) ................................................. 31,000 To record provision, at time of sale, for warranty expenditures* 10% of $310,000Allowance for sales returns .......................................................... 12,400 Accounts receivable ............................................................... 12,400 To record return of goods within 30-day return period.It is assumed the returned goods have no value and are disposed of.Provision for warranties (B/S) ....................................................... 18,600 Cash/Accounts payable .......................................................... 18,600 To record expenditures in year 1 for warranty workCash .............................................................................................. 297,600* Accounts receivable ............................................................... 297,600 To record collection of Accounts Receivable* $310,000 – $12,400Year 2Provision for warranties (B/S) ....................................................... 8,400 Cash/Accounts payable .......................................................... 8,400 To record expenditures in year 2 for warranty workRequirement 2If revenue is recognized only when the warranty period has expired, the following journal entries would be used to record the transactions for the two years:Year 1Inventory ....................................................................................... 480,000 Cash/Accounts payable .......................................................... 480,000 To record purchase of inventoryInventory ....................................................................................... 124,000 Cash/Accounts payable .......................................................... 124,000To record refurbishment of inventoryAccounts receivable ...................................................................... 310,000 Inventory ................................................................................. 220,000 Deferred gross margin ............................................................ 90,000 To record sale of goods on accountDeferred gross margin .................................................................. 12,400 Accounts receivable ............................................................... 12,400 To record return of goods within the 30-day return period. It is assumed the goods haveno value and are disposed of.Deferred warranty costs (B/S) ...................................................... 18,600 Cash/Accounts payable .......................................................... 18,600 To record expenditures for warranty work in year 1. The warranty costs incurred are deferred because the related revenue has not yet been recognizedCash .............................................................................................. 297,600* Accounts receivable ............................................................... 297,600 To record collection of Accounts receivable* $310,000 – $12,400Year 2Deferred warranty costs ................................................................ 8,400 Cash/Accounts payable .......................................................... 8,400 To record warranty costs incurred in year 2 related to year 1 sales. The warranty costs incurred are deferred because the related revenue has not yet been recognized.Deferred gross margin .................................................................. **77,600Cost of goods sold ........................................................................ 220,000 Sales revenue ......................................................................... 297,600* To record recognition of sales revenue from year 1 sales and related cost of goods sold at expiry of warranty period* $310,000 – $12,400** ($90,000 – $12,400)Warranty expense ......................................................................... 27,000* Deferred warranty costs ......................................................... 27,000 To record recognition of warranty expense at same time as related sales revenue recognition* $18,600 + $8,400Requirement 3Allied Auto Parts Inc. might choose to recognize revenue only after the warranty periodhas expired if they are not able to make a good estimate, at the time of sale, of the amountof warranty work that will be required under the terms of the one-year warranty. If Allied is not able, at the time of sale, to make a good estimate of the warranty work that will be required, then the measurability criterion of revenue recognition is not met at the time of sale. The measurability criterion means that the amount of revenue can be reliably measured. If the seller is not able to estimate the amount of work that will have to be done under the warranty agreement, then it is not able to reasonably measure the profit that itwill eventually earn on the sales. The performance criteria might also be invoked here.The performance criterion means that the seller has transferred the significant risks and rewards of ownership to the buyer. As long as there is warranty work to be performed after the sale that is the responsibility of the seller, you might argue that performance is not substantially complete. However, if the seller was able to reliably estimate the amount of warranty work, then performance would be satisfied on the assumption that we could measure the risk that remains with the seller, and make a provision for it.2.Percentage-of-completion method:The first step in applying revenue recognition using the percentage-of-completion method (using costs incurred to date compared to estimated total costs to determine the percentage of completion) is to estimate the percentage of completion of the project at the end of each year. This is done in the following table (in $000s):End of 2005 End of 2006 End of 2007Total costs incurred $ 5,400 $ 12,950 $ 18,800 Total estimated costs 18,000 18,500 18,800 % completed 30% 70% 100%Once the percentage of completion at the end of each year has been calculated as above, the next step is to allocate the appropriate amount of revenue to each year, based on the percentage completed to date, less what has previously been recorded in revenue. This is done in the following table (in $000s):2005 2006 20072005 $20,000 × 30% $ 6,0002006 $20,000 × 70% $ 14,0002007 $20,000 × 100% $ 20,000 Less: Revenue recognized in prior years (0) (6,000) (14,000) Revenue for year $ 6,000$8,000$6,000Therefore, the profit to be recognized each year on the construction project would be:2005 2006 2007 TotalRevenue recognized $ 6,000 $ 8,000 $ 6,000 $ 20,000Construction costs incurred (expenses) (5,400) (7,550) (5,850) (18,800) Gross profit for the year $ 600$ 450$150$ 1,200The following journal entries are used to record the transactions under thepercentage-of-completion method of revenue recognition:2005 2006 20071. Costs of construction:Construction in progress .................. 5,400 7,550 5,850Cash, payables, etc. ........................ 5,400 7,550 5,850 2. Progress billings:Accounts receivable ............ 3,100 4,900 12,000 Progress billings ............ 3,100 4,90012,0003. Collections on billings:Cash .................................... 2,400 4,000 12,400 Accounts receivable ...... 2,400 4,000 12,400 4. Recognition of profit: Construction in progress ..... 600 450 150Construction expense.......... 5,400 7,550 5,850 Revenue from long-termcontract ...................... 6,000 8,000 6,000 5. To close construction in progress:Progress billings .................. 20,000 Construction in progress . 20,0002005 2006 2007Balance sheetCurrent assets:Accounts receivable $ 700 $ 1,600 $ 1,200 Inventory:Construction in process 6,000 14,000 Less: Progress billings (3,100) (8,000)Costs in excess of billings 2,900 6,000Income statementRevenue from long-term contracts $ 6,000 $ 8,000 $ 6,000 Construction expense (5,400) (7,550) (5,850) Gross profit $ 600$ 450$1503.a. The three criteria of revenue recognition are performance, measurability, andcollectibility.Performance means that the seller or service provider has performed the work.Depending on the nature of the product or service, performance may mean quitedifferent points of revenue recognition. For example, for the sale of products, IAS18 defines performance as the point when the seller of the goods has transferred the risks and rewards of ownership to the buyer. Normally, this means that performance is done at the time of sale. Although the seller may have performed much of the work prior to the sale (production, selling efforts, etc.), there is still significant risk to the seller that a buyer may not be found. Therefore, from a reliability point of view,revenue recognition is delayed until the point of sale. Also, there may be significant risks remaining with the seller of the product even after the sale. Warranties given by the seller are a risk that remains with the seller. However, if this risk can be reliably estimated at the time of sale, revenue can be recognized at the point of sale.Performance is quite different under a long-term construction contract. Here,performance really is considered to be a measure of the work done. Revenue isrecognized over the production period as the work is performed. It is intended toreflect the amount of effort expended by the seller (contractor). Although legal title won’t transfer to the buyer until the project is completed, revenue can be reco gnized because there is a known and committed buyer. If the contractor is not able to estimate how much of the work has been done (perhaps because he or she can’treliably estimate how much work must still be done), then profit would not berecognized until the extent of performance is known.Measurability means that the seller or service provider must be able to reliablyestimate the amount of the revenue from the sale or service. For the sale of products this is generally known at the time ofsale (the sales price is set). However, if the seller provides a return period, it may be necessary to estimate the volume of returns at the time of sale in order to measure the revenue that will be recognized.Collectibility means that the seller or the service provider has reasonable assurance that the sales price will actually be collected. In most cases for the sales of products, the seller is able to recognize revenue at the time of sale even if the sale is on account.This is because the seller has experience with its customers and is able to estimate reliably the risk of non payment. As long as the seller is able to make this estimate, it is appropriate to recognize the revenue but to offset it with a provision for possible non collection. If the seller is unable to make reliable estimates of future collection ofamounts owing, the recognition of revenue would be delayed until the cash is actually received. This is what is done using the instalment sales method of revenuerecognition.b. Because of the performance criterion of revenue recognition, it would seem to be most appropriate to recognize most revenue as the seller or service provider performs thework. This would be the best measure of performance. This would mean, for example,that sellers of products would recognize their revenue over the whole production, selling, and post sales servicing periods. As we saw above, this is not commonly done because,in many cases, there are still significant risks that are retained by the seller (risk of not being able to sell the product, for example). There are also measurement risks (knowingthe selling price) that exist prior to the sale. The percentage-of-completion method of revenue used for some long-term construction contracts would seem to most closely recognize revenue as the work is performed. As mentioned in Part 1, we are able to recognize revenue on this basis since a contract exists which commits the purchaser tobuy the project (assuming certain conditions are met) and the sales price is known because of the existence of the contract. 4.If all revenue is recognized when a student registers for the course, profit for 2007 would be:Sales Revenue1:Manuals and initial lessons (200 × $100) $ 20,000 Additional lessons ((200 × 8) × $30) 48,000 Examinations ((200 × 80%) ×$130) 20,800 Total sales revenue 88,800Cost of sales:Manuals and initial lessons (200 × ($15 + $3)) 3,600 Additional lessons ((200 × 8) × $3)) 4,800 Examinations ((200 × 80%) ×$30) 4,800 Total cost of sales 13,200Depreciation of development costs:$180,000 × (200/1,000) 36,000 Profit $ 39,6005.FINISH ENTERPRISESIncome Statementfor the year ending December 31, 2005Continuing operations (excluding the chemical division)Sales ($35,000,000 – $5,500,000) $ 29,500,000Cost of sales ($15,000,000 – $2,800,000) (12,200,000)Gross profit 17,300,000Selling & administration expenses($18,000,000 – $3,200,000) (14,800,000)Profit from operations 2,500,000Income tax expense (40%) 1,000,000Profit after tax $ 1,500,000Discontinuing operations (Chemical division)Sales 5,500,000Cost of sales (2,800,000)Gross profit 2,700,000Selling & administration expenses (3,200,000)Loss from operations (500,000)Income tax expense(40%) 200,000Loss after tax (300,000) Gain on discontinuance of the Chemical division 3,500,000 Tax thereon (1,400,000)After-tax gain on discontinuance of the Chemical division2,100,000Enterprise net profit$ 3,300,000Chapter 81.Payment of account payable.operatingIssuance of preferred stock for cash.financingPayment of cash dividend.financingSale of long-term investment.investingAmortization of bond discount.no effectCollection of account receivable.operatingIssuance of long-term note payable to borrow cash.financingDepreciation of equipment.no effectPurchase of treasury stock.financingIssuance of common stock for cash.financingPurchase of long-term investment.investingPayment of wages to employees.operatingCollection of cash interest.investingCash sale of land.InvestingDistribution of stock dividend.no effectAcquisition of equipment by issuance of note payable.no effectPayment of long-term debt. financingAcquisition of building by issuance of common stock.no effectAccrual of salary expense.no effect2.(a) Cash received from customers = 816,000(b) Cash payments for purchases of merchandise. =468,000(c) Cash payments for operating expenses. = 268,200(d) Income taxes paid. =36,9003.Cash sales …………………………………………... $9,000Payment of accounts payable……………………….-48,000Payment of income tax ………………………………-13,000Payment of interest ……………………………..…..-16,000Collection of accounts receivable ……………………93,000Payment of salaries and wages ……………………….. -34,000Cash flows from operating activitiesby the direct method -9,0004.Operating activities:Net loss-200,000Add: loss on sale of land 250,000Add: depreciation 300,000Add: amortization of patents 20,000Less: increases in current assets other than cash -750,000Add: increases in current liabilities 180,000Net cash flows from operating -200,000Investing activitiesSale of land -50,000Purchase of PPE -1,500,000Net cash flows from investing -1,550,000Financing activitiesIssuance of common shares 400,000Payment of cash dividend -50,000Issuance of non-current liabilities1,000,000Net cash flows from financing 1,350,000 Net changes in cash -400,000 5.。