Review Questions - Review Questions Chapter 1 1 Generally...

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Review Questions Chapter 1 1. Generally accepted accounting principles (GAAP) are formulated by the Financial Accounting Standards Board (FASB) 2. Which type of business organization is owned by its stockholders? 3. Which accounting concept or principle specifically states that we should record transactions at amounts that can be verified? 4. Fossil is famous for fashion wristwatches and leather goods. At the end of a recent year, Fossil’s total assets added up to $381 million, and owners’ equity was $264 million. How much were Fossil’s liabilities? $117 (381-264) 5. Assume that Fossil sold watches to a department store on account for $50,000. How would this transaction affect Fossil’s accounting equations? 6. Which part of the accounting equation does a sale on account affect? 7. Assume that Fossil paid expenses totaling $35,000. How does this transaction affect Fossil’s accounting equation? 8. Consider the overall effects of transactions 5 and 7 on Fossil. What is Fossil’s net income or net loss? 9. The balance sheet reports Financial position on a specific date 10. The income statement reports Results of operations for a specific period
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Chapter 2 3.Which sequence correctly summarizes the accounting process? 2. The left side of an account is used to record: Debits 3. Suppose your business has cash of $50,000, receivable of $60,000, and furniture totaling $200,000. The store owes $80,000on account and has a $100,000 note payable. How much is your equity? 7. Your business purchased supplies of $1000 on account. The journal entry to record this transaction is: Supplies 1000 Accounts Payable 1000
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