Chapter1_In_Class[1]

# Chapter1_In_Class[1] - 2 2. To illustrate this concept of...

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1 Chapter 1 Introduction to Managerial Accounting In-class Practice Questions 1. To illustrate the fundamental accounting equation, we analyze the following three transactions for BB Hotel. June 1: (a) Mr. Bryan Bober invested \$100,000 cash in the business. June 2: (b) BB Hotel paid \$1,000 cash fro housekeeping supplies. June 3: (c) BB Hotel purchased \$30,000 worth of furniture and equipment on account. Transaction (a) – Invested cash Transaction (b)—Paid cash for housekeeping supplies. Transaction (c)—Purchase of furniture and equipment on account. Take-away We can see how the property values (assets) of a hospitality firm can be determined at any point in time by adding the claims of creditors (liabilities) and the claims of the owners (owners’ equity) against these assets. It is also evident that at every step of the accounting process, the equality of the fundamental accounting equation is maintained.

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Unformatted text preview: 2 2. To illustrate this concept of vr=vg, we refer again to the three transactions introduced in In-class Practice question 1: Transaction (a)—Invested Cash. Transaction (b)—Paid Cash for Housekeeping Supplies Transaction (c)—Purchase of Furniture and Equipment on Account Take-away In these three examples, we saw how each transaction involved an equal exchange of values: The value received (vr) was always equal to the value given (vg). In each transaction, there was only one vr and one vg. However, many transactions involved two or more values received and/or two or more values given. In such cases, the equality of values exchanged will still prevail. 3 3. How we can determine what accounts need to be debited and what accounts need to be credited in recording business transactions (1) Borrowed \$10,000 from the ABC Bank, signing a 90-day promissory note. (2) Paid rent for the month, \$1,000 ....
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## This note was uploaded on 10/08/2011 for the course HTM 458 taught by Professor Bu during the Spring '09 term at S.F. State.

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Chapter1_In_Class[1] - 2 2. To illustrate this concept of...

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