Comprehensive Problem Part 1
John Jones began his consulting business, JJ Consulting, P.C., on July 1, 2012. During August, JJ
Consulting entered into the following transactions:
August 3. Received cash from clients as an advance payment for services to b
JJ Consulting PC
August 3 Cash
Received cash as advanced payment for services.
Received cash from clients on account.
9 Miscellaneous Expense
To which of the following taxes are employees not subject?
a. Medicare tax
Correct. Employees are not
subject to state unemployment
b. state unemployment tax
c. federal withholding tax
d. social security tax
On June 10, Ace Co. issued an $80,000, 6%,
Which of the Correct. Fixed assets are expected to last more than one year and is used by the
business in a productive manner.
classified as a
fixed asset in
a. land for sale
b. the latest movie
c. a popcorn machine
Which of the following should be shown on a statement of
cash flows under the financing activity section?
a. sale of a long-term investment in the common
stock of another company
Correct. Dividends paid are a
financing activity, whether on
common or prefe
Correct. $100,000 + $500,000 +
$190,000 - $40,000 = $750,000
Correct. Total stockholders'
equity is common stock plus
excess of issue price over par
minus the retained earnings
Accounting period concept requires that revenues and expenses be reported in proper period.
Accrual basis of Accounting revenues are reported on the income statement in the period in
which they are earned.
Matching concept- accounting concept su
Uncollectable (not collectable) owed for over 120 days or set standard, cant get in touch with
customer (Doesnt respond), customer files bankrupt.
Direct write off- account that isnt good, debit bad deb
Book entries and adjustments adjustment Trial Balance
1. Income statement Company Name / Income statement/ dates
2. Retained Earnings Statement company name/ retained earings/ dates
ISBN : 10 - 0-53848089-0
Business : purpose is to make a profit
Sevice Business :
Accounting: Can be defined as an information system that provides reporst to users
Other receivables do not include
a. taxes receivable.
Correct. Trade receivables are
receivables that result from sales
b. trade receivables.
c. officers and employees receivable.
d. interest receivable.
Allowance for Doubtful Accounts has a