College Accounting (Book Only): A Career Approach
13th Edition
ISBN: 9781337280570
Author: Scott, Cathy J.
Publisher: South-Western College Pub
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Textbook Question
Chapter 1, Problem 6DQ
When an owner withdraws cash or goods from the business, why is this considered an increase to the Drawing account and not an increase to the Wages Expense account?
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Which if the following is not an inclusion in gross income?
a. Payment for lost salaries
b. Payment for loss of earning capacity
c. Recovery of bad debts previously written off
d. Moral damages
Would the cash balance on the company's balance sheet increase by the amount paid to an employee if they no longer receive income from the company?
At the time companies write off accounts receivable, there is no effect on net income.
true or false
Chapter 1 Solutions
College Accounting (Book Only): A Career Approach
Ch. 1 - Prob. 1QYCh. 1 - Prob. 2QYCh. 1 - Which of the following accounts would increase...Ch. 1 - Which of the following statements is true? a....Ch. 1 - M. Parish purchased supplies on credit. What is...Ch. 1 - Define assets, liabilities, owners equity,...Ch. 1 - Prob. 2DQCh. 1 - How do Accounts Payable and Accounts Receivable...Ch. 1 - Describe two ways to increase owners equity and...Ch. 1 - What is the effect on the fundamental accounting...
Ch. 1 - When an owner withdraws cash or goods from the...Ch. 1 - Define chart of accounts and identify the...Ch. 1 - What account titles would you suggest for the...Ch. 1 - Prob. 1ECh. 1 - Determine the following amounts: a. The amount of...Ch. 1 - Dr. L. M. Patton is an ophthalmologist. As of...Ch. 1 - Describe a business transaction that will do the...Ch. 1 - Describe a transaction that resulted in each of...Ch. 1 - Label each of the following accounts as asset (A),...Ch. 1 - Describe a transaction that resulted in the...Ch. 1 - Describe the transactions that are recorded in the...Ch. 1 - On June 1 of this year, J. Larkin, Optometrist,...Ch. 1 - On July 1 of this year, R. Green established the...Ch. 1 - S. Davis, a graphic artist, opened a studio for...Ch. 1 - On March 1 of this year, B. Gervais established...Ch. 1 - In April, J. Rodriguez established an apartment...Ch. 1 - In July of this year, M. Wallace established a...Ch. 1 - In March, K. Haas, M.D., established the Haas...Ch. 1 - P. Schwartz, Attorney at Law, opened his office on...Ch. 1 - In March, T. Carter established Carter Delivery...Ch. 1 - In October, A. Nguyen established an apartment...Ch. 1 - Why Does It Matter? MACS CUSTOM CATERING, Eugene,...Ch. 1 - What Would You Say? A friend of yours wants to...Ch. 1 - Prob. 3A
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- A debit to the FICA Taxes Payable accounta. results in an increase in the cash account of the employer.b. results in a decrease in the liabilities of the employer.c. would have no corresponding credit.d. results in an increase in the operating expenses of the employee.arrow_forwardHow would each of the following items be reported on the balance sheet? a. Accrued vacation pay. b. Estimated taxes payable. c. Service warranties on appliance sales. d. Bank overdraft. e. Employee payroll deductions unremitted. f. Unpaid bonus to officers. g. Deposit received from customer to guarantee performance of a contract. h. Sales taxes payable. i. Gift certificates sold to customers but not yet redeemed. j. Premium offers outstanding. k. Discount on notes payable. l. Personal injury claim pending. m. Current maturities of long-term debts to be paid from current assets. n. Cash dividends declared but unpaid. o. Dividends in arrears on preferred stock. p. Loans from officers.arrow_forwardUnder the direct charge-off method, when a specific account receivable is written off, what account is debited and what is the effect of the write-off on net income and on assets? debit Accounts Receivable; the write off decreases net income and total assets debit Allowance for Uncollectible Accounts; the write off increases net income and total assets debit Uncollectible Accounts Expense the write off decreases net income and total assets debit Uncollectible Accounts Expense; the write off increases net income and total assets Aarrow_forward
- Are all expenditures a debit account? Are they debit accounts, despite the fact that Owner's Equity is a credit account? Is there ever a circumstance in which expenditures are credited rather than debited?arrow_forwardWhich of the following is included under the financing activities in the statement of cash flows? O Payment of salaries to employees O Proceeds from sale of equipment Purchase of new office computers O Withdrawal of cash made by the ownerarrow_forwardWhich of the following will affect net income? O O Writing off an Account Receivable. Estimating bad debts at the end of the year Re-establishing and collection of an account that was previously written off. O All of the above transactions will affect net income.arrow_forward
- When a business owner sells merchandise to or provides a service for a customer on account instead of receiving cash (cash to be received at a later date), this is a type of asset called a/an ____________________. Group of answer choices liability owner’s equity accounts receivable none of thesearrow_forward27.A company writes off as uncollectible an account receivable from a bankrupt customer. The company has an adequate amount in its Allowance for Uncollectible Accounts. What would be the effect of this transaction in the company's financial statements? a. Operating expenses for the period will increase. b. Total current assets will decrease. c. Net profit for the period will not be affected. d. Net profit for the period will decrease.arrow_forwardWithdrawals by an owner are found on the income statement as an expense True Falsearrow_forward
- A deferral refers to an event: A. that will never involve cash being paid at any time B. that will never involve an income statement account C. where the cash has already exchanged hands between the two parties D. where the cash has not yet been exchanged between the two partiesarrow_forwardThe liability created by a business owner when purchasing an asset like office supplies or equipment on account instead of paying cash at the time of purchase is called a/an ________________. Group of answer choices revenue none of these asset account payablearrow_forwardThe realization principle indicates that revenue should be recorded in the accounting records: when cash is collected from customers when goods are sold or services are provided to customers at the end of the accounting period only when the revenue can be matched by an equal dollar amount of expensesarrow_forward
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