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AC 107 Week 1 Unit 1 Assignment (Score 49.5/50)
AC 107 Week 1 Discussion
AC 107 Week 2 Unit 2 Assignment (Score 47/50)
AC 107 Week 4 Unit 4 Key Assessment
AC 107 Week 7 Unit 7 Key Assessment CLO 3

AC 107 Final Exam Guide (100% Score)
AC 107 Week 1 Quiz (100% Score)
AC 107 Week 4 Midterm Exam (100% Score)
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AC 107 Final Exam Guide (100% Score)
Question 1
On any given day, it is unlikely that the balance in the Cash account in
the depositor's general ledger will be the same as the bank balance.

Question 2
In the journal entry to record the daily cash receipts for sales, a cash
shortage in a change fund is entered as a debit to Cash Short and Over
for the amount of the shortage.
Question 3
To reconcile the bank statement, which of the following amounts would
be added to the bank statement ending balance?
Question 4
The check written to establish the petty cash fund is recorded in the
journal by entering a debit to Petty Cash and a credit to Cash for the
amount of the check written.
Question 5
Part of the Sarbanes-Oxley Act (SOX) requires that management of
publicly traded companies provide a statement that they understand their
responsibility for maintaining adequate internal controls as well as a
report on the effectiveness of the current controls.
6
The control activities of internal controls include the following:

Question 7
Management creates the control environment for a business by setting
the ethical and professional norms.
Question 8
The Sales Returns and Allowance account is credited for the selling
price of any merchandise returned by a customer.
Question 9
Sales Revenue less sales returns and allowances and less sales discounts
equals net sales.
Question 10
The amount of sales tax collected is recorded in the Sales Tax Revenue
account.
Question 11

A customer returns merchandise that was delivered in poor condition
and that does not meet specifications. The account that the customer
would credit for the amount of the return is
Question 12
Merchandise is sold on account for $90, and the sale is subject to sales
tax of $5.40. The Sales Revenue account should be credited for
Question 13
A list showing the amount due from each customer as of a specified date
is known as a
Question 14
Cash discounts off the invoice price of goods sold may be granted by the
seller to encourage early payment of the invoice.
Question 15
When a business uses the perpetual inventory system the balance in the
Inventory account is updated every time that merchandise is acquired or
sold.

Question 16
For merchandising businesses using the periodic inventory system,
the account "Purchases" is used only to record the cost of merchandise
acquired for resale.
Question 17
The discount terms on an invoice are 3/15, n/30. This means that
Question 18
Postings to the accounts payable ledger and the accounts receivable
ledger should be completed daily.
Question 19
Which of the following indicates that the buyer must pay the
transportation costs for items purchased?
Question 20

An invoice of $300 dated April 2 is subject to credit terms of 2/10, n/30.
If the invoice is paid on April 10, the amount to be paid would be
Question 21
When a business uses a subsidiary accounts receivable ledger, there is
no need to keep a summary, controlling accounts receivable account in
the general ledger.
Question 22
If a business sells its products first-in, first-out so that perishable items
do not spoil, the accounting department is required to use the FIFO
method of valuing ending inventory and cost of goods sold on the
financial statements.
Question 23
Understating ending inventory causes the net income to also be
understated.
Question 24

If the market value (replacement cost) of inventory is less than the
inventory value reported in the ledger, the lower-of-cost-or-market rule
requires that we record a loss as soon as we are aware of it.
Question 25
When merchandise is purchased on account and the PERPETUAL
inventory system is used, the journal entry for the purchase would
include:
Question 26
Under the PERIODIC inventory system, the merchandise inventory and
the cost of goods sold for the current period are determined
Question 27
The following data applies to a particular item of merchandise. The first
numeric column shows the quantity purchased and the second numeric
column shows the purchase price of each unit.
On hand at the start of the period 300 $5.10
1st purchase 500 $5.20
2nd purchase 700 $5.30
3rd purchase 600 $5.50

Number of units available for sale 2,100
On hand at the end of the period - 500
Number of units sold during the period 1,600
Calculate the cost of goods sold using the FIFO method for the 1,600
units sold.
Question 28
The following data applies to a particular item of merchandise. The first
numeric column shows the quantity purchased and the second numeric
column shows the purchase price of each unit.
On hand at the start of the period 300 $5.10
1st purchase 500 $5.20
2nd purchase 700 $5.30
3rd purchase 600 $5.50
Number of units available for sale 2,100
On hand at the end of the period - 500
Number of units sold during the period 1,600
Calculate the cost of goods sold using the LIFO method for the 1,600
units sold.
Question 29

When a business uses the periodic inventory system, the first adjusting
entry to Merchandise Inventory will close the beginning balance to zero
with a credit. The second entry to Merchandise Inventory will add the
balance counted during the physical count with a debit.
Question 30
Under the accrual basis of accounting, revenue is recorded when earned
regardless of when cash is received.
Question 31
Unearned revenue is reported as a(n)
Question 32
Sports, Inc. plans to sell season football tickets for the 10 games played
from September through November. The tickets sell for $45 per season
package On April 30, the office reports that it has sold 200 season ticket
packages. The correct entry to record the sale of the season tickets is
Question 33

The journal entry to record a cash shortage in the change drawer will
include a credit to the account "Cash Over and Short".
Question 34
The consistency principle states that, in general, accountants should use
the same accounting methods from one period to the next.
Question 35
The cost of goods available for sale minus the cost of goods sold =
Question 36
The lower-of-cost-or-market rule is based on which accounting
principle?
Question 37

The FIFO method of accounting for inventory and cost of goods sold
assumes that the oldest items are the first ones sold and the newest goods
are still in ending inventory.
Question 38
Unearned revenue is a liability account.
Question 39
A business using the perpetual inventory system reports $125,000 in the
Inventory asset account at the end of the accounting period. A physical
count of inventory shows that there is $130,000 actually on hand. The
journal entry to adjust the accounting records will include a debit to
Inventory Short and Over for $5,000.
Question 40
Which of the following statements about the expanded income statement
for a business using the periodic inventory method is FALSE?

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Discussion Questions
1. Who's Who in Accounting:
o Who is the SEC? What is their role in the financial markets
of the United States?
o Who is the FASB? What is their role in accounting and the
preparation of financial reports?
o In your own words explain what is meant by Generally
Accepted Accounting Principles.
o Who is the IASB? Do you think that the United States should
change its rules for accounting in order to meet the goal of
requiring uniform financial statements throughout the world?

o In light of the recession of 2008/2009 and economic
problems created during that time, do you think that the SEC
was doing a good job? Why or why not?
2. What is the Purpose of Accounting:
o What is the purpose of Accounting?
o Identify and describe the four user groups normally interested
in financial information. What kind of information is needed
by each of these groups?
o There are several professional certifications available to
accountants. Explain the roles of the Certified Public
Accountant (CPA), Certified Management Accountant
(CMA), and Certified Internal Auditor (CIA).
o If you were planning a career in accounting which of these
certifications would you be interested in earning? Why?
3. Would you Like to Own your Own Business (Optional for
secondary posting): Have you ever considered owning your own
business? If so, what business would it be? Would it be a service,
merchandising, or manufacturing business? Explain what form of
ownership structure you would prefer and why.
===============================================

Question 1
Stockholders own which type of business?
Question 2
A business that purchases products from another business to sell to
customers is called a
Question 3

An example of an expense is
Question 4
The financial statement that shows the amount of the company's assets,
liabilities, and owner's equity on a specific date is called
a(an)
Question 5
Increases in owner's equity may come from
Question 6
The accounting equation may be expressed as
Question 7

Jason purchased office equipment for $4,800 on account. This
transaction would
Question 8
GAAP are the procedures and guidelines to be followed in the
accounting and reporting process.
Question 9
Since supplies last for several months, they are recorded as
assets.
Question 10
According to the business entity concept, a proprietor may
include nonbusiness assets and liabilities in the business entities
accounting records.

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AC 107 Week 1 Unit 1 Assignment (Score 49.5/50)
UNIT 1 VOCABULARY
MATCHING
IN THE BOX PROVIDED NEXT TO EACH
VOCABULARY TERM RECORD THE LETTER OF ITS
DEFINITION
Term Definition
1. Account A. Three fundamental
elements: Assets = Liabilities + Owner’s Equity

2. Accounts Payable B. Reports
assets, liabilities, and owner’s equity on a specific date.
Confirms that the
accounting equation is in balance.
3. Accounts Receivable C. Concept
that non-business assets and liabilities are not included in
the business records.
4. Accounting Equation D. The costs of
doing business. Costs incurred for the purpose of earning revenue.
5. Assets E. Withdrawals by the
owner that reduce capital by withdrawing cash or
other assets for personal
use.
6. Balance Sheet F. A business that
makes a product to sell.
7. Business Entity Concept G. A
record where we collect information that is similar. For example, all
increases

and decreases in the bank
balance are recorded in the Cash account.
8. Corporation H. Ownership
structure in which more than one person owns the business.
9. Expenses I. An act passed by
Congress to help improve reporting practices of public companies.
10. GAAP J. Unwritten promise to pay
a supplier for purchases or services received.
11. Income Statement K. A type of
ownership structure in which stockholders own the business.
12. Liabilities L. Generally
Accepted Accounting Principles. Procedures and guidelines
developed by FASB to be
followed in the accounting and reporting process.
13. Manufacturing Business M.
Reports revenue, expenses, and net income or net loss.

14. Merchandising Business N. A
business that buys products to sell.
15. Net Income (Profit) O. Amount the
business charges its customers for services or products sold.
16. Owner’s Name, Drawing P. A
business that earns revenue by providing a service rather than a product.
17. Owner’s Equity (Capital) Q.
Excess of total revenues over total expenses. Revenues are greater than
expenses.
18. Partnership R. Ownership
structure in which only one person owns the business.
19. Revenue S. The category
where we record amounts owed by a business to another business
or individual (Debts).
20. Sarbanes-Oxley Act T. Reports
beginning capital, plus net income, less withdrawals to compute ending

capital for an accounting
period
21. Service Business U. Amount
owed to a business by its customers for the sale of goods or services.
22. Sole Proprietorship V. The
amount by which business assets are greater than liabilities.
23. Statement of Owner’s Equity W.
Items owned by the business that will provide future benefits.
ACCOUNTING ELEMENTS
Click on the CLASSIFICATION box next to the account name, then
click on the arrow
to see the dropdown list and identify each of the accounts as an asset,
iability,

owner’s equity, revenue or expense account. Then click on the
FINANCIAL STATEMENT
box next to the account to see the dropdown list and identify the
statement where
this account is reported. The chart of account handout (tab in this
assignment file)
is an excellent resource to use to check your
answers!
Asset
Liability Income Statement
Owner’s Equity Statement of Owner’s
Equity
Revenue Balance Sheet
Expense
ACCOUNT CLASSIFICATION FINANCIAL
STATEMENT
Cash
Rent Expense

Accounts Payable
Accounts Receivable
Service Fees Revenue
Office Equipment
Supplies
Wages Expense
Wages Payable
Prepaid Insurance
John Smith, Drawing
John Smith, Capital

IDENTIFYING AFFECTED
ACCOUNTS.
Every business transaction will affect at least two accounts in the
financial records. This
week each one will affect TWO and ONY TWO accounts. For each of
the transactions below
===============================================
1. Analyzing Financial Transactions: In Chapter 4 of your text,
pages 90 – 93, carefully review the accounting transactions for
Rohan's Campus Delivery and how they are entered in the general

journal. Before you begin please watch the video demonstrations
of the completion of these journal entries in the Week 2
Classroom.
Once you understand how these journal entries are prepared, please
select one transaction from the list of transactions for Barry Bird
Basketball Camp in the Mastery Problem on pages 125-126 and
answer the questions below for that transaction. There are 23
journal entries in this problem, so each of you must select an entry
that has not been completed by a classmate! First come, first
served! Please be sure to identify your entry by the date of the
transaction and provide your response in your own words. One
helpful way to reach the minimum 250-word count requirement is
to define any new terms or explain any new concepts that you are
using.
o What happened? (Describe the transaction)
o Which two accounts are affected by this transaction? Are
they increased or decreased?
o What type of accounts is each of the two that are affected
(assets, liabilities, owner's equity, revenue, expense)?
o What is the normal balance of each of these two accounts?
(Normal debit balance or normal credit balance?)
o In the journal entry, which account is debited and which
account is credited?
2. Ethics Question: Bob Jones owns a small business as a sole
proprietor. One day he used the company debit card to fill up the
gas tank in his wife’s car that was not used for business purposes.

Using a debit card takes money out of his bank account
immediately. He told his bookkeeper to record a debit for the $40
charge to the account “Auto Expense” and to record the credit to
Cash.
o What account should the gas have been debited to?
o What account would be credited?
o What accounting concept has been violated? (Hint: Check
your vocabulary matching exercise in the Week 1
Assignment.)
o How will this transaction affect the income statement for this
month?
o Do you think this is ethical? Why or why not?
===============================================

Question 1
If John Smith, the owner of Smith Accounting Services, deposits
$10,000 in cash as the original investment into his business, the journal
entry to record this transaction includes a debit to cash for $10,000 and a
credit to John Smith, Capital for $10,000.
2 out of 2 points
To debit an account means to enter an amount on the left side of the
account in the t-account, the general journal, and the general
ledger.
Question 3
2 out of 2 points
At least two accounts are afffected by every
transaction.
Question 4
2 out of 2 points

The purpose of a journal is to provide a chronological record of all
transactions completed by the business.
Question 5
2 out of 2 points
Your business pays the monthly rent in the amount of $1,000. The
journal entry to record this transaction includes a debit to the Cash
account for $1,000 and a credit of $1,000 to the Rent Expense account.
Question 6
2 out of 2 points
The second set of debit and credit columns in the general ledger is
used to show the new balance in the account after an entry has been
posted from the journal.
Question 7

2 out of 2 points
Assets and expense accounts have a NORMAL
Question 8
2 out of 2 points
The Owner, Drawing account should be used to
show
Question 9
2 out of 2 points
The normal balance of the Owner's Capital account
Question 10

2 out of 2 points
The Posting Reference column of the journal provides a cross-
reference between the
===============================================
VOCABULARY
MATCHING
IN THE BOX PROVIDED NEXT TO EACH
VOCABULARY TERM RECORD THE LETTER OF ITS
DEFINITION

Term Definition
1. Account balance A. A day-by-
day listing of the transactions of a business.
2. Chart of accounts B. The side of
an account where an increase is recorded.
3. Credit C. This balance shows the
ending amount calculated in an account.
It is the difference
between the footings of an account in a t-account
and also the ending
balance in the general ledger.
4. Debit D. To post to the right side
of an account.
5. General ledger E. A list of all
accounts and their balances to prove the equality of
debits and credits.

6. Journal F. A complete set of all
accounts used by a business. It accumulates the
complete record of the
debits and credits made to the account.
maintains the running
balance.
7. Normal balance G. Any
document that provides information about a business transaction.
8. Posting H. To post to the left
side of an account.
9. Source document I. A list of all
accounts used by a business.
10. Trial balance J. Copying the
debits and credits from the journal to the ledger.

DEBIT AND CREDIT
ANALYSIS
Click on the debit/credit box next to the account change,
then Select:
click on the arrow to see the dropdown list and
identify
whether the change will be recorded with a debit or a
credit. debit
credit
Hint: The Normal Balance Handout that is provided as a tab in this
assignment
file and in the Week 2 Learning Activities folder is an excellent
reference to help
you with this
assignment.
(a) The asset account Cash is increased with a
(b) The liability account Accounts Payable is increased with a

(c) The asset account Cash is decreased with a
(d) The revenue account Delivery Fees is increased with a
(e) The owner's Drawing account is increased with a
(f) The asset account Accounts Receivable is increased with a
(g) The Rent Expense account is increased with a
(h) The owner's Capital account is increased with a
(i) The Prepaid Insurance asset account is increased with a

EXERCISES 4-4A & 4-
5A
Complete Exercises 4-4A and 4-5A found on pp. 115 & 116 of
your textbook.
Post the account names and the debit and credit amounts.
Some of the account names
are provided. Fill in the names of the missing accounts and
the account numbers as the
posting reference. You will find these in the question on page
117. The dates and
descriptions have also been provided. After the journal is
completed, post the transactions
to the general ledger in the 'Ledger' tab, and then prepare
the trial balance in the
Trial Balance'
tab.

The first journal entry has been completed as an example for
you to follow. Please note
the following formatting
rules:
1. In this exercise two accounts are affected by each
transaction. One account is given to &nb
===============================================
1. Adjusting Journal Entries: Note: Before you answer this question
be sure to review the information about these journal entries in
your text and the video presentations and the supplementary
materials. Select one of the four following types of adjustments
and answer all of the questions below as they relate to the
adjustment you have chosen. Remember, your primary posting

must be a short answer essay of at least 250 words that fully
explains each part of the question.
1. Record depreciation expense
2. Adjust for supplies usage
3. Adjust prepaid insurance
4. Accrue wages earned but not yet paid
 Why is this adjusting journal entry prepared?
 Which accounts are affected? Are they increased or
decreased?
 Which account is debited and which one is credited?
How do we determine the amount of the adjustment
debit and credit?
 Are the affected accounts assets, liabilities, owner’s
equity, revenue, or expense accounts?
 Are these accounts reported on the income statement,
statement of owner's equity, or the balance sheet?
2. Cash vs. Accrual Accounting: Explain the difference between the
cash basis, modified cash basis, and the accrual basis measures of
performance. Provide examples of accounts that are treated
differently under the three methods. Be sure to review the related
PowerPoint Presentation in the Unit 3 Presentations/Lectures and
in the Supplementary Materials.
o Why, in most cases, does accrual basis net income provide a
better measure of performance than cash basis net income?

o Explain the purpose of adjusting entries as they relate to the
difference between cash and accrual accounting. Which
generally accepted accounting principle (GAAP) rule does
accrual accounting fulfill
Financial Statements: This question MAY NOT be used as your primary
posting. It may be answered only as a secondary or reply post with a
minimum 100-wordcount requirement. The three primary financial
statements that we have seen so far are the Balance Sheet, Statement of
Owner's Equity, and the Income Statement. Please describe which
account categories belong on which statement and identify them as
temporary or permanent accounts. These statements must be prepared in
a particular order. Which statements are prepared first, second, and
third? Why do we have to prepare them in this order?
Generally Accepted Accounting Principles: This question MAY NOT be
used as your primary posting. It may be answered only as a secondary or
reply post with a minimum 100-word count requirement.This week we
have learned about four of the generally accepted accounting principles
– revenue recognition, expense recognition, the matching principle, and
the historical cost principle. Briefly explain what is meant by each of
these and how they are applied to accrual accounting.
===============================================

Question 1
2 out of 2 points
Question 2
2 out of 2 points
A business that purchases products from another business to sell to
customers is called a
Question 3
2 out of 2 points
An example of an expense is
Question 4

2 out of 2 points
The financial statement that shows the amount of the company's
assets, liabilities, and owner's equity on a specific date is called
a(an)
Question 5
2 out of 2 points
Increases in owner's equity may come from
Question 6
2 out of 2 points
The accounting equation may be expressed as
Question 7
0 out of 2 points
Jason purchased office equipment for $4,800 on account. This
transaction would

Question 8
2 out of 2 points
GAAP are the procedures and guidelines to be followed in the
accounting and reporting process.
Question 9
2 out of 2 points
Since supplies last for several months, they are recorded as
assets.
Question 10
2 out of 2 points
According to the business entity concept, a proprietor may include
nonbusiness assets and liabilities in the business entities accounting
records.
===============================================

journal
Entires
This comprehensive problem is intended to serve as a mini-
practice set without the source documents. As such, students should
plan on about three to four hours to complete this
problem.
The following transactions took place during April 20--
. Requried;
Journal the following April entires in the general jouranl provided
in colums M-Q

Apr. 1 Night invested cash in business,
$90,000.
1 Paid insurance premium for six-month camping
season, $9,000.
2 Paid rent for lodge and campgrounds for the month of
April, $40,000.
2 Deposited registration fees,
$35,000.
2 Purchased 10 fishing boats on account for $60,000.
The boats have estimated useful lives of five years, at which time
they will be donated to a local day camp. Arrangements were made
to pay for the boats in
July.
3 Purchased food supplies from Acme Super Market on
account, $7,000.

5 Purchased office supplies from Gordon Office
Supplies on account, $500.
$38,600.
account, $8,200.
10 Paid wages to fishing guides,
$10,000.
$30,500.

Apr. 16 Purchased food supplies from Acme Super Market on
account, $9,000.
$10,000.
18 Paid postage,
$150.
$35,600.
account, $8,500.
$10,000.

$32,000.
$10,000.
account, $6,000.
1 Post the transaction from General Journal in Tab 1 in the
ledger accounts below.
2 Go to tab 3 and see if Col b and C balance. If they do you
have posted everything correctly
If they do not balance, you will need to find your posting
error in the general ledger below.
When you balance go to step 3

3 Go to Tab 4 and journal the adjusting entries
4 Come back to Tab 2 and post adjusting entries
in the orange rows.
5 Post the adjusting entries in the worksheet in Tab 3 in col D
and E
6 In the Worksheet (Tab 3) create an Adjusted Trial Balance.
by netting the debits and credits from the trial balance and
the adjusting entries in the adjusted trail balance columns.
Adjusting
Entries
a Office Supp;lies on hand
$100

b Food Supplies remaining on hand
$8000
c Insurance expired during the month of April
$1500
d Depreciation on Fishing Boats for April
$1000
===============================================
1. Internal Controls: There are five components of internal control:
o Control environment
o Risk assessment
o Control activities
o Information and communication system

o Monitoring processes.
In your own words explain the purpose of internal controls. Then
select one of the components shown above and explain the role it plays
in protecting the assets of the business. Many of these activities can be
observed in the workplace both inside and outside of the accounting
department. Please share any work experiences you may have had with
these activities or any that you have observed in other businesses, even if
they are not in the accounting department. Be sure to provide a
reference for any material used from a source.
Extra Questions: Bank Teller Ethics: Note: This question may not be
used as your primary posting. It may be answered only as a secondary or
reply post with a minimum 100-word count requirement.
Ben Thomas works as a teller for First National Bank. When he arrived
at work on Friday, the branch manager, Frank Mills, asked him to get his
cash drawer out early because the head teller, Naomi Ray, was
conducting a surprise cash count for all of the tellers. Surprise cash
counts are usually done four or five times a year by the branch manager
or the head teller and once or twice a year by internal auditors.
Ben's drawer was $100 short and his reconciliation tape showed that he
was in balance on Thursday night. Naomi asked Ben for an explanation,
and Ben immediately took $100 out of his pocket and handed it to her.
He went on to explain he needed the cash to buy prescriptions for his
son and for groceries and intended to put the $100 back in his cash
drawer on Monday, which was payday. He also told Naomi that this was
the first time he had ever “borrowed” money from his cash drawer and
that he would never do it again.
The American Institute of Certified Public Accountants (AICPA)
presents these steps in the ethical decision-making process:

1. Recognize issues when they arise.
2. Gather critical facts.
3. Identify the stakeholders.
4. Consider the alternative solutions.
5. Consider the effects of the decision on the stakeholders.
6. Consider your comfort level with the alternatives.
7. Consider the rules, regulations, and laws.
8. Make the decision.
9. Document your efforts.
10. Evaluate the outcome.
Based on the steps please answer the following questions.
 What are the ethical considerations in this case from both Ben’s
and Naomi’s perspectives?
 Who are the stakeholders who may be impacted by Naomi's
decision about how to handle this situation?
 What options does Naomi have to address the problem?
 What do you think Naomi should do?
References:
Heintz, J. & Parry, R. (2016). College Accounting (22nd ed.). Mason:
Thompson/South-Western.
===============================================

AC 107 Week 4 Midterm Exam (100% Score)
Question 1
Generally accepted accounting principles (GAAP) are the procedures
and guidelines to be followed in the process of preparing financial
statements.
Question 2
The Financial Accounting Standards Board (FASB) is a non-
governmental agency that creates the GAAP rules for accounting.
Question 3

Question 4
If the total of owner's equity + liabilities increased during the period,
then assets must also have increased.
Question 5
When the owner withdraws cash from the business it will result in an
increase in owner's equity.
Question 6
The balance sheet reports assets, liabilities and owner's equity on a
specific date.
Question 7
Stephen purchased office supplies for $800 in cash. This transaction
would
Question 8

To debit an account is to enter an amount on the left column in the
journal entry.
Question 9
Prepaid Insurance is an expense account.
Question 10
Mary's business has performed services on account. The journal entry to
record this transaction would include a debit to Cash and a credit to
Service Revenue.
Question 11
The normal balance of the Owner, Capital account
Question 12
The normal balance of the Accounts Receivable account is
Question 13
The balance sheet

Question 14
The purpose of the general journal is to provide a chronological record
of all transactions completed by the business.
Question 15
The purpose of the trial balance is to prove that the total of the debit
balances and the total of the credit balances in the ledger accounts are
equal.
Question 16
The journal provides the information needed to transfer debits and
credits to the accounts in the general ledger.
Question 17
Jason's business has purchased a new delivery van on account. The
journal entry to record this transaction includes
Question 18
The journal entry to record payment for Delivery Equipment that was
previously purchased on account would include

Question 19
If the owner of a company invests cash in the business, the journal entry
would include
Question 20
Service Revenue performed for cash received immediately is recorded in
the journal by
Question 21
If cash is paid for office rent, the journal entry includes
Question 22
Accounting for revenue using the cash basis of accounting means that no
entry is made to the revenue account until the cash is received for the
services performed.
Question 23

The book value of an asset is calculated by subtracting the accumulated
depreciation from the cost of the plant asset.
Question 24
If the total of expenses is greater than the total of revenue in the income
statement, the business has a net loss.
Question 25
A contra-asset has a normal debit balance.
Question 26
Adjusting entries always affect both an income statement account and a
balance sheet account.
Question 27
A business records revenue when earned and records expenses when
they are incurred regardless of whether the cash has been received or
paid. This business is using which basis of accounting?
Question 28

Supplies are reported at $500 on the trial balance, but only $350 are still
on hand as found during a physical count. The adjusting journal entry
would be:
Question 29
The Income Summary account appears on the income statement at the
end of the accounting period.
Question 30
The statement of owner's equity is a statement which summarizes all of
the changes in the Owner, Capital account during the accounting period.
Question 31
Assets, liabilities, and Owner, Capital are permanent accounts.
Question 32
The total revenue for the month of June was $6,500.

The total expenses for the month were $3,500.
Withdrawals (Owner, Drawing) for the month were $600.
The net income for the month was
Question 33
The order in which the financial statements should be prepared is
Question 34
The journal entry to close the revenue accounts at the end of the
accounting period includes
Question 35
The account to which the Owner, Drawing account is closed at the end
of the accounting period is
Question 36

The business entity concepts requires that non-business assets and
liabilities are not included in the business' records.
Question 37
A compound journal entry is one that records the transaction in three or
more accounts.
Question 38
The Generally Accepted Accounting Principle (GAAP) rule which says
that we record assets at their original cost is called the
Question 39
As of the end of the accounting period the employees have earned
$1,000, but payday is not until the next period. The adjusting entry
prepared at the end of the accounting period to record this includes
Question 40

Under which basis of accounting are plant assets such as buildings and
equipment recorded as assets when purchased and then depreciated as
they are used?
===============================================
AC 107 Week 4 Unit 4 Key Assessment
For this key assessment, please identify the ten (10) steps in the
accounting cycle and explain the purpose of each step in a short
paragraph. As you are writing please keep in mind that the question is
asking for the purpose of each step, not how it is completed! When
thinking about the purpose of a step consider why we are completing it
or what it tells us after it is completed. Be sure that you consider the
steps that we learned about in chapters 1-6 and not those from an
Internet website which may be somewhat different.

Please complete the essay on a Word document and upload it here. It
may be completed in a listing format rather than APA style. Don’t forget
to use complete sentences and correct spelling and
grammar. Explanations must be in your own words
===============================================
1. Journal Entries for Sales and Cash Receipts: Note: One way to
meet the 250-word minimum requirement for your primary post is
to define the new terms that you are using. Before you
begin, review the preparation of journal entries in the
Demonstration Problem on pages 375 – 381 and the video
demonstrations in the Unit 5 Resources explaining the preparation
of sales journal entries. Once you understand how these journal
entries are prepared, select one transaction from Problem 10-11B
on page 393 of the text, for Paul Jackson’s retail store and answer

the questions below for that transaction. Note: Each of you must
select an entry that has not been completed by a classmate! If all
the journal entries have been chosen, select one from the Chapter
11 discussion question. First come, first served! Please be sure to
identify your entry by the date of the transaction and provide your
response in your own words. Remember, the primary posting is a
short answer essay that fully explains your responses.
1. What happened? (Describe the transaction)
2. Which accounts are affected by this transaction? Are they
increased or decreased?
3. What is the normal balance of each of these accounts?
4. Which accounts are debited and by what amount? Explain
how you arrived at that amount.
5. Which accounts are credited and by what amount? Explain
2. Journal Entries for Purchases and Cash Payments: Note: One way
to meet the 250-word minimum requirement for your primary post
is to define the new terms that you are using. Review the
preparation of journal entries in the Demonstration problem on pp.
418-421 and the demonstration video in the Unit 5 Resources
explaining the preparation of journal entries for purchase
transactions. Once you understand how these journal entries are
prepared, please select one transaction from Problem 11-11B, on
page 433 of the text, for Debbie's Doll House, and answer the
questions below for that transaction. There are 12 journal entries in
this problem, but each of you must select an entry that has not been
completed by a classmate! If all of the journal entries have been

prepared select an entry from the Chapter 10 discussion question.
First come, first served! Please be sure to identify your entry by the
date of the transaction and provide your response in your own
words. Remember, the primary posting is a short answer essay that
fully explains your responses.
1. What happened? (Describe the transaction)
2. Which accounts are affected by this transaction? Are they
increased or decreased?
3. What is the normal balance of each of these accounts?
4. Which accounts are debited and by what amount? Explain
5. Which accounts are credited and by what amount? Explain
3. Sales Ethics: Note: This question may not be used as your primary
posting. It may be answered only as a secondary or reply post with
a minimum 100-word count requirement. Barbara’s Brownies
produces different varieties of brownies that she sells to grocery,
candy, and gift shops. These sales are made with the terms FOB
shipping point, and she generally ships the brownies on the same
day that the order is received or on the next day if necessary. The
company’s fiscal year end is December 31. During the last week of
December Barbara takes a look at her financial reports before
deciding when to ship orders received that week. If sales and
profits for the month and year have been good, she may delay
shipments until early January. If sales and profits have been poor,
she will deliver all that she can in December.

1. With terms of FOB shipping point, when does Barbara record
a sale? If she ships in January and records the sale in January
has she violated any accounting rules?
2. Do you think it is ethical for Barbara to delay shipments until
the next year? Why or why not? Who may be harmed by that
decision?
3. What impact will delaying the recording of sales until
January have on her financial statements for December and
January? Who may be harmed by that decision?
===============================================
Question 1
2 out of 2 points

If the terms of an invoice dated April 10 are 3/10, n/30, the invoice
must be paid on or before April 20 in order to be entitled to a cash
discount.
Question 2
2 out of 2 points
A cash discount is offered to encourage customers who purchase
merchandise on account to pay early.
Question 3
2 out of 2 points
Gross sales minus sales returns and allowances and minus sales
discounts equals net sales.
(Gross sales - sales returns and allowances - sales discounts = net
sales.)
Question 4
2 out of 2 points
After all the Accounts Receivable entries from the journal are posted
to the general ledger and the accounts receivable ledger, the ending

balance in the general ledger account for Accounts Receivable will be
equal to the total of the customers' balances in the Schedule of Accounts
Receivable.
Question 5
2 out of 2 points
Merchandise is sold on account for $90, and the sale is subject to
sales tax of $5.40. The Sales Revenue account will be credited
for
Question 6
2 out of 2 points
The summary Accounts Receivable account in the general ledger is
called a(n)
Question 7
2 out of 2 points
FOB shipping point means that the seller will pay the transportation
charges.
Selected Answer: False

Correct Answer: False
Response Feedback: Correct! With FOB shipping point the buyer
pays the freight charges.
Question 8
2 out of 2 points
For a merchandising business, the account "Purchases" is used only
to record the cost of merchandise acquired for
resale.
Question 9
2 out of 2 points
Purchase Returns and Allowances is a contra-purchases
account.
Question 10
2 out of 2 points
Which of the following indicates that the buyer will pay the
transportation costs?

===============================================
VOCABULARY MATCHING - SALES AND
PURCHASES
IN THE BOX PROVIDED BY EACH VOCABULARY TERM
RECORD THE LETTER OF ITS
DEFINITION
You can research these terms at the end of the
chapters and in the glossary.
Term Definition
1. Cash discounts A. A summary
account maintained in the general ledger with a subsidiary ledger.

2. Contra-cost account B. Shipping terms
indicating that transportation charges are paid by the seller.
3. Contra-revenue account C. The
expense account used to record the acquisition of goods for resale.
4. Controlling account D. Discounts to
encourage prompt payment by customers who buy merchandise
on credit.
5. Trade discount E. A separate
ledger made up of individual accounts that contain the details of a
controlling account.
6. FOB Destination F. An account with
a debit balance that is deducted from the related revenue account.
7. FOB Shipping Point G. An account with
a credit balance that is deducted from the related purchases account.
8. Subsidiary ledger H. Shipping terms
indicating that transportation charges are paid by the buyer.

9. Purchases account I. A reduction in
the price of merchandise granted by the seller because of
defects or other problems with
the merchandise
10. Sales allowance J. A reduction
from the list or catalog price offered to different classes of customers.
PROBLEM 10-11A & 10-12A - SOURK
DISTRIBUTORS
Complete Problems 10-11A & 10-12A found on page 388-389 of
your textbook.
Record the account names, the debit OR credit amount, and the
posting references.
Some of the account names are provided. If you cannot locate a
checkmark symbol for the

posting reference use a lower case "x". The dates and descriptions
have also been provided.
After the entry is completed, post the Accounts Receivable
transactions (only) to the general
ledger and then to the Accounts Receivable ledger in the next
exercise. After completing the
Accounts Receivable ledger complete the Schedule of Accounts
Receivable.
The posting reference should be completed for the Accounts
Receivable entries only for
both the general ledger and the accounts receivable
ledger.
122 Accounts
Receivable

REMEMBER - TOTAL DEBITS MUST EQUAL TOTAL
CREDITS IN EVERY TRANSACTION!
Here's a hint: When the customer pays an invoice after some of the
goods have been returned
subtract the selling price of the goods returned from the selling price of
goods on the original
invoice. Then calculate sales tax payable on the price of the goods that
the customer kept. The
customer will pay for the total of the remaining goods plus the sales tax
on those goods.
DATE ACCOUNTS &
DESCRIPTIONS POST REF dr
cr
J.1 Mar. 1 Accounts Receivable / Donachie&
Co.

Sale on account No. 33C to Donachie& Co., $1,700 plus
sales tax.
DATE ACCOUNTS &
cr
J.2 Mar. 3
Sales Revenue
Sale on account No. 33D to R.J. Kibubu, Inc., $2,190 plus
sales tax.
DATE ACCOUNTS &
cr
J.3 Mar. 5 Sales Returns and
Allowances
&nbs
===============================================

Question 1
2 out of 2 points
In a business that sells its products first-in, first-out so that they don't
spoil, the accounting department must also use the first-in, first-out
method for valuing ending Inventory and Cost of Goods
Sold.
Question 2
2 out of 2 points
Understating the ending inventory causes the cost of goods sold to be
overstated.

Question 3
2 out of 2 points
Under the perpetual inventory system the Merchandise Inventory
account is debited for the cost of merchandise
purchased.
Question 4
2 out of 2 points
The principle of conservatism states that gains should not be
anticipated by recording them in the accounting records before they
actually occur, but that probable losses should be recognized and
recorded.
Question 5
2 out of 2 points
When prices are rising, the FIFO method produces the lowest net
income.
Question 6
2 out of 2 points

The lower-of-cost-or-market rule says that if the replacement cost of
inventory is less than the original purchase cost of that inventory, the
business should record the difference as a loss as soon as it is aware of
it.
Question 7
2 out of 2 points
Under the periodic inventory system, the merchandise inventory and
the cost of goods sold for current period are
determined
Question 8
2 out of 2 points
Cost of Goods Sold may include all of the following
EXCEPT
Question 9
2 out of 2 points

The inventory valuation system that assigns the most recent purchase
costs to the ending inventory shown on the balance sheet
is
Question 10
2 out of 2 points
The accounting principle which says that a business must
continue to use the same accounting methods unless there is strong
justification for a change is called
===============================================
VOCABULARY MATCHING -
INVENTORY

IN THE BOX PROVIDED BY EACH VOCABULARY TERM
RECORD THE LETTER OF ITS
DEFINITION
You can research these terms at the end of the chapters and in the
glossary.
Term Definition
1. Conservatism A. A method of
allocating merchandise cost based on the average cost of identical
units.
2. Consistency B. An inventory
valuation rule which requires that inventory is valued at the lower
of its cost or its
replacement price.
3. First-in, First-out (FIFO) C.
Under this system the merchandise inventory and cost of goods sold
accounts are updated
whenever merchandise is
bought or sold.

4. Gross profit D. This accounting
principle says that a business should use the same accounting
methods
from period to period.
This improves comparability of financial statements over time.
5. Last-in, First-out (LIFO) E. A
method of allocating merchandise cost in whch each unit of
inventory is
specifically identified.
6. Lower-of-cost-or-market method
F. A method of allocating merchandise cost that assumes that
the first goods purchased
are the first ones sold, and
the last goods purchased remain in inventory.
7. Periodic inventory system G.
The inventory value of goods that were sold during the accounting
period.
8. Perpetual inventory system H. A
method of allocating merchandise cost that assumes that the latest
goods purchased

are the first ones sold, and
the oldest items purchased remain in inventory.
9. Specific identification method
I. Under this system the ending inventory and cost of goods
sold are determined at the end
of the accounting period
when a physical inventory count is taken.
10. Weighted average method J.
This accounting principle says that we should never anticipate gains,
but always anticipate
and account for losses.
11. Cost of Goods Sold K. Net sales
minus cost of goods sold.
Based on Exercise E11-4A, page
426

With the periodic inventory method, the Cost of Goods Sold and
Gross Profit are calculated in the steps
explained on pages 407-408 of your text. Using those steps and this
information presented for Fluter
Hardware please answer the questions
below.
Sales………………………………………………………………..
$120,000
Sales Returns and Allowances
…………………………………….
900
Sales
Discounts…………………………………………………….
650
Merchandise Inventory, January
1………………………………….
35,000
Purchases during the
period………………………………………..
77,600
Purchases returns and allowances during the
period………………. 4,100

Purchase discounts taken during the
period…………………………
2,300
Freight-in on merchandise purchased during the
period…………… 1,250
Merchandise Inventory, December
31………………………………
32,000
1. What is the amount of net
sales?..............................
2. What is the amount of net
purchases?......................
3. What is the amount of goods available for
sale?.....
4. What is the amount of cost of goods
sold?...............

5. What is the amount of gross profit?
……………….
Sales……………………………………………………..
Less: Sales Returns and
Allowances…………………….
Less: Sales
Discounts……………………………………
1. Net
Sales………………………………………………………
Cost of Goods
Sold:
Merchandise Inventory, January
1………………………..
Purchases
…………………………………
Less: Purchase Returns and
Allowances….

Less: Purchase
Discounts………………….
2. Net
Purchases…………………………………
Add: Freight-
in…………………………………………..
&
===============================================
1. Inventory Ethics: Jason Tierro, an inventory clerk at Lexmar
Company, is responsible for taking a physical count of the goods
on hand at the end of the year. He has been performing this duty
for several years. This year Jason was very busy due to a shortage
of personnel at the company, so he decided to just estimate the

amount of ending inventory instead of doing an accurate count. He
reasoned that he could come very close to the true amount because
of this past experience working with inventory. Besides, he was
sure that the sophisticated computer program that Lexmar had just
invested in kept an accurate count of inventory on hand.
1. What is your opinion of Jason's reasoning? Why?
2. If Jason underestimates the dollar amount of ending
inventory, what effect will it have on net income for the
current accounting period?
3. Since the perpetual inventory system maintains an up-to-date
balance in the general ledger account for Merchandise
Inventory, is a physical inventory count still necessary?
Why?
2. Unearned Revenue: When a customer pays in advance for a
product or service such as a prepaid insurance policy, the business
that sold the item will record the cash received as an asset and the
future obligation to provide the item as a liability. Please give
some thought to different business situations where the customers
may pay in advance and provide an example here.
1. Using your example, which account is debited to record the
payment received? Which account is credited?
2. When the business provides the product or service, which
account is debited? Which account is credited?
3. What do we mean by the term “deferred revenue”?

4. How would these transactions be recorded under the cash
basis of accounting? What are the benefits of recording the
deferral under the accrual basis?
===============================================
AC 107 Week 7 Unit 7 Key Assessment CLO 3
Throughout this course, we have been using the accrual basis of
accounting to complete our work. However, there are two other methods
of accounting, the cash, and the modified cash bases.
For this assignment please answer each of the following questions in a
short paragraph:
1. Explain the accrual, cash, and modified cash bases of accounting.
2. Compare the methods and demonstrate the similarities, differences,
advantages, and disadvantages of each method.
3. Which method seems easiest to work with? Keep in mind not only
the ease of recording the transactions but the ease with which the
accountant can use the resulting financial information.

4. Which method(s) are approved by GAAP?
Please complete the essay on a Word document and upload it here just as
you do with your other assignments. It may be completed in a listing
format rather than APA style. Don’t forget to use complete sentences
and correct spelling and grammar. Explanations must be in your own
words.
===============================================

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