FINANCIAL ACCOUNTING AND REPORTING

CHAPTER 1
Problem 1: True or False
1. True
2. True
3. True
4. True
5. True
6. True
7. True
8. False
9. False
10. True

Problem 2: True of False

1. True
2. False
3. False
4. True
5. True
6. False
7. True
8. False
9. False
10. True

Problem 3: For Classroom discussion

1. D.
2. D.
3. A.
4. C.
5. C.
6. C.
7. C.
8. C.
9. D.
10. A.

Problem 4: Multiple Choice

1. D.
2. A.
3. B.
4. C.
5. D.
6. A.
7. C.
8. A.
9. C.
10. D.

Problem 5: Multiple Choice

1. A.
2. B.
3. B.
4. B.
5. A.
6. A.
7. D.
8. A.
9. D.
10. A.
CHAPTER 2
Problem 1: True or False
1. True
2. True
3. True
4. False
5. True
6. False
7. False
8. True
9. False
10. True

Problem 2: True or False

1. False
2, False
3. True
4. False
5. True
6. False
7. True
8. False
9. True
10. True

Problem 3: For Classroom Discussion

1. A.
2. B.
3. A.
4. A
5. A.
6. B.
7. C.
8. D.
9. C.
10. B.
11. C.

Problem 4: Multiple Choice

1. D.
2. C.
3. A.
4. A.
5. C.
6. C.
7. B.
8. C.
9. B.
10. A.

Problem 5: Multiple Choice

1. B.
2. D.
3. C.
4. A.
5. B.
6. C.
7. A.
8. B.
9. C.
10. D.
CHAPTER 3
Problem 1: True or False
1. True
2. False
3. False
4. False
5. False
6. True
7. True
8. True
9. False
10. True

Problem 2: True or False

1. True
2. True
3. True
4. True
5. False
6. True
7. True
8. True
9. False
10. False

Problem 3: True or False

1. True
2. False
3. True
4. False
5. True
6. True
7. True
8. True
9. False
10. False

Problem 4: For Classroom Discussion

1. D
2. D.
3. D.
4. D.
5. D.
6. D.
7. B.
8. A.
9. C.
10. B.

Problem 5: Computations
1. 270,000 - equity
2. 160,000 - liabilities
3. 1,120,000 - assets
4. 610,000 - liabilities
5. 240,000 - equity

Problem 6: Computations
1. 490,000 - equity
2. 720,000 - liabilities
3. 1,060,000 - assets
4. 1,060,000 - liabilities
5. 1,030,000 - equity

Problem 7: Computationss- Expanded Equation

1. 130,000
2. 350,000
3. 360,000
4. 160,000
5. 870,000

Problem 8: Computations- Expanded Equation

1. 520,000
2. 470,000
3. 240,000
4. 530,000
5. 2420,000

Problem 9: Computation- Accouting Equation

1. Asset- 20
Equity- 20
2. Asset- 500
Liability- 500
3. Asset- 2,000
Equity- 2,000
4. Asset- 800
Equity- 800
5. ASSETS- 3,320
LIABILITIES- 500
EQUITY- 2,820
Problem 10: Multiple Choice
1. A.
2. C.
3. D.
4. D.
5. D.
6. C.
7. B.
8. C.
9. D.
10. B.

Problem 11: Multiple Choice

1. D.
2. D.
3. B.
4. A.
5. B.
6. B.
7. C.
8. C.
9. D.
10. A.

Problem 12: Multiple Choice

1. A.
2. B.
3. A.
4. A.
5. C.
6. A.
7. B.
8. C.
9. B.
10. A.

Problem 13: Multiple Choice

1. B.
2. A.
3. D.
4. C.
5. A.
6. A.
7. A.
8. C.
9. C.
10. A.

Problem 14: Multiple Choice

1. A.
2. A.
3. C.
4. C.
5. C.
6. B.
7. A.
8. D.
9. C.
10. C.
CHAPTER 4
Problem 1: True or False
1. False
2. True
3. True
4. True
5. False
6. True
7. True
8. False
9. True
10. False

Problem 2: True or False

1. True
2. True
3. False
4. True
5. True
6. False
7. True
8. True
9. False
10. True

Problem 3: For Classroom Discussion

1. D.
2. D.
3. D.
4. C.
5. B.
6. A.
7. B.
8. A.
9. C.
10. B.

Problem 4: Identification
1. Asset
2. Expense
3. Asset
4. Liability
5. Expense
6. Equity
7. Income
8. Asset
9. Income
10. Asset
11. Expense
12. Liability
13. Freight-out
14. Income
15. Liability

Problem 5: Identification
1. Expense
2. Asset
3. Expense
4. Expense
5. Asset
6. Asset
7. Liability
8. Asset
9. Asset
10. Expense
11. Asset
12. Liability
13. Income
14. Asset
15. Asset

Problem 6: Identification
1. Income
2. Accounts Receivable
3. Inventory
4. Advertising Expense
5. Balance sheet
6. Bad Debt Expense
7. Sales
8. Cost of Goods Sold
9. Supplies Expense
10. Notes Payable

Problem 7: Identification
1. Income Statement
2. Freight-out
3. Accounts Payable
4. Prepaid Supplies
5. Unearned Income
6. Miscellaneous Expense
7. Utilities Expense
8. Bad Debt Expense
9. Depreciation Expense
10. Accumulated Depreciation

Problem 8: Multiple Choice

1. D.
2. D.
3. A.
4. B.
5. A.
6. B.
7. A.
8. C.
9. A.
10. D.

Problem 9: Multiple Choice

1. A.
2. D.
3. A.
4. A.
5. B.
6. A.
7. B.
8. A.
9. B.
10. A.

Problem 10: Multiple Choice

1. C.
2. B.
3. A.
4. B.
5. D.
6. C.
7. D.
8. B.
9. D.
10.D.

Problem 11: Multiple Choice

1. B.
2. D.
3. C.
4. A.
5. B.
6. B.
7. C.
8. B.
9. A.
10. C.
CHAPTER 5
Problem 1: True or False
1. False
2. False
3. True
4. True
5. True
6. True
7. True
8. True
9. False
10. False

Problem 2: True or False

1. True
2. True
3. False
4. False
5. False
6. False
7. False
8. False
9. False
10. False

Problem 3: For Classroom Discussion

1. Purchase journal
2. Cash receipts journal
3. Purchase journal
4. Cash disbursements journal
5. Subsidiary Ledger
6. Subsidiary Ledger
7. Asset- Debit
8. Equity- Credit
9. Asset- Debit
10. Asset- Debit
11. Liability- Credit
12. Liability- Credit
13. Contra Asset- Credit
14. Income- Credit
15. Expense- Debit
16. Expense- Debit
17. Debit
18. Credit
19. Credit
20. Credit
21, Cash- 17,000
Notes Payable- 12,000

Problem 4:
1. Sales Journal
2. Purchase Journal
3. Cash Receipts Journal
4. Cash Disbursement Journal
5. Cash Disbursement Journal
6. Cash Receipts Journal
7. Cash Disbursement Journal
8. General Ledger
9. Subsidiary Ledger
10. General Journal

Problem 5: Identification (Types of Accounts)

1. Asset- Debit
2. Expense- Debit
3. Equity- Debit
4. Asset- Debit
5. Income- Credit
6. Liability- Credit
7. Income- Credit
8. Expense- Debit
9. Liability- Credit
10. Asset- Debit
11. Asset- Debit
12. Equity- Credit
13. Asset- Debit
14. Expense- Debit
15. Expense- Debit
16. Income- Credit
17. Contra Asset- Credit
18. Asset- Debit
19. Expense- Debit
20. Liability- Credit

Problem 6: Identification (Rules of Debit/Credit)

1. Debit
2. Credit
3. Credit
4. Debit
5. Debit
6. Credit
7. Debit
8. Credit
9. Debit
10. Debit
11. Debit
12. Debit
13. Credit
14. Credit
15. Credit
16. Debit
17. Credit
18. Debit
19. Debit
20. Credit
21. Debit
22. Debit
23. Debit
24. Debit
25. Credit

Problem 7: Multiple Choicee

1. D.
2. B.
3. A.
4. B.
5. A.
6. B.
7. A.
8. D.
9. A.
10. D.

Problem 8: Multiple Choice

1. D.
2. D.
3. A.
4. A.
5. A.
6. A.
7. B.
8. A.
9. C.
10. D.

Problem 9: Multiple Choice

1. A.
2. A.
3. C.
4. D.
5. D.
6. B.
7. C.
8. B.
9. A.
10. B.

Problem 10: Multiple Choice

1. C.
2. C.
3. B.
4. B.
5. A.
6. D.
7. A.
8. C.
9. C.
10. C.
CHAPTER 6
Problem 1: True or False
1. True
2. True
3. False
4. True
5. False
6. True
7. False
8. True
9. False
10. True

Problem 2: For Classroom Discussion

1. A.
2. A.
3. D.
4. D.
5. B.
6. Oct. 1 Cash 800,000
Owner's Capital 800,000
Oct.3 Inventory 100,000
Cash 100,000
Oct. 4 Inventory 400,000
Accounts Payable 400,000
Oct. 8 Cash 300,000
Sales 300,000
Cost of Goods Sold 120,000
Inventory 120,000
Oct. 12 Accounts Receivable 700,000
Sales 700,000
Cost of Goods Sold 280,000
Inventory 280,000
Oct. 15 Accounts Payable 400,000
Cash 400,000
Oct. 17 Cash 700,000
Accounts Receivable 700,000
Oct. 18 Equipment 280,000
Cash 280,000
Oct. 22 Owner's Drawing 20,000
Cash 20,000
Oct. 31 Salaries Expense 50,000
Cash 50,000

Problem 3: Identifying the Accounts Affected

1. Cash | Owner's Capital
2. Equipment | Cash
3. Cash | Sales
4. Cost of Goods Sold | Inventory
5. Inventory | Cash
6. Utilities Expense | Cash
7. Inventory | Cash
8. Miscellanous Expense | Cash
9. Tax Expense | Cash
10. Transportation Expense | Cash

Problem 4: Identifying the accounts affected

1. Cash- Increase
Owner's Capital- Increase
2. Inventory- Increase
Cash- Decrease
3. Cash- Increase
Sales- Increase
Cost of Goods Sold- Decrease
Inventory- Decrease
4. Equipment- Increase
Cash- Decrease
5. Interest Expense- Decrease
Cash- Decrease

Problem 6: Identifying the effects on accounts

1. Owner'S Drawings- Decrease
Cash- Decrease
2. Accounts Receivable- Increase
Sales- Increase
Cost of Goods Sold- Decrease
Inventory- Decrease
3. Cash- Increase
Accounts Receivable- Decrease
4. Cash- Increase
Notes Payable- Increase
5. Notes Payable- Decrease
Cash- Decrease
6. Salaries Expense- Decrease
Cash- Decrease
7. Inventory- Increase
Accounts Payable- Increase
8. Accounts Payable- Decrease
Cash- Decrease
9. Miscellaneous Expense- Decrease
 Cash- Decrease
10. Non-accountable event

Problem 7: Journal Entries

1. cash 100,000
owner's capital 100,000
2. cash 800,000
notes payable 800,000
3. equipment 200,000
cash 200,000
4. inventory 500,000
cash 50,000
5. cost of goods sold 50,000
inventory 50,000
cash 120,000
sales 120,000
6. prepaid rent 60,000
cash 60,000
7. notes payable 400,000
cash 400,000
8. interest expense 80,000
cash 80,000
9. utilities expense 10,000
cash 10,000
10. salaries expense 32,000
cash 32,000

Problem 8: Journal entries

1. cash 1,000,000
owners capital 1,000,000
2. license fees 30,000
cash 30,000
3. advertising expense 200,000
cash 200,000
4. Inventory 600,000
accounts payable 600,000
5. cash 800,000
sales 800,000
cost of goods sold 500,000
inventory 500,000
6. cash 700,000
accounts receivable 700,000
7. accounts payable 300,000
cash 300,000
8. rent expense 70,000
 cash 70,000
9. utilities expense 8,000
cash 8,000
10. owner's drawing 20,000
cash 20,000

Problem 9: Journal entries and accounting equation

1. cash 100,000
owner's capital 100,000
2. taxes and licenses 10,000
cash 10,000
3. advertising expense 20,000
cash 20,000
4. prepaid supplies 1,000
cash 1,000
5. inventory 40,000
cash 40,000
6. accounts receivable 70,000
sales 70,000
cost of goods sold 40,000
inventory 40,000
7. delivery expense 10,000
cash 10,000
8. cash 50,000
accounts receivable 50,000
9. salaries expense 8,000
cash 8,000
10. utilities expense 12,000
cash 12,000

Problem 10: Journal Entries and Accounting Equation

1. cash 200,000
owner's capital 200,000
2. cash 600,000
notes payable 600,000
3. equipment 450,000
cash 450,000
4. prepaid rent 20,000
cash 20,000
5. inventory 500,000
accounts payable 500,000
6. cash 200,000
sales 200,000
7. cost of goods sold 80,000
inventory 80,000
 accounts receivable 900,000
sales 900,000
8. accounts payable 400,000
cash 400,000
9. owner's drawing 400,000
cash 10,000
10. interest expense 15,000
cash 15,000

Problem 11: Journal Entries

1. cash 35,000
owner's capital 35,000
2. supplies expense 15,000
cash 15,000
3. Rent Expense 5,000
cash 5,000
4. Utilities expense 2,000
cash 2,000
5. cash 10,000
notes payable 10,000
6. accounts receivable 75,000
service revenue 75,000
7. Interest expense 500
cash 500
8. cash 50,000
accounts receivable 50,000
9. owner's drawing 20,000
cash 20,000
10. Salaries expense 10,000
cash 10,000

Problem 12: Multiple Choice

1. C.
2. B.
3. D.
4. B.
5. D.
6. B.
7. C.
8. A.
9. A.
10. D.

Random Problems
1. Equipment 50,000
 cash 15,000
accounts payable 35,000
2. Supplies 3,000
accounts payable 2,700
sales discount 300
3. cash 50,000
equipment 20,000
owner's capital 70,000
4. Outstanding Expense 10,000
cash 10,000
5. Merchandise inventory 60,000
accounts payable 60,000
Accounts payable 50,000
purchase returns and allowances 50,000
CHAPTER 7 Cash 600,000
Problem 1 to 9 Mr. Uhtred, Capital 600,000

Problem 10: Multiple Choice Cash 400,000

1. B. Notes Payable 400,000
2. B.
3. B. Merchandise Inventory 200,000
4. D. Cash 200,000
5. D.
6. D. Merchanise Inventory 500,000
7. B. Accounts Payable 500,000
8. D.
9. C. Accounts Receivable 900,000
10. D. Sales 900,000

Cost of Goods Sold 400,000

Merchandise Inventory 400,000

Accounts Payable 400,000

Cash 400,000

Cash 500,000
Accounts Receivable 500,000

Equipment 480,000
Cash 480,000

Mr. Uhtred, Drawing 10,000

Cash 10,000

Interest Expense 5,000

Cash 5,000
 Cash Accounts Receivable Merchandise Inventory Equipment
600,000 200,000 900,000 500,000 200,000 400,000 480,000
400,000 400,000 400,000 500,000
500,000 480,000 700,000 400,000
10,000 300,000
5,000
1,500,000 1,095,000
405,000

Notes Payable Mr. Uhtred, Capital Mr. Uhtred, Drawing Sales

400,000 600,000 10,000

Interest Expense
5,000 Bebbanburg Merchandising
Unadjusted Trial Balance
December 31, 2021
Debit Credit
Cash 405,000
Accounts Receivable 400,000
Merchandise Inventory 300,000
Equipment 480,000
Accounts Payable 100,000
Notes Payable 400,000
Mr. Uhtred, Capital 600,000
Mr. Uhtred, Drawing 10,000
Sales 900,000
Cost of Goods Sold 400,000
Interest Expense 5,000
2,000,000 2,000,000
Equipment Accounts Payable
400,000 500,000
100,000

Sales Cost of Goods Sold

900,000 400,000
CHAPTER 8 PROBLEMS 2 TO 5 :)))
Problem 1: True or False 1. Interest Expense 31,500
1. False Interest Payable 31,500
2. False
3. True 2. Utilities Expense 32,000
4. True Utilities Payable 32,000
5. False
6. False 3. Rent Expense 22,000
7. True Rent Payable 22,000
8. True
9. False 4. Rent Receivable 8,000
10. True Rent Income 8,000

5. Bad Debt Expense 20,000

Allowance for Doubtful Accounts 20,000
Problem 6: Multiple Choice
1. C. 6. Depreciation Expense 500,000
2. D. Accumulated Depreciation 500,000
3. C.
4. C.
5. B.
6. D.
7. D. Problem 5: Adjusting Entries
8. A. 1. Salaries Expense 11,250
9. D. Salaries Payable 11,250
10. B.
2. Interest Receivable 41,666.67
Problem 7: Multiple Choice Interest Income 41,666.67
1. D.
2. A. 3. Interest Expense 28,000
3. D. Interest Payable 28,000
4. D.
5. B. 4. Service Change Expense 13,000
6. B. Cash 13,000
7. D.
8. A. 5. Depreciation Expense 240,000
9. A. Accumulated Depreciation 240,000
10
7. Office Supplies 8,000
Supplies Expense 8,000

6. Office Supplies Expense 26,000

Prepaid Supplies 26,000

8. Bad Debt Expense 10,200

Allowance for Doubtful Account 10,200
 Liability Method
7. Cash 720,000
Unearned Income 720,000
Dec. 31 Unearned Income 560,000
Royalty Income 560,000
Asset Method
8. Prepaid Insurance 360,000
Cash 360,000
ccounts 20,000
Dec. 31 Insurance Expense 60,000
Prepaid Insurance 60,000
Income Method
Cash 720,000
Royalty Income 720,000
Royalty Income 160,000
Unearned Income 160,000
Liability Method
Insurance Expense 360,000
Cash 360,000
Prepaid Insurance 300,000
Insurance Expense 300,000
Cash 200,000 Cash Equipment
Manly, Capital 200,000 200,000 60,000 180,000
100,000 180,000
Cash 100,000 220,000 50,000
Notes Payable 100,000 40,000
520,000 330,000
Rent Expense 60,000 190,000
Cash 60,000

Equipment 180,000 Manly, Drawing Service Revenue

Cash 180,000 40,000

Supplies Expense 50,000

Cash 50,000

Cash 220,000
Service Revenue 220,000
Brunah's Salon
Manly, Drawing 40,000 Trial Balance
Cash 40,000 December 31,20x1
Accounts Debits Credits
Cash 190,000
Equipment 180,000
Notes Payable 100,000
Manly, Capital 200,000
Manly, Drawing 40,000
Service Revenue 220,000
Rent Expense 60,000
Supplies Expense 50,000
520,000 520,000
 Notes Payable Manly, Capital
100,000 200,000

Service Revenue Rent Expense Supplies Expense

220,000 60,000 50,000

Adjusting Entries
1 Utilities Expense 3,000
Utilities Payable 3,000

5 Prepaid Supplies 20,000

Supplies Expense 20,000

2 Interest Expense 1,000

Interest Payable 1,000

4 Prepaid Rent 50,000

Rent Expense 50,000

3 Depreciation Expense 3,000

Accumulated Depreciation 3,000
 Brunah's Salon
Worksheet
For the month ended December 31, 20x1
AccountsUnadjusted Trial Balance Adjustments Adjusted Trial Balance Income Statement Balance Sheet
Cash 190,000 190,000 190,000
Equipment 180,000 180,000 180,000
Notes Payable 100,000 100,000
Manly, Capital 200,000 200,000
Manly, Dra 40,000 40,000 40,000
Service Revenue 220,000 220,000 220,000
Rent Expen 60,000 50,000 10,000 10,000
Supplies E 50,000 20,000 30,000 30,000
Totals 520,000 520,000

Utilities Expense 3,000 3,000 3,000

Utilities Payable 3,000 3,000
Interest Expense 1,000 1,000 1,000
Interest Payable 1,000 1,000
Depreciation Expense 3,000 3,000 3,000
Accumulated Depreciation 3,000 3,000
Prepaid Rent 50,000 50,000 50,000
Prepaid Supplies 20,000 20,000 20,000
77,000 77,000 527,000 527,000 47,000 220,000 480,000
Net Income 173,000
220,000 220,000 480,000
Balance Sheet

100,000
200,000

3,000

1,000

3,000

307,000
173,000
480,000