Blog

When analyzing the changes on a spreadsheet used to prepare a statement of cash flows, the cash flows from investing activities generally affect:

Prior to recording adjusting entries at the end of an accounting period, some accounts may not show correct balances even though all transactions were properly recorded.

An adjusting entry often includes an entry to Cash.

Source documents identify and describe transactions and events entering the accounting pro­cess.

A statement of cash flows explains the differences between the beginning and ending balances of:

A company issued 5-year, 7% bonds with a par value of $100,000. The market rate when the bonds were issued was 6.5%. The company received $102,105 cash for the bonds. Using the straight-line method, the amount of recorded interest expense for the first semiannual interest period is:

Use the following information about the current year’s operations of a company to calculate the cash paid for merchandise.           Cost of goods sold $ 500,000   Merchandise inventory, January 1   85,000   Merchandise inventory, December 31   97,000   Accounts payable, January 1   68,000   Accounts payable, December 31   60,000  

The adjusting entry to reflect inventory shrinkage is a debit to Income Summary and a credit to Inventory Shrinkage Expense.

The financial statement that shows the beginning balance of retained earnings; the changes in equity that resulted from net income (or net loss); dividends; and the ending retained earnings balance, is the:

 An income statement is also called an earnings statement, a statement of operations or a profit and loss statement.