Download BAF Ch#1 Review Sheet Answers

Unit Review Sheet Answers
Chapter 1/Unit 1
Review Sheet 1/Financial Position
Answer or complete the following.
K, C 1. (a) A financial statement that lists assets, liabilities, and owner’s equity as of a specific date is
balance sheet
called a(n) _________________________________________________________________
.
assets
(b) Items of value owned by a business are called _____________________________________
.
liabilities
(c) Debts of a business are called __________________________________________________
.
owner’s equity
(d) The owner’s claim on a company’s assets is called _________________________________
.
A = L + OE
(e) The balance sheet equation is __________________________________________________
.
accounts receivable
(f) Customers who owe money to a business are called ________________________________
.
debtor
(g) Another term for accounts receivable is __________________________________________
.
A debtor is an asset
(h) Is a debtor of a company an asset or a liability? ____________________________________
.
accounts payable
(i) Companies to whom debts are owed are called ____________________________________
.
creditors
(j) Another term for accounts payable is ____________________________________________
.
A creditor is a liability
(k) Is a creditor of a company an asset or a liability? ___________________________________
.
K, A
2. Fill in the blanks.
=
Liabilities
+
Owner’s Equity
(a) $20 000
=
$5000
+
15 000
$ __________
(b) $70 000
=
40 000
$ __________
+
$30 000
70 000
(c) $ ________
=
$50 000
+
$20 000
Assets
K, A
Who? What?
3. The three lines in the heading of a balance sheet answer the questions _____________________
and When?
_____________________________________________________________________________
K, T, C
to provide information for decision making.
4. The purpose of accounting is ______________________________________________________
_____________________________________________________________________________
Copyright © 2002 Pearson Education Canada Inc., Toronto, Ontario
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Chapter 1/Unit 1
Review Sheet 1/Financial Position (cont.)
5. Explain the following terms and principles.
K, C
This is the order in which the assets listed on the balance sheet would
liquidity order: _________________________________________________________________
be converted to cash. Long-lasting assets are listed in order of useful life, with the
_____________________________________________________________________________
longest lasting listed first.
_____________________________________________________________________________
_____________________________________________________________________________
Assets are recorded at the actual cost to the business.
cost principle: __________________________________________________________________
_____________________________________________________________________________
Liabilities are listed according to the date they are due to be paid.
maturity date rule: ______________________________________________________________
_____________________________________________________________________________
6. Prepare a balance sheet for the C. Samji Co. using:
K, C, A
• accepted accounting terminology and procedures;
• the form on this review sheet;
• the following information for September 30, 20:
Cash $2000; Bank Loan $10 000; Amounts Owed by Customers $8000; Office Supplies $900;
C. Samji, Capital $105 900; Amounts Owed to Creditors $14 000; Building $200 000;
Equipment $9000; Mortgage on Building $90 000.
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Copyright © 2002 Pearson Education Canada Inc., Toronto, Ontario
Unit Review Sheet Answers
Chapter 1/Unit 2
Review Sheet 2/Business Transactions
Answer or complete the following.
At least two.
K, C 1. How many balance sheet items are affected by each transaction? _________________________
_____________________________________________________________________________
K, C 2. For each of the following transactions indicate which balance sheet items change and whether the
change is an increase or a decrease:
Cash, decrease; Office Equipment, increase.
(a) Paid cash for a new calculator.__________________________________________________
Cash, decrease; Accounts Payable, decrease.
(b) Paid cash to a creditor. ________________________________________________________
Cash, increase; Accounts Receivable, decrease.
(c) Received cash from a customer. ________________________________________________
Cash, increase; Bank Loan, increase.
(d) Borrowed cash from a bank. ___________________________________________________
Equipment, increase; Accounts Payable, increase.
(e) Bought a fax machine on credit. Office
________________________________________________
Cash, increase; Owner’s Equity,
(f) The owner invested an additional $1000 in the business. _____________________________
increase.
__________________________________________________________________________
Delivery
(g) Bought a delivery van worth $19 000; made a down payment of $3000 cash. _____________
Equipment, increase; Cash, decrease; Accounts Payable, increase.
__________________________________________________________________________
Office Equipment, decrease; Cash, increase.
(h) Sold a used typewriter for cash. _________________________________________________
Cash, decrease; Owner’s Equity, decrease.
(i) The owner withdrew cash for personal use. ________________________________________
__________________________________________________________________________
The left side total should equal the
K, C, A 3. How can the accuracy of a transaction sheet be checked? ________________________________
right side total: A = L + OE.
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
Copyright © 2002 Pearson Education Canada Inc., Toronto, Ontario
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Chapter 1/Unit 2
Review Sheet 2/Business Transactions (cont.)
4. Explain the following terms and concepts:
K, C
An event occurring during the operation of a business which results in a
transaction: ____________________________________________________________________
financial change. It always includes an exchange of things of value.
_____________________________________________________________________________
_____________________________________________________________________________
Each business is considered a separate unit. Business and
business entity concept: __________________________________________________________
personal financial data must be kept separate for accounting purposes.
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
To provide information for decision making.
the purpose of accounting: ________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
K, A, T 5. (a) Record these balances on a transaction analysis sheet for Harbour Electronics on November 1,
20--, using the form at the end of this review sheet.
Cash $2500; Accounts Receivable $6500; Building $140 000; Equipment $4000; Accounts
Payable $9000; K. Bullock, Capital $144 000.
(b) Record the following transactions on the same transaction sheet.
Nov. 2
2
3
5
Received $5000 cash from customers.
K. Bullock invested an additional $10 000 in the business.
Bought $5000 worth of equipment for cash.
Paid $6000 cash to creditors.
(c) Prepare the information for the balance sheet equation on November 5 and enter it below the
transaction analysis sheet.
(d) Prepare a balance sheet for Harbour Electronics on November 5 using the form at the end of
this review sheet.
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Copyright © 2002 Pearson Education Canada Inc., Toronto, Ontario
Chapter 1/Unit 2
Review Sheet 2/Business Transactions (cont.)
5. (a), (b), and (c)
Total of left side (Assets)
157 000
$______________________
Total of right side (Liabilities + Owner’s Equity)
157 000
$______________________
5. (d)
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