1) Soo Lin began an Internet Consulting practice and completed these transactions
during April of the current year:
Show the effects of the above transactions on the accounting equation of Soo Lin,
Consultant. Use the following format for your answers. The first item is shown as an
example.
Increase = I Decrease = D No effect = N
2) An employee devises a payroll scheme that costs the employer $150. The employer
discovers the fraud but decides not to confront the employee since the amount of the
fraud is small. Discuss why this course of action is not advisable.
3) A _______________________ contains relevant information that compares actual
results to planned activities.
4) Groundworks Company budgeted the following credit sales during the current year:
September, $90,000; October, $123,000; November, $105,000; December, $111,000.
Experience has shown that cash from credit sales is received as follows: 10% in the
month of sale, 50% in the first month after sale, 35% in the second month after sale,
and 5% is uncollectible. How much cash should Groundworks Company expect to
collect in November from all current and past credit sales?
5) Stock that has been issued and is held by stockholders is ___________________
stock.
6) Jerry’s Butcher Shop had the following assets and liabilities at the beginning and end
of the current year:
If Jerry made no investments in the business but withdrew $5,000 during the year, what
was the amount of net income earned by Jerry’s Butcher Shop?
7) On October 1 of the current year a corporation issued (sold) $1,000,000 of its 12%
bonds at par plus accrued interest. The bonds were dated July 1 of this year. What
amount of bond interest expense should the company report on its current year income
statement?
8) Match the following terms with the appropriate definition.