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UGBA 102A Lecture Notes - Lecture 1: Accounting Equation, Retained Earnings, Historical CostExam


Department
Business Administration Undergraduate Program
Course Code
UGBA 102A
Professor
Briginshaw
Study Guide
Final

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Kousha Modanlou
September 6, 2018
UGBA 102A
Chapter 2: Page 77-78 Q 4, 8; Page 78-79 MC 3, 7; Page 83, 88 E2-2, E2-17
Page 77-78
Q4: Accounting assumptions are necessary because they reflect the scope of accounting and the
expectations that place certain limits on the manner in which accounting information is reported.
The assumptions enable a company's financial statements to be created in a way that investors
expect and authorities require.
Q8: Debit refers to the amount being entered on the left side of the accounting equation, and
credit refers to the amount being entered on the right side of the accounting equation.
Page 78-79
MC3: A. $290,000
MC7: A. $11,000 debit balance
Page 83, 88
E2-2:
1.
a. Received: Cash (Assets)
Given: Contributed Capital (Stockholders Equity)
b. Received: Equipment (Assets)
Given: Cash (Assets)
c. No account titles are affected as there is no exchange transaction
d. Received: Equipment (Assets)
Given: Notes payable (Liabilities)
e. Received: Building (Assets)
Given: Cash (Assets)
f. Received: Intangibles (Assets)
Given: Cash (Assets)
g. Received: Retained earnings (Stockholders equity)
Given: Cash (Assets)

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h. Received: Land (Assets)
Given: Cash (Assets)
i. Received: Intangibles (Assets)
Given: Cash (Assets) and Notes Payable (Liabilities)
j. No accounts titles are affected as there is no exchange transaction
k. Received: Investment (Assets)
Given: Cash (Assets)
l. Received: Cash (Assets)
Given: Notes payable (Liabilities)
m. Received: Notes Payable (Liabilities)
Given: Cash (Assets)
2. I would record the truck in (b) for $18,000. I would record the land in (h) for $50,000. The
measurement principle I would apply is the mixed-attribute measurement model in which the
historical cost is recorded for the cash-equivalent value on the date of the transaction.
3. For (c) the accounting concept I applied was the going concern assumption. For (j) the
accounting concept I applied was the separate entity assumption.
E2-17
a. Debit Cash $40,000, Credit Common Stock $10,000, Credit Additional Paid-in
Capital $30,000
b. Debit Land $16,000, Credit Short-Term Notes Payable $16,000
c. Debit Equipment $20,000, Credit Cash $4000, Credit Long-Term Notes Payable
$16,000
d. Credit $1000 Cash, Debit $1000 Equipment
e. Credit Land $4000, Debit Short-Term Notes Receivable $4000
f. No effect
1.
+ Cash (A) -
12/31/16 0
(a) 40,000
4000 (c)
1000 (d)
35,000
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