Mba/629 Week 1
MBA 629
Accounting and Financial Management
Agenda for Class 2 June 9, 2006
Review of chapter 1 and questions
Practice quiz questions:
1. The Melville Company sold land for $60,000 in cash. The land was originally purchased for $40,000, and at the time of the sale, $15,000 was still owed to First National Bank on that purchase. After the sale, The Melville Company paid off the loan to First National Bank. What is the effect of the sale and the payoff of the loan on the accounting equation?
a. assets increase $20,000; liabilities decrease $15,000; owner's equity increases $5,000
b. assets increase $5,000; liabilities decrease $15,000; owner's equity increases $20,000
c. assets increase $60,000; liabilities decrease $15,000; …show more content…
assets increase $20,000; liabilities decrease $15,000; owner's equity increases $35,000
2. The total assets and the total liabilities of a business at the beginning and at the end of the year appear below. During the year, the owner had withdrawn $50,000 for personal use and had made an additional investment of $35,000 in the business.
Assets Liabilities
Beginning of year $295,000 $190,000
End of year 355,000 220,000
The amount of net income for the year was
a. $85,000
b. $40,000
c. $135,000
d. $45,000
3. If beginning capital was $65,000, ending capital is $43,000, and the owner's withdrawals were $16,000, the amount of net income or net loss was
a. net income of $37,000
b. net income of $8,000
c. net loss of $22,000
d. net loss of $6,000
4. If total liabilities decreased by $25,000 during a period of time and owner's equity increased by $30,000 during the same period, the amount and direction (increase or decrease) of the period's change in total assets is
a. $65,000 increase
b. $5,000 decrease
c. $5,000 increase
d. $65,000 decrease
Chapter …show more content…
And, quite frankly, if students fail to grasp the concepts in this chapter, the first seeds of destruction will be sown for those students who will ultimately withdraw from or fail the course.
Emphasize that Chapter 2 builds the foundation for all that will be learned about accounting principles. Unlike many other college courses, it is impossible to understand Chapter 3 and beyond if the principles of Chapter 2 are not mastered. You need to dispel the false belief that "maybe I'll get the next chaptereven though I'm totally lost now."
Also encourage your students to seek help immediately if they begin to struggle.
Accounting and Financial Management
Agenda for Class 2 June 9, 2006
Review of chapter 1 and questions
Practice quiz questions:
1. The Melville Company sold land for $60,000 in cash. The land was originally purchased for $40,000, and at the time of the sale, $15,000 was still owed to First National Bank on that purchase. After the sale, The Melville Company paid off the loan to First National Bank. What is the effect of the sale and the payoff of the loan on the accounting equation?
a. assets increase $20,000; liabilities decrease $15,000; owner's equity increases $5,000
b. assets increase $5,000; liabilities decrease $15,000; owner's equity increases $20,000
c. assets increase $60,000; liabilities decrease $15,000; …show more content…
assets increase $20,000; liabilities decrease $15,000; owner's equity increases $35,000
2. The total assets and the total liabilities of a business at the beginning and at the end of the year appear below. During the year, the owner had withdrawn $50,000 for personal use and had made an additional investment of $35,000 in the business.
Assets Liabilities
Beginning of year $295,000 $190,000
End of year 355,000 220,000
The amount of net income for the year was
a. $85,000
b. $40,000
c. $135,000
d. $45,000
3. If beginning capital was $65,000, ending capital is $43,000, and the owner's withdrawals were $16,000, the amount of net income or net loss was
a. net income of $37,000
b. net income of $8,000
c. net loss of $22,000
d. net loss of $6,000
4. If total liabilities decreased by $25,000 during a period of time and owner's equity increased by $30,000 during the same period, the amount and direction (increase or decrease) of the period's change in total assets is
a. $65,000 increase
b. $5,000 decrease
c. $5,000 increase
d. $65,000 decrease
Chapter …show more content…
And, quite frankly, if students fail to grasp the concepts in this chapter, the first seeds of destruction will be sown for those students who will ultimately withdraw from or fail the course.
Emphasize that Chapter 2 builds the foundation for all that will be learned about accounting principles. Unlike many other college courses, it is impossible to understand Chapter 3 and beyond if the principles of Chapter 2 are not mastered. You need to dispel the false belief that "maybe I'll get the next chaptereven though I'm totally lost now."
Also encourage your students to seek help immediately if they begin to struggle.