Help With Accounting Questions?! Please...?

Question

1.) When reviewing a tax return prepared on a cash basis, which of the following accounts would NOT appear on the balance sheet.

a.Fixed Assets

b.Long-Term Debt

c.Trade Accounts Receivable

d.Retained Earnings

2.) Organize the following asset accounts according to proper financial statement presentation with #1 being first and #4 last:

#__ Fixed Assets

#___ Goodwill

#___ Cash

#____ Accounts Receivable

3.) Inventory was presented on the balance sheet of a company as $500,000. Upon sale of the company inventory was found to actually be $400,000. What effect would this have had on the income statement?

a. Increase in income of $100,000.

b. Decrease in income of $100,000.

c. Increase in income of $50,000.

d. No effect

Answer 1

It's beena long time since I took accountng, but I believe these are the correct answers:

Accounts settled on a cash basis have no Accounts Receivable becuase the accout is paid in cash as soon as the service/product is delivered.

#1 Cash, #2 Fixed Assets, #3 A/R, #4 Good will

Generally the most 'fluid' asset is listed first.

It would have no effect on the Income Statement.  The missing inventory would affect the Balance Sheet.

Answer 2

C, you do not have recivables when you are cash based.

2Cash, AR, FA Goodwill

3 i think it would be D

Answer 3

1. C Trade Accounts Receivable

2. Cash, Fixed Assets, Accounts Receivable, Goodwill

3. D, No effect