Accounting test

11. (TCO D) An account is an important accounting record where financial information is stored until needed. Briefly explain (1) the nature of an account, (2) the different types of accounts, and (3) the manner in which an account is increased and decreased, and the normal balance of each type of accounts. (Points : 30)

Question 12.12. (TCOs B and E) The adjusted trial balance of Gertz Company included the following selected accounts.                                                     

Instructions:  Use the above information to prepare a multiple-step income statement for the year ended December 31, 2010.  Calculate the profit margin ratio and gross profit rate. To qualify for full credit, you must state the formula you are using, show your computations, and explain your findings. (Points : 30)

Question 13.13. (TCOs D and E) Please prepare the following journal entries. Indicate which account should be debited and which account should be credited, along with the dollar amount of the debit and credit. Investors invest $50,000 in exchange for 1,000 shares of common stock. Company purchased equipment for $10,000 on credit. Company received $5,000 for services performed. Company made payment on account for $2,000. Company received $7,000 for services not yet performed. (Points : 30)

Question 14.14. (TCO D) Your friend Wendy plans to open a hair salon. Wendy states that she does not have time to develop and implement a system of internal controls. Explain to Wendy the objectives of a system of internal control. Explain to Wendy at least four key controls she must establish to protect herself against fraud. You should state specific internal control procedures and relate your answer to her hair salon business. (Points : 30)