Chapter02 test bank
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Chapter02 test bank

Course Number: ACCT 2113, Spring 2013

College/University: The University of Oklahoma

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Chapter 002 The Accounting Information System True / False Questions 1. External transactions are transactions the firm conducts with a separate economic entity, such as selling products to a customer, purchasing supplies from a vendor, paying salaries to an employee, and borrowing money from a bank. True False 2. Internal transactions are events that affect the financial position of the company but do not...

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002 Chapter The Accounting Information System True / False Questions 1. External transactions are transactions the firm conducts with a separate economic entity, such as selling products to a customer, purchasing supplies from a vendor, paying salaries to an employee, and borrowing money from a bank. True False 2. Internal transactions are events that affect the financial position of the company but do not include an exchange with a separate economic entity. Examples are using supplies on hand and earning revenues after having received cash in advance from a customer. True False 3. A list of all account names used to record transactions of a company is referred to as a Taccount. True False 4. After recording each transaction, total assets must equal total liabilities plus stockholders' equity. True False 5. If a transaction causes total assets of the company to increase by $2,000, then liabilities plus stockholders' equity also increases by $2,000. True False 6. If a transaction causes total assets of the company to increase by $5,000 and total liabilities to increase by $3,000, then stockholders' equity increases by $8,000. True False 7. Borrowing cash from the bank causes assets to increase and liabilities to increase. True False 2-1 Chapter 002 The Accounting Information System 8. Purchasing equipment using cash causes assets to increase. True False 9. Providing services to customers for cash causes stockholders' equity to increase. True False 10. Incurring employees' salaries but not paying them causes no change to stockholders' equity. True False 11. Paying dividends to its stockholders causes a company's stockholders' equity to decrease. True False 12. Selling common stock for cash causes assets to increase and stockholders' equity to decrease. True False 13. Purchasing office supplies on account causes assets to increase and liabilities to increase. True False 14. Providing services to customers on account causes assets to increase and stockholders' equity to increase. True False 15. Receiving cash in advance from a customer for services to be provided in the future causes assets to increase and stockholders' equity to increase. True False 2-2 Chapter 002 The Accounting Information System 16. Paying for one year of rent in advance does not affect the accounting equation. True False 17. Purchasing supplies on account increases the balance of the accounts receivable account. True False 18. Amounts owed from customers are recorded in the accounts receivable account. True False 19. The two components of stockholders' equity are debits and credits. True False 20. Revenues have the effect of increasing retained earnings. True False 21. Expenses have the effect of decreasing retained earnings. True False 22. Receiving cash in advance from customers increases the service revenue account. True False 23. Unearned revenue is a liability account. True False 24. Liability accounts increase with a debit and decrease with a credit. True False 2-3 Chapter 002 The Accounting Information System 25. Liability accounts increase with a credit and decrease with a debit. True False 26. Common stock increases with a credit and decreases with a debit. True False 27. Revenue accounts increase with a debit and decrease with a credit. True False 28. Expense accounts increase with a debit and decrease with a credit. True False 29. The dividends account increases with a credit and decreases with a debit. True False 30. A debit to an account balance always results in the balance increasing. True False 31. A credit to an account balance always results in the balance decreasing. True False 32. A journal provides a chronological record of all transactions affecting a firm. True False 33. For each transaction, there must be at least one debit amount and one credit amount. True False 2-4 Chapter 002 The Accounting Information System 34. For each transaction, the total debit amounts must equal the total credit amounts. True False 35. Selling common stock for cash is recorded with a debit to common stock. True False 36. Borrowing cash from the bank is recorded with a debit to cash. True False 37. Purchasing office supplies is recorded with a credit to office supplies. True False 38. Paying employees' salaries for the current period is recorded with a debit to salaries expense. True False 39. Providing services to customers is recorded with a debit to service revenue. True False 40. The general ledger includes all accounts used to record the company's transactions. True False 41. The process of transferring the debit and credit information from the journal to individual accounts in the general ledger is called journalizing. True False 2-5 Chapter 002 The Accounting Information System 42. After we've posted transactions to the general ledger accounts, the sum of the accounts with debit balances should equal the sum of the accounts with credit balances. True False 43. A trial balance is a list of all accounts and their balances at a particular date, showing that assets equal liabilities. True False 44. If total debits equal total credits in the trial balance, then all balances are necessarily correct. True False Multiple Choice Questions 45. Which of the following is not part of measuring external transactions? A. Using source documents to analyze accounts affected. B. Recording transactions. C. Making payments on all amounts owed. D. Analyzing transactions for their effect on the accounting equation. 46. External events include all of the following except: A. Paying employees' salaries. B. Purchasing equipment. C. Using office supplies. D. Collecting an account receivable. 2-6 Chapter 002 The Accounting Information System 47. For each transaction recorded in an accounting system, the basic equation that must be maintained at all times is: A. Assets = Liabilities + Stockholders' Equity. B. Cash Increases = Cash Decreases. C. Revenues = Expenses + Dividends. D. Assets = Liabilities. 48. The following amounts are reported in the ledger of Mariah Company: What is the balance in the common stock account? A. $44,000. B. $32,000. C. $48,000. D. $42,000. 49. When a company incurs workers' salaries but does not pay them, how will the basic accounting equation be affected? A. Stockholders' equity decreases. B. Revenues decrease. C. Expenses decrease. D. Liabilities decrease. 50. When cash payments are made to stockholders, what is the effect on the company's accounts? A. Cash decreases and dividends increase. B. Cash increases and dividends decrease. C. Cash decreases and common stock decreases. D. Cash increases and common stock increases. 2-7 Chapter 002 The Accounting Information System 51. Which of the following is not an asset account? A. Office supplies. B. Accounts payable. C. Equipment. D. Accounts receivable. 52. An account receivable can best be defined as: A. A payment to the owners. B. A sale of goods and services. C. A resource owned by the company. D. An amount owed by the company. 53. Receiving assets from customers before services are performed results in: A. Prepaid assets. B. Service revenue. C. Unearned revenues. D. Accounts receivable. 54. When the company pays stockholders a dividend, what is the effect on the accounting equation for that company? A. Decrease stockholders' equity and increase assets. B. Increase liabilities and increase assets. C. Decrease assets and decrease liabilities. D. Decrease assets and decrease stockholders' equity. 55. Pumpkin Inc. sold $500 in pumpkins to a customer on account on January 1. On January 11 Pumpkin collected the cash from that customer. What is the impact on Pumpkin's accounting equation from the collection of cash? A. No net effect to the accounting equation. B. Decrease assets and increase liabilities. C. Increase assets and increase liabilities. D. Decrease assets and decrease liabilities. 2-8 Chapter 002 The Accounting Information System 56. A company receives a $50,000 cash deposit from a customer on October 15 but will not provide services until November 20. Which of the following statements is true? A. The company records service revenue on October 15. B. The company records cash collection November 20. C. The company records an unearned revenue on October 15. D. The company records nothing on October 15. 57. Which of the following would increase assets and increase liabilities? A. Provide services to customers on account. B. Purchase office supplies on account. C. Pay dividends to stockholders. D. Received a utility bill but do not pay for it. 58. Receiving cash from an account receivable: A. Increases a revenue and decreases an asset. B. Decreases a liability and increases an asset. C. Increases an asset and increases a revenue. D. Increases one asset and decreases another asset. 59. An expense has what effect on the accounting equation? A. Decrease liabilities. B. Decrease stockholders' equity. C. Increase assets. D. No effect. 60. A revenue has what effect on the accounting equation? A. Increase liabilities. B. Decrease assets. C. Increase stockholders' equity. D. No effect. 2-9 Chapter 002 The Accounting Information System 61. Investments by stockholders have what effect on the accounting equation? A. Assets increase and liabilities increase. B. Expenses increase and liabilities increase. C. Assets increase and revenues increase. D. Assets increase and stockholders' equity increases. 62. Which of the following is not possible when recording a transaction? A. Liabilities increase and assets decrease. B. Stockholders' equity increases and assets increase. C. One asset increases and another asset decreases. D. Stockholders' equity decreases and assets decrease. 63. Amounts owed to suppliers for supplies purchased on account are defined as: A. Cash. B. Accounts receivable. C. Accounts payable. D. Supplies expense. 64. Purchasing office supplies on account will: A. Not change assets. B. Increase assets and decrease liabilities. C. Increase assets and increase liabilities. D. Increase assets and increase stockholders' equity. 65. Providing services and receiving cash will: A. Increase assets and increase stockholders' equity. B. Increase assets and increase liabilities. C. Decrease assets and increase liabilities. D. Decrease liabilities and increase stockholders' equity. 2-10 Chapter 002 The Accounting Information System 66. When a company provides services on account, the accounting equation would be affected as follows: A. Assets increase. B. Revenues increase. C. Assets increase and liabilities decrease. D. Assets increase and stockholders' equity increases. 67. If a company provides services on account, which of the following is true? A. Expenses increase. B. Liabilities increase. C. Stockholders' equity increases. D. Assets decrease. 68. When a payment is made on an account payable: A. Assets and stockholders' equity decrease. B. Assets and liabilities decrease. C. Liabilities and revenues decrease. D. Assets and expenses decrease. 69. Purchasing office equipment on account has what impact on the accounting equation? A. Stockholders' equity decreases and assets increase. B. Liabilities increase and assets increase. C. Assets decrease and liabilities decrease. D. Assets increase and stockholders' equity increases. 70. Purchasing supplies for cash has what effect on the accounting equation? A. Increase assets. B. Decrease stockholders' equity. C. Decrease liabilities. D. No effect. 2-11 Chapter 002 The Accounting Information System 71. The unearned revenue account is shown in which statement? A. Income statement. B. Statement of cash flows. C. Balance sheet. D. Statement of stockholders' equity. 72. On January 1 Brad Inc. sold $30,000 in products to a customer on account. Then, on January 10, Brad collected the cash on that account. What is the impact on Brad's accounting equation from the collection of cash on January 10? A. No net effect to the accounting equation. B. Assets increase and liabilities decrease. C. Assets decrease and liabilities decrease. D. Assets increase and stockholders' equity increases. 73. Which of the accounts are decreased on the debit side and increased on the credit side? A. Liabilities, stockholders' equity, and revenues. B. Dividends, liabilities, and assets. C. Expenses, dividends, and stockholders' equity. D. Assets, dividends, and expenses. 74. Which of the following is true about a "debit"? I. It is part of the double-entry procedure that keeps the accounting equation in balance. II. It represents an increase to assets. III. It represents a decrease to liabilities. IV. It is on the right side of a T-account. A. I and II. B. IV only. C. I, II, and III. D. I, II, III, and IV. 2-12 Chapter 002 The Accounting Information System 75. Which of the following is true about a "credit"? I. It is part of the double-entry procedure that keeps the accounting equation in balance. II. It represents a decrease to assets. III. It represents an increase to liabilities. IV. It is on the right side of a T-account. A. I and II. B. IV only. C. I, II, and III. D. I, II, III, and IV. 76. Dividends normally carry a _______ balance and are shown in the ______________. A. Debit; Statement of stockholders' equity. B. Debit; Income statement. C. Credit; Balance sheet. D. Debit; Balance Sheet. 77. Expenses normally carry a _______ balance and are shown in the ______________. A. Debit; Statement of stockholders' equity. B. Debit; Income statement. C. Credit; Balance sheet. D. Debit; Balance Sheet. 78. Liabilities normally carry a _______ balance and are shown in the ______________. A. Debit; Statement of stockholders' equity. B. Debit; Income statement. C. Credit; Balance sheet. D. Debit; Balance Sheet. 79. Which of the following accounts has a debit balance? A. Accounts payable. B. Unearned revenue. C. Service revenue. D. Salaries expense. 2-13 Chapter 002 The Accounting Information System 80. Which of the following accounts would normally have a credit balance? A. Accounts payable, service revenue, common stock. B. Salaries payable, unearned revenue, telephone expense. C. Income taxes payable, service revenue, dividends. D. Cash, maintenance expense, dividends. 81. Which of the following accounts would normally have a debit balance? A. Accounts payable, service revenue, common stock. B. Salaries payable, unearned revenue, telephone expense. C. Income taxes payable, service revenue, dividends. D. Cash, maintenance expense, dividends. 82. Which of the following accounts would normally have a debit balance and appear in the balance sheet? A. Accounts receivable. B. Unearned revenue. C. Salary expense. D. Dividends. 83. Which of the following accounts has a credit balance? A. Salaries expense B. Income taxes payable. C. Land. D. Prepaid rent. 2-14 Chapter 002 The Accounting Information System 84. The following statements pertain to recording transactions. Which of them are true? I. Total debits should equal total credits. II. It is possible to have multiple debits or credits in one journal entry. III. Assets are always listed first in journal entries. IV. Some journal entries will have debits only. A. I only. B. I and II. C. I, II, and IV. D. II, III, and IV. E. All comments are true. 85. Which of the following is not a possible journal entry? A. Credit assets; Debit expenses. B. Debit assets; Debit owners' equity. C. Credit revenues; Debit assets. D. Debit expenses; Credit liabilities. 86. Which of the accounts are increased with a debit and decreased with a credit? A. Liabilities, stockholders' equity, and revenues. B. Dividends, liabilities, and assets. C. Expenses, dividends, and stockholders' equity. D. Assets, dividends, and expenses. 87. A sale on account would be recorded with a: A. Debit to revenues. B. Credit to assets. C. Credit to liabilities. D. Debit to assets. 2-15 Chapter 002 The Accounting Information System 88. Xenon Corporation borrows $75,000 from First Bank. Xenon Corporation records this transaction with a: A. Debit to investments. B. Credit to retained earnings. C. Credit to liabilities. D. Credit to expenses. 89. Childers Service Company provides services to customers totaling $3,000, for which it billed the customers. How would the transaction be recorded? A. Debit cash $3,000, credit service revenue $3,000. B. Debit accounts receivable $3,000, credit service revenue $3,000. C. Debit accounts receivable $3,000, credit cash $3,000. D. Debit service revenue $3,000, credit accounts receivable $3,000. 90. A company received a bill for newspaper advertising services received, $400. The bill will be paid in 10 days. How would the transaction be recorded today? A. Debit advertising expense $400, credit accounts payable $400. B. Debit accounts payable $400, credit advertising expense $400. C. Debit accounts payable $400, credit cash $400. D. Debit advertising expense $400, credit cash $400. 91. When a company pays utilities of $1,800 in cash, the transaction is recorded as: A. Debit utilities expense $1,800, credit utilities payable $1,800. B. Debit utilities payable $1,800, credit cash $1,800. C. Debit cash $1,800, credit utilities expense $1,800. D. Debit utilities expense $1,800, credit cash $1,800. 92. Assume that cash is paid for rent to cover the next year. The appropriate debit and credit are: A. Debit rent expense, credit cash. B. Debit prepaid rent, credit rent expense. C. Debit prepaid rent, credit cash. D. Debit cash, credit prepaid rent. 2-16 Chapter 002 The Accounting Information System 93. Summer Leasing received $12,000 for 24 months rent in advance. How should Summer record this transaction? A. B. C. D. 94. Styleson Inc. performed cleaning services for their customers for cash. These transactions would be recorded as: A. Debit service revenue, credit cash. B. Debit cash, credit service revenue. C. Debit cash, credit accounts receivable. D. Debit accounts receivable, credit service revenue. 95. Assume that $18,000 cash is paid for insurance to cover the next year. The appropriate debit and credit are: A. Debit insurance expense $18,000, credit prepaid insurance $18,000. B. Debit prepaid insurance $18,000, credit insurance expense $18,000. C. Debit prepaid insurance $18,000, credit cash $18,000. D. Debit cash $18,000, credit prepaid insurance $18,000. 96. Schooner Inc. purchased a wagon by signing a note payable. This transaction would be recorded as: A. Debit wagon, credit cash. B. Debit cash, credit notes payable. C. Debit notes payable, credit wagon. D. Debit wagon, credit notes payable. 2-17 Chapter 002 The Accounting Information System 97. When a company pays $2,500 dividends to its stockholders, the transaction should be recorded as: A. B. C. D. 98. Daniel Dino Restaurants owes workers' salaries of $15,000. This would be recorded as: A. Debit salaries expense, credit cash. B. Debit salaries payable, credit cash. C. Debit salaries expense, credit salaries payable. D. Debit salaries payable, credit wages expense. 99. Jerome purchased a building for his business by signing a note to pay the amount due over the next ten years. Which of the following correctly describes how to record this transaction? A. Debit assets, credit liabilities. B. Debit assets, credit stockholders' equity. C. Debit liabilities, credit assets. D. Debit expenses, credit liabilities. 100. Incurring an expense for advertising on account would be recorded by: A. Debiting liabilities. B. Crediting assets. C. Debiting an expense. D. Debiting assets. 2-18 Chapter 002 The Accounting Information System 101. Tyler Incorporated receives $150,000 from investors for issuing them shares of its common stock. Tyler Incorporated records this transaction with a: A. Debit to investments. B. Credit to retained earnings. C. Credit to common stock. D. Credit to revenue. 102. The owner of an office building should report rent collected in advance as a debit to cash and a credit to: A. A liability. B. An asset other than cash. C. A revenue. D. An owners' equity. 103. Clement Company paid an account payable related to a previous utility bill of $1,000. This transaction should be recorded as follows on the payment date: A. Debit accounts payable $1,000, credit cash $1,000. B. Debit cash $1,000, credit accounts payable $1,000. C. Debit utilities expense $1,000, credit cash $1,000. D. Debit cash $1,000, credit utilities expense $1,000. 104. On July 7, 2010, Saints Inc. received $10,000 in cash from a customer for services to be provided on October 10, 2010. Which of the following describes how the transaction should be recorded on July 7, 2010? A. Debit cash $10,000, credit service revenue $10,000. B. Debit accounts receivable $10,000, credit service revenue $10,000. C. Debit cash $10,000, credit unearned revenue $10,000. D. Debit unearned revenue $10,000, credit cash $10,000. 2-19 Chapter 002 The Accounting Information System 105. On December 1, 2010, Bears Inc. signed a contract with a retailer to supply stuffed animal toys for the next calendar year. How should this transaction be recorded on December 1, 2010? A. Debit cash, credit sales revenue. B. Debit cash, credit accounts receivable. C. Debit accounts receivable, credit sales revenue. D. No transaction should be recorded on December 1, 2010. 106. The accounts payable account has a beginning balance of $12,000 and the company purchased $50,000 of supplies on account during the month. The ending balance was $10,000. How much did the company pay to creditors during the month? A. $50,000. B. $52,000. C. $60,000. D. $62,000. 107. On March 3, Cobra Inc. purchased a desk for $450 on account. On March 22, Cobra purchased another desk for $500 also on account, and then on March 24, Cobra paid $400 on account. At the end of March, what amount should Cobra report for desks (assuming these two desks were the only desks they had)? A. $50. B. $450. C. $500. D. $950. 2-20 Chapter 002 The Accounting Information System Essay Questions 108. Below are the steps in the measurement process of external transactions. Arrange them from first (1) to last (6). _____ (a) Post the transaction to the T-accounts in the general ledger. _____ (b) Assess whether the impact of the transaction results in a debit or credit to the account balance. _____ (c) Use source documents to identify accounts affected by external transactions. _____ (d) Analyze the impact of the transaction on the accounting equation. _____ (e) Prepare a trial balance. _____ (f) Record transactions using debits and credits. 109. A company received a utility bill of $600 but did not pay it. Indicate the amount of increases and decreases in the accounting equation. 110. A company purchases supplies on account for $1,700. Indicate the amount of increases and decreases in the accounting equation. 2-21 Chapter 002 The Accounting Information System 111. A company provides services to customers on account for $2,400. Indicate the amount of increases and decreases in the accounting equation. 112. A company pays $800 dividends to stockholders. Indicate the amount of increases and decreases in the accounting equation. 113. A company pays $1,300 on account for supplies previously purchased on account. Indicate the amount of increases and decreases in the accounting equation. 2-22 Chapter 002 The Accounting Information System 114. The following transactions occur for the Hamilton Manufacturers. (a) Provide services to customers on account for $4,500. (b) Purchase equipment by signing a note with the bank for $10,000. (c) Pay advertising of $1,500 for the current month. Analyze each transaction and indicate the amount of increases and decreases in the accounting equation. 115. Using the notion that the accounting equation (Assets = Liabilities + Stockholders' Equity) must remain in balance, indicate whether each of the following transactions is possible. (a) Cash decreases; Accounts Payable decreases. (b) Salaries expense increases; Salaries Payable decreases. (c) Accounts receivable decreases; Service revenue increases. 2-23 Chapter 002 The Accounting Information System 116. Suppose a company has the following balance sheet accounts: Calculate the missing amounts assuming the company has total assets of $40,000. 117. For each of the following accounts, indicate whether a debit or credit is used to increase (+) or decrease () the balance of the account. 2-24 Chapter 002 The Accounting Information System 118. For each of the following accounts, indicate whether we use a debit or a credit to increase the balance of the account. (a) Accounts receivable (b) Accounts payable (c) Salaries expense (d) Service revenue (e) Office supplies (f) Common stock (g) Advertising expense (h) Dividends 119. For each of the following accounts, indicate whether we use a debit or a credit to decrease the balance of the account. (a) Accounts receivable (b) Accounts payable (c) Salaries expense (d) Service revenue (e) Office supplies (f) Common stock (g) Advertising expense (h) Dividends 2-25 Chapter 002 The Accounting Information System 120. A company sells common stock for $20,000 cash. Record the transaction. 121. A company purchases a building for $100,000, paying $20,000 cash and signing a note payable for the remainder. Record the transaction. 122. A company purchases machinery for $15,000 cash. Record the transaction. 123. A company purchases office supplies on account for $7,500. Record the transaction. 2-26 Chapter 002 The Accounting Information System 124. A company provides services to customers on account, $3,500. Record the transaction. 125. A company provides services to customers for $2,400 cash. Record the transaction. 126. A company incurs employee salaries of $4,200 but does not pay them. Record the transaction. 127. A company pays $2,000 dividends to its stockholders. Record the transaction. 2-27 Chapter 002 The Accounting Information System 128. A company collects $4,000 cash from customers for services previously provided on account. Record the transaction. 129. A company receives $6,500 cash in advance from customers for services to be provided next year. Record the transaction. 130. A company pays $5,400 for maintenance in the current period. Record the transaction. 131. A company pays $12,000 to purchase a one-year insurance policy. Record the transaction. 2-28 Chapter 002 The Accounting Information System 132. Record the following transactions for Acme Builders: (a) Purchase office supplies on account, $1,200. (b) Provide services to customers for cash, $2,500. (c) Pay $1,100 in salaries for the current month. 133. Record the following transactions for the Stroud Music Store: (a) Provide music lessons to students for $12,000 on account. (b) Purchase music supplies on account, $1,500. (c) Pay rent for the current month, $2,000. (d) Receive $10,000 cash from students in (a) above. 134. Rite Shoes was involved in the transactions described below. Record each transaction. If an entry is not required, state "No Entry." (a) Purchased $8,200 of supplies on account. (b) Paid weekly salaries, $920. (c) Provide services to customers: Cash: $7,100; On account: $5,300. (d) Paid for supplies purchased in (a) above. (e) Placed an order for $6,200 of supplies. 2-29 Chapter 002 The Accounting Information System 135. Record the following transactions. If an entry is not required, state "No Entry." (a) Started business by issuing 10,000 shares of common stock for $20,000. (b) Hire Rebecca as an administrative assistant, promising to pay her $2,000 every two week. (c) Rented a building for three years at $500 per month and paid six months' rent in advance. (d) Purchased equipment for $5,400 cash. (e) Purchased $1,800 of supplies on account. (f) Provided services to customers for $7,800 cash. (g) Paid employee salaries, $5,200. (h) Paid for supplies purchased in item (e). (i) Paid $800 for current advertising in a local newspaper. (j) Paid utility bill of $1,300 for the current month. 136. Consider the following T-account for accounts payable. 1. Compute the balance of the accounts payable account. 2. Give an example of a transaction that would have resulted in the $8,800 posting to the account. 3. Give an example of a transaction that would have resulted in the $4,500 posting to the account. 2-30 Chapter 002 The Accounting Information System 137. Consider the following transactions for Mittel Corporation: a. Sell common stock for $10,000. b. Purchase equipment for $11,500 cash c. Pay employee salaries of $3,700. e. Provides services to customers for $6,200 cash. 1. Post these transaction to the cash T-account. Assume the balance of cash before these transaction is $4,200. 2. Calculate the ending balance of cash. 138. Use the following information to prepare a trial balance. 139. Describe the difference between external events and internal events and give two examples of each. 2-31 Chapter 002 The Accounting Information System 140. Describe the six steps in the measurement process of external transactions. 141. Explain what it means that external transactions have a dual effect. Listed below are ten terms followed by a list of phrases that describe or characterize five of the terms. Match each phrase with the correct term by placing the letter designating the best term in the space provided by the phrase. Terms: a. Assets b. Debit c. Journal entry d. Liabilities e. Revenues f. Expenses g. Credit h. General ledger i. Trial balance j. Dividends 2-32 Chapter 002 The Accounting Information System 142. ____ Refers to the right side of an account. 143. ____ Convention used to record transactions of a company. 144. ____ Resources earned by providing goods and services to customers. 145. ____ Resources owned by a company. 146. ____ List of all accounts and their balances after external transactions are recorded. 2-33 Chapter 002 The Accounting Information System Listed below are ten terms followed by a list of phrases that describe or characterize five of the terms. Match each phrase with the correct term by placing the letter designating the best term in the space provided by the phrase. Terms: a. Assets b. Debit c. Journal entry d. Liabilities e. Revenues f. Expenses g. Credit h. General ledger i. Trial balance j. Dividends 147. ____ Asset and expense accounts normally have this type of balance. 148. ____ Contains all the accounts of a company. 2-34 Chapter 002 The Accounting Information System 149. ____ Costs to generate revenues. 150. ____ Resources owed by a company. 151. ____ Payments to stockholders. 2-35 Chapter 002 The Accounting Information System Key True / False Questions 1. External transactions are transactions the firm conducts with a separate economic entity, such as selling products to a customer, purchasing supplies from a vendor, paying salaries to an employee, and borrowing money from a bank. TRUE AACSB: Reflective Thinking AICPA: Critical Thinking Bloom's: Knowledge Difficulty: Easy Learning Objective: 1 2. Internal transactions are events that affect the financial position of the company but do not include an exchange with a separate economic entity. Examples are using supplies on hand and earning revenues after having received cash in advance from a customer. TRUE AACSB: Reflective Thinking AICPA: Critical Thinking Bloom's: Knowledge Difficulty: Easy Learning Objective: 1 3. A list of all account names used to record transactions of a company is referred to as a Taccount. FALSE This is referred to as a chart of accounts AACSB: Reflective Thinking AICPA: Critical Thinking Bloom's: Knowledge Difficulty: Easy Learning Objective: 1 2-36 Chapter 002 The Accounting Information System Key 4. After recording each transaction, total assets must equal total liabilities plus stockholders' equity. TRUE AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Easy Learning Objective: 2 5. If a transaction causes total assets of the company to increase by $2,000, then liabilities plus stockholders' equity also increases by $2,000. TRUE AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Easy Learning Objective: 2 6. If a transaction causes total assets of the company to increase by $5,000 and total liabilities to increase by $3,000, then stockholders' equity increases by $8,000. FALSE Assets ($5,000) = Liabilities ($3,000) + Stockholders' Equity ($2,000). AACSB: Analytical AICPA: Measurement Bloom's: Analysis Difficulty: Medium Learning Objective: 2 7. Borrowing cash from the bank causes assets to increase and liabilities to increase. TRUE AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 2 2-37 Chapter 002 The Accounting Information System Key 8. Purchasing equipment using cash causes assets to increase. FALSE There is no change to total assets. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 2 9. Providing services to customers for cash causes stockholders' equity to increase. TRUE AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 2 10. Incurring employees' salaries but not paying them causes no change to stockholders' equity. FALSE The salaries expense would reduce stockholders' equity. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 2 11. Paying dividends to its stockholders causes a company's stockholders' equity to decrease. TRUE AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 2 2-38 Chapter 002 The Accounting Information System Key 12. Selling common stock for cash causes assets to increase and stockholders' equity to decrease. FALSE Stockholders' equity increases. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 2 13. Purchasing office supplies on account causes assets to increase and liabilities to increase. TRUE AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Easy Learning Objective: 2 14. Providing services to customers on account causes assets to increase and stockholders' equity to increase. TRUE AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 2 2-39 Chapter 002 The Accounting Information System Key 15. Receiving cash in advance from a customer for services to be provided in the future causes assets to increase and stockholders' equity to increase. FALSE Assets increase and liabilities increase. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 2 16. Paying for one year of rent in advance does not affect the accounting equation. TRUE AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Easy Learning Objective: 2 17. Purchasing supplies on account increases the balance of the accounts receivable account. FALSE The balance of accounts payable increases. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Easy Learning Objective: 2 18. Amounts owed from customers are recorded in the accounts receivable account. TRUE AACSB: Reflective Thinking AICPA: Critical Thinking Bloom's: Knowledge Difficulty: Easy Learning Objective: 2 2-40 Chapter 002 The Accounting Information System Key 19. The two components of stockholders' equity are debits and credits. FALSE The two components of stockholders' equity are common stock and retained earnings. AACSB: Reflective Thinking AICPA: Critical Thinking Bloom's: Knowledge Difficulty: Easy Learning Objective: 2 20. Revenues have the effect of increasing retained earnings. TRUE AACSB: Reflective Thinking AICPA: Critical Thinking Bloom's: Knowledge Difficulty: Easy Learning Objective: 2 21. Expenses have the effect of decreasing retained earnings. TRUE AACSB: Reflective Thinking AICPA: Critical Thinking Bloom's: Knowledge Difficulty: Easy Learning Objective: 2 22. Receiving cash in advance from customers increases the service revenue account. FALSE Receiving cash in advance from customers increases the unearned revenue account. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 2 2-41 Chapter 002 The Accounting Information System Key 23. Unearned revenue is a liability account. TRUE AACSB: Reflective Thinking AICPA: Critical Thinking Bloom's: Knowledge Difficulty: Easy Learning Objective: 2 24. Liability accounts increase with a debit and decrease with a credit. FALSE Liability accounts increase with a credit and decrease with a debit. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Easy Learning Objective: 3 25. Liability accounts increase with a credit and decrease with a debit. TRUE AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Easy Learning Objective: 3 26. Common stock increases with a credit and decreases with a debit. TRUE AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Easy Learning Objective: 3 2-42 Chapter 002 The Accounting Information System Key 27. Revenue accounts increase with a debit and decrease with a credit. FALSE Revenue accounts increase with a credit and decrease with a debit. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Easy Learning Objective: 3 28. Expense accounts increase with a debit and decrease with a credit. TRUE AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Easy Learning Objective: 3 29. The dividends account increases with a credit and decreases with a debit. FALSE The dividends account increases with a debit and decreases with a credit. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 3 2-43 Chapter 002 The Accounting Information System Key 30. A debit to an account balance always results in the balance increasing. FALSE A debit increases assets and dividends, but decreases liabilities, stockholders' equity, and revenues. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Easy Learning Objective: 3 31. A credit to an account balance always results in the balance decreasing. FALSE A credit decreases assets and dividends, but increases liabilities, stockholders' equity, and revenues. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Easy Learning Objective: 3 32. A journal provides a chronological record of all transactions affecting a firm. TRUE AACSB: Reflective Thinking AICPA: Critical Thinking Bloom's: Knowledge Difficulty: Easy Learning Objective: 4 33. For each transaction, there must be at least one debit amount and one credit amount. TRUE AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Easy Learning Objective: 4 2-44 Chapter 002 The Accounting Information System Key 34. For each transaction, the total debit amounts must equal the total credit amounts. TRUE AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Easy Learning Objective: 4 35. Selling common stock for cash is recorded with a debit to common stock. FALSE Selling common stock for cash is recorded with a credit to common stock. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Easy Learning Objective: 4 36. Borrowing cash from the bank is recorded with a debit to cash. TRUE AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Easy Learning Objective: 4 37. Purchasing office supplies is recorded with a credit to office supplies. FALSE Purchasing office supplies is recorded with a debit to office supplies. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Easy Learning Objective: 4 2-45 Chapter 002 The Accounting Information System Key 38. Paying employees' salaries for the current period is recorded with a debit to salaries expense. TRUE AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Easy Learning Objective: 4 39. Providing services to customers is recorded with a debit to service revenue. FALSE Providing services to customers is recorded with a credit to service revenue. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Easy Learning Objective: 4 40. The general ledger includes all accounts used to record the company's transactions. TRUE AACSB: Reflective Thinking AICPA: Critical Thinking Bloom's: Knowledge Difficulty: Easy Learning Objective: 5 41. The process of transferring the debit and credit information from the journal to individual accounts in the general ledger is called journalizing. FALSE The process is called posting. AACSB: Reflective Thinking AICPA: Critical Thinking Bloom's: Knowledge Difficulty: Easy Learning Objective: 5 2-46 Chapter 002 The Accounting Information System Key 42. After we've posted transactions to the general ledger accounts, the sum of the accounts with debit balances should equal the sum of the accounts with credit balances. TRUE AACSB: Reflective Thinking AICPA: Thinking Bloom's: Critical Knowledge Difficulty: Easy Learning Objective: 6 43. A trial balance is a list of all accounts and their balances at a particular date, showing that assets equal liabilities. FALSE The trial balance shows that total debits equal total credits. AACSB: Reflective Thinking AICPA: Critical Thinking Bloom's: Knowledge Difficulty: Easy Learning Objective: 6 44. If total debits equal total credits in the trial balance, then all balances are necessarily correct. FALSE A trial balance could contain offsetting errors where the balance of one account is misstated in one direction but the balance of another account (with the same type of debit or credit balance) is misstated in the other direction. AACSB: Reflective Thinking AICPA: Critical Thinking Bloom's: Knowledge Difficulty: Medium Learning Objective: 6 2-47 Chapter 002 The Accounting Information System Key Multiple Choice Questions 45. Which of the following is not part of measuring external transactions? A. Using source documents to analyze accounts affected. B. Recording transactions. C. Making payments on all amounts owed. D. Analyzing transactions for their effect on the accounting equation. AACSB: Reflective Thinking AICPA: Critical Thinking Bloom's: Knowledge Difficulty: Easy Learning Objective: 1 46. External events include all of the following except: A. Paying employees' salaries. B. Purchasing equipment. C. Using office supplies. D. Collecting an account receivable. AACSB: Reflective Thinking AICPA: Critical Thinking Bloom's: Knowledge Difficulty: Medium Learning Objective: 1 47. For each transaction recorded in an accounting system, the basic equation that must be maintained at all times is: A. Assets = Liabilities + Stockholders' Equity. B. Cash Increases = Cash Decreases. C. Revenues = Expenses + Dividends. D. Assets = Liabilities. AACSB: Reflective Thinking AICPA: Critical Thinking Bloom's: Knowledge Difficulty: Easy Learning Objective: 2 2-48 Chapter 002 The Accounting Information System Key 48. The following amounts are reported in the ledger of Mariah Company: What is the balance in the common stock account? A. $44,000. B. $32,000. C. $48,000. D. $42,000. AACSB: Analytical AICPA: Critical Thinking Bloom's: Analysis Difficulty: Hard Learning Objective: 2 49. When a company incurs workers' salaries but does not pay them, how will the basic accounting equation be affected? A. Stockholders' equity decreases. B. Revenues decrease. C. Expenses decrease. D. Liabilities decrease. AACSB: Reflective Thinking AICPA: Critical Thinking Bloom's: Knowledge Difficulty: Medium Learning Objective: 2 2-49 Chapter 002 The Accounting Information System Key 50. When cash payments are made to stockholders, what is the effect on the company's accounts? A. Cash decreases and dividends increase. B. Cash increases and dividends decrease. C. Cash decreases and common stock decreases. D. Cash increases and common stock increases. AACSB: Reflective Thinking AICPA: Critical Thinking Bloom's: Knowledge Difficulty: Medium Learning Objective: 2 51. Which of the following is not an asset account? A. Office supplies. B. Accounts payable. C. Equipment. D. Accounts receivable. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Easy Learning Objective: 2 52. An account receivable can best be defined as: A. A payment to the owners. B. A sale of goods and services. C. A resource owned by the company. D. An amount owed by the company. AACSB: Reflective Thinking AICPA: Critical Thinking Bloom's: Knowledge Difficulty: Medium Learning Objective: 2 2-50 Chapter 002 The Accounting Information System Key 53. Receiving assets from customers before services are performed results in: A. Prepaid assets. B. Service revenue. C. Unearned revenues. D. Accounts receivable. AACSB: Reflective Thinking AICPA: Critical Thinking Bloom's: Knowledge Difficulty: Easy Learning Objective: 2 54. When the company pays stockholders a dividend, what is the effect on the accounting equation for that company? A. Decrease stockholders' equity and increase assets. B. Increase liabilities and increase assets. C. Decrease assets and decrease liabilities. D. Decrease assets and decrease stockholders' equity. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 2 55. Pumpkin Inc. sold $500 in pumpkins to a customer on account on January 1. On January 11 Pumpkin collected the cash from that customer. What is the impact on Pumpkin's accounting equation from the collection of cash? A. No net effect to the accounting equation. B. Decrease assets and increase liabilities. C. Increase assets and increase liabilities. D. Decrease assets and decrease liabilities. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Hard Learning Objective: 2 2-51 Chapter 002 The Accounting Information System Key 56. A company receives a $50,000 cash deposit from a customer on October 15 but will not provide services until November 20. Which of the following statements is true? A. The company records service revenue on October 15. B. The company records cash collection November 20. C. The company records an unearned revenue on October 15. D. The company records nothing on October 15. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Hard Learning Objective: 2 57. Which of the following would increase assets and increase liabilities? A. Provide services to customers on account. B. Purchase office supplies on account. C. Pay dividends to stockholders. D. Received a utility bill but do not pay for it. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 2 58. Receiving cash from an account receivable: A. Increases a revenue and decreases an asset. B. Decreases a liability and increases an asset. C. Increases an asset and increases a revenue. D. Increases one asset and decreases another asset. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 2 2-52 Chapter 002 The Accounting Information System Key 59. An expense has what effect on the accounting equation? A. Decrease liabilities. B. Decrease stockholders' equity. C. Increase assets. D. No effect. AACSB: Reflective Thinking AICPA: Critical Thinking Bloom's: Knowledge Difficulty: Medium Learning Objective: 2 60. A revenue has what effect on the accounting equation? A. Increase liabilities. B. Decrease assets. C. Increase stockholders' equity. D. No effect. AACSB: Reflective Thinking AICPA: Critical Thinking Bloom's: Knowledge Difficulty: Medium Learning Objective: 2 61. Investments by stockholders have what effect on the accounting equation? A. Assets increase and liabilities increase. B. Expenses increase and liabilities increase. C. Assets increase and revenues increase. D. Assets increase and stockholders' equity increases. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 2 2-53 Chapter 002 The Accounting Information System Key 62. Which of the following is not possible when recording a transaction? A. Liabilities increase and assets decrease. B. Stockholders' equity increases and assets increase. C. One asset increases and another asset decreases. D. Stockholders' equity decreases and assets decrease. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 2 63. Amounts owed to suppliers for supplies purchased on account are defined as: A. Cash. B. Accounts receivable. C. Accounts payable. D. Supplies expense. AACSB: Reflective Thinking AICPA: Critical Thinking Bloom's: Knowledge Difficulty: Easy Learning Objective: 2 64. Purchasing office supplies on account will: A. Not change assets. B. Increase assets and decrease liabilities. C. Increase assets and increase liabilities. D. Increase assets and increase stockholders' equity. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 2 2-54 Chapter 002 The Accounting Information System Key 65. Providing services and receiving cash will: A. Increase assets and increase stockholders' equity. B. Increase assets and increase liabilities. C. Decrease assets and increase liabilities. D. Decrease liabilities and increase stockholders' equity. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 2 66. When a company provides services on account, the accounting equation would be affected as follows: A. Assets increase. B. Revenues increase. C. Assets increase and liabilities decrease. D. Assets increase and stockholders' equity increases. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Hard Learning Objective: 2 67. If a company provides services on account, which of the following is true? A. Expenses increase. B. Liabilities increase. C. Stockholders' equity increases. D. Assets decrease. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 2 2-55 Chapter 002 The Accounting Information System Key 68. When a payment is made on an account payable: A. Assets and stockholders' equity decrease. B. Assets and liabilities decrease. C. Liabilities and revenues decrease. D. Assets and expenses decrease. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 2 69. Purchasing office equipment on account has what impact on the accounting equation? A. Stockholders' equity decreases and assets increase. B. Liabilities increase and assets increase. C. Assets decrease and liabilities decrease. D. Assets increase and stockholders' equity increases. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 2 70. Purchasing supplies for cash has what effect on the accounting equation? A. Increase assets. B. Decrease stockholders' equity. C. Decrease liabilities. D. No effect. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Hard Learning Objective: 2 2-56 Chapter 002 The Accounting Information System Key 71. The unearned revenue account is shown in which statement? A. Income statement. B. Statement of cash flows. C. Balance sheet. D. Statement of stockholders' equity. AACSB: Reflective Thinking AICPA: Reporting Bloom's: Knowledge Difficulty: Medium Learning Objective: 2 72. On January 1 Brad Inc. sold $30,000 in products to a customer on account. Then, on January 10, Brad collected the cash on that account. What is the impact on Brad's accounting equation from the collection of cash on January 10? A. No net effect to the accounting equation. B. Assets increase and liabilities decrease. C. Assets decrease and liabilities decrease. D. Assets increase and stockholders' equity increases. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Hard Learning Objective: 2 73. Which of the accounts are decreased on the debit side and increased on the credit side? A. Liabilities, stockholders' equity, and revenues. B. Dividends, liabilities, and assets. C. Expenses, dividends, and stockholders' equity. D. Assets, dividends, and expenses. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 3 2-57 Chapter 002 The Accounting Information System Key 74. Which of the following is true about a "debit"? I. It is part of the double-entry procedure that keeps the accounting equation in balance. II. It represents an increase to assets. III. It represents a decrease to liabilities. IV. It is on the right side of a T-account. A. I and II. B. IV only. C. I, II, and III. D. I, II, III, and IV. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 3 75. Which of the following is true about a "credit"? I. It is part of the double-entry procedure that keeps the accounting equation in balance. II. It represents a decrease to assets. III. It represents an increase to liabilities. IV. It is on the right side of a T-account. A. I and II. B. IV only. C. I, II, and III. D. I, II, III, and IV. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 3 2-58 Chapter 002 The Accounting Information System Key 76. Dividends normally carry a _______ balance and are shown in the ______________. A. Debit; Statement of stockholders' equity. B. Debit; Income statement. C. Credit; Balance sheet. D. Debit; Balance Sheet. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 3 77. Expenses normally carry a _______ balance and are shown in the ______________. A. Debit; Statement of stockholders' equity. B. Debit; Income statement. C. Credit; Balance sheet. D. Debit; Balance Sheet. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 3 78. Liabilities normally carry a _______ balance and are shown in the ______________. A. Debit; Statement of stockholders' equity. B. Debit; Income statement. C. Credit; Balance sheet. D. Debit; Balance Sheet. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 3 2-59 Chapter 002 The Accounting Information System Key 79. Which of the following accounts has a debit balance? A. Accounts payable. B. Unearned revenue. C. Service revenue. D. Salaries expense. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Easy Learning Objective: 3 80. Which of the following accounts would normally have a credit balance? A. Accounts payable, service revenue, common stock. B. Salaries payable, unearned revenue, telephone expense. C. Income taxes payable, service revenue, dividends. D. Cash, maintenance expense, dividends. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 3 81. Which of the following accounts would normally have a debit balance? A. Accounts payable, service revenue, common stock. B. Salaries payable, unearned revenue, telephone expense. C. Income taxes payable, service revenue, dividends. D. Cash, maintenance expense, dividends. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 3 2-60 Chapter 002 The Accounting Information System Key 82. Which of the following accounts would normally have a debit balance and appear in the balance sheet? A. Accounts receivable. B. Unearned revenue. C. Salary expense. D. Dividends. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 3 83. Which of the following accounts has a credit balance? A. Salaries expense B. Income taxes payable. C. Land. D. Prepaid rent. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Easy Learning Objective: 3 84. The following statements pertain to recording transactions. Which of them are true? I. Total debits should equal total credits. II. It is possible to have multiple debits or credits in one journal entry. III. Assets are always listed first in journal entries. IV. Some journal entries will have debits only. A. I only. B. I and II. C. I, II, and IV. D. II, III, and IV. E. All comments are true. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Hard Learning Objective: 4 2-61 Chapter 002 The Accounting Information System Key 85. Which of the following is not a possible journal entry? A. Credit assets; Debit expenses. B. Debit assets; Debit owners' equity. C. Credit revenues; Debit assets. D. Debit expenses; Credit liabilities. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 4 86. Which of the accounts are increased with a debit and decreased with a credit? A. Liabilities, stockholders' equity, and revenues. B. Dividends, liabilities, and assets. C. Expenses, dividends, and stockholders' equity. D. Assets, dividends, and expenses. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 3 87. A sale on account would be recorded with a: A. Debit to revenues. B. Credit to assets. C. Credit to liabilities. D. Debit to assets. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 4 2-62 Chapter 002 The Accounting Information System Key 88. Xenon Corporation borrows $75,000 from First Bank. Xenon Corporation records this transaction with a: A. Debit to investments. B. Credit to retained earnings. C. Credit to liabilities. D. Credit to expenses. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 4 89. Childers Service Company provides services to customers totaling $3,000, for which it billed the customers. How would the transaction be recorded? A. Debit cash $3,000, credit service revenue $3,000. B. Debit accounts receivable $3,000, credit service revenue $3,000. C. Debit accounts receivable $3,000, credit cash $3,000. D. Debit service revenue $3,000, credit accounts receivable $3,000. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 4 90. A company received a bill for newspaper advertising services received, $400. The bill will be paid in 10 days. How would the transaction be recorded today? A. Debit advertising expense $400, credit accounts payable $400. B. Debit accounts payable $400, credit advertising expense $400. C. Debit accounts payable $400, credit cash $400. D. Debit advertising expense $400, credit cash $400. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 4 2-63 Chapter 002 The Accounting Information System Key 91. When a company pays utilities of $1,800 in cash, the transaction is recorded as: A. Debit utilities expense $1,800, credit utilities payable $1,800. B. Debit utilities payable $1,800, credit cash $1,800. C. Debit cash $1,800, credit utilities expense $1,800. D. Debit utilities expense $1,800, credit cash $1,800. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 4 92. Assume that cash is paid for rent to cover the next year. The appropriate debit and credit are: A. Debit rent expense, credit cash. B. Debit prepaid rent, credit rent expense. C. Debit prepaid rent, credit cash. D. Debit cash, credit prepaid rent. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 4 2-64 Chapter 002 The Accounting Information System Key 93. Summer Leasing received $12,000 for 24 months rent in advance. How should Summer record this transaction? A. B. C. D. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 4 94. Styleson Inc. performed cleaning services for their customers for cash. These transactions would be recorded as: A. Debit service revenue, credit cash. B. Debit cash, credit service revenue. C. Debit cash, credit accounts receivable. D. Debit accounts receivable, credit service revenue. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 4 2-65 Chapter 002 The Accounting Information System Key 95. Assume that $18,000 cash is paid for insurance to cover the next year. The appropriate debit and credit are: A. Debit insurance expense $18,000, credit prepaid insurance $18,000. B. Debit prepaid insurance $18,000, credit insurance expense $18,000. C. Debit prepaid insurance $18,000, credit cash $18,000. D. Debit cash $18,000, credit prepaid insurance $18,000. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 4 96. Schooner Inc. purchased a wagon by signing a note payable. This transaction would be recorded as: A. Debit wagon, credit cash. B. Debit cash, credit notes payable. C. Debit notes payable, credit wagon. D. Debit wagon, credit notes payable. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 4 2-66 Chapter 002 The Accounting Information System Key 97. When a company pays $2,500 dividends to its stockholders, the transaction should be recorded as: A. B. C. D. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 4 98. Daniel Dino Restaurants owes workers' salaries of $15,000. This would be recorded as: A. Debit salaries expense, credit cash. B. Debit salaries payable, credit cash. C. Debit salaries expense, credit salaries payable. D. Debit salaries payable, credit wages expense. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 4 2-67 Chapter 002 The Accounting Information System Key 99. Jerome purchased a building for his business by signing a note to pay the amount due over the next ten years. Which of the following correctly describes how to record this transaction? A. Debit assets, credit liabilities. B. Debit assets, credit stockholders' equity. C. Debit liabilities, credit assets. D. Debit expenses, credit liabilities. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 4 100. Incurring an expense for advertising on account would be recorded by: A. Debiting liabilities. B. Crediting assets. C. Debiting an expense. D. Debiting assets. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Easy Learning Objective: 4 101. Tyler Incorporated receives $150,000 from investors for issuing them shares of its common stock. Tyler Incorporated records this transaction with a: A. Debit to investments. B. Credit to retained earnings. C. Credit to common stock. D. Credit to revenue. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 4 2-68 Chapter 002 The Accounting Information System Key 102. The owner of an office building should report rent collected in advance as a debit to cash and a credit to: A. A liability. B. An asset other than cash. C. A revenue. D. An owners' equity. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 4 103. Clement Company paid an account payable related to a previous utility bill of $1,000. This transaction should be recorded as follows on the payment date: A. Debit accounts payable $1,000, credit cash $1,000. B. Debit cash $1,000, credit accounts payable $1,000. C. Debit utilities expense $1,000, credit cash $1,000. D. Debit cash $1,000, credit utilities expense $1,000. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 4 104. On July 7, 2010, Saints Inc. received $10,000 in cash from a customer for services to be provided on October 10, 2010. Which of the following describes how the transaction should be recorded on July 7, 2010? A. Debit cash $10,000, credit service revenue $10,000. B. Debit accounts receivable $10,000, credit service revenue $10,000. C. Debit cash $10,000, credit unearned revenue $10,000. D. Debit unearned revenue $10,000, credit cash $10,000. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 4 2-69 Chapter 002 The Accounting Information System Key 105. On December 1, 2010, Bears Inc. signed a contract with a retailer to supply stuffed animal toys for the next calendar year. How should this transaction be recorded on December 1, 2010? A. Debit cash, credit sales revenue. B. Debit cash, credit accounts receivable. C. Debit accounts receivable, credit sales revenue. D. No transaction should be recorded on December 1, 2010. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Hard Learning Objective: 4 106. The accounts payable account has a beginning balance of $12,000 and the company purchased $50,000 of supplies on account during the month. The ending balance was $10,000. How much did the company pay to creditors during the month? A. $50,000. B. $52,000. C. $60,000. D. $62,000. $12,000 + $50,000 - $10,000 = $52,000. AACSB: Analytical AICPA: Reporting Bloom's: Analysis Difficulty: Hard Learning Objective: 5 2-70 Chapter 002 The Accounting Information System Key 107. On March 3, Cobra Inc. purchased a desk for $450 on account. On March 22, Cobra purchased another desk for $500 also on account, and then on March 24, Cobra paid $400 on account. At the end of March, what amount should Cobra report for desks (assuming these two desks were the only desks they had)? A. $50. B. $450. C. $500. D. $950. AACSB: Analytical AICPA: Reporting Bloom's: Analysis Difficulty: Medium Learning Objective: 5 Essay Questions 108. Below are the steps in the measurement process of external transactions. Arrange them from first (1) to last (6). _____ (a) Post the transaction to the T-accounts in the general ledger. _____ (b) Assess whether the impact of the transaction results in a debit or credit to the account balance. _____ (c) Use source documents to identify accounts affected by external transactions. _____ (d) Analyze the impact of the transaction on the accounting equation. _____ (e) Prepare a trial balance. _____ (f) Record transactions using debits and credits. (a) 5; (b) 3; (c) 1; (d) 2; (e) 6; (f) 4 AACSB: Reflective Thinking AICPA: Critical Thinking Bloom's: Comprehension Difficulty: Medium Learning Objective: 1 2-71 Chapter 002 The Accounting Information System Key 109. A company received a utility bill of $600 but did not pay it. Indicate the amount of increases and decreases in the accounting equation. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 2 110. A company purchases supplies on account for $1,700. Indicate the amount of increases and decreases in the accounting equation. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Easy Learning Objective: 2 111. A company provides services to customers on account for $2,400. Indicate the amount of increases and decreases in the accounting equation. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Easy Learning Objective: 2 2-72 Chapter 002 The Accounting Information System Key 112. A company pays $800 dividends to stockholders. Indicate the amount of increases and decreases in the accounting equation. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Easy Learning Objective: 2 113. A company pays $1,300 on account for supplies previously purchased on account. Indicate the amount of increases and decreases in the accounting equation. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Easy Learning Objective: 2 2-73 Chapter 002 The Accounting Information System Key 114. The following transactions occur for the Hamilton Manufacturers. (a) Provide services to customers on account for $4,500. (b) Purchase equipment by signing a note with the bank for $10,000. (c) Pay advertising of $1,500 for the current month. Analyze each transaction and indicate the amount of increases and decreases in the accounting equation. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 2 115. Using the notion that the accounting equation (Assets = Liabilities + Stockholders' Equity) must remain in balance, indicate whether each of the following transactions is possible. (a) Cash decreases; Accounts Payable decreases. (b) Salaries expense increases; Salaries Payable decreases. (c) Accounts receivable decreases; Service revenue increases. (a) Yes; (b) No; (c) No AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 2 2-74 Chapter 002 The Accounting Information System Key 116. Suppose a company has the following balance sheet accounts: Calculate the missing amounts assuming the company has total assets of $40,000. Building = $18,000; Common stock = $22,100. AACSB: Analytical AICPA: Measurement Bloom's: Analysis Difficulty: Hard Learning Objective: 2 2-75 Chapter 002 The Accounting Information System Key 117. For each of the following accounts, indicate whether a debit or credit is used to increase (+) or decrease () the balance of the account. (a) - ,+; (b) - ,+; (c) +, - ; (d) - ,+; (e) +, - ; (f) - ,+; (g) +, - AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 3 118. For each of the following accounts, indicate whether we use a debit or a credit to increase the balance of the account. (a) Accounts receivable (b) Accounts payable (c) Salaries expense (d) Service revenue (e) Office supplies (f) Common stock (g) Advertising expense (h) Dividends (a) debit; (b) credit; (c) debit; (d) credit; (e) debit; (f) credit; (g) debit; (h) debit AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 3 2-76 Chapter 002 The Accounting Information System Key 119. For each of the following accounts, indicate whether we use a debit or a credit to decrease the balance of the account. (a) Accounts receivable (b) Accounts payable (c) Salaries expense (d) Service revenue (e) Office supplies (f) Common stock (g) Advertising expense (h) Dividends (a) credit; (b) debit; (c) credit; (d) debit; (e) credit; (f) debit; (g) credit; (h) credit AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 3 120. A company sells common stock for $20,000 cash. Record the transaction. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 4 2-77 Chapter 002 The Accounting Information System Key 121. A company purchases a building for $100,000, paying $20,000 cash and signing a note payable for the remainder. Record the transaction. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 4 122. A company purchases machinery for $15,000 cash. Record the transaction. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Easy Learning Objective: 4 123. A company purchases office supplies on account for $7,500. Record the transaction. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Easy Learning Objective: 4 2-78 Chapter 002 The Accounting Information System Key 124. A company provides services to customers on account, $3,500. Record the transaction. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Easy Learning Objective: 4 125. A company provides services to customers for $2,400 cash. Record the transaction. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Easy Learning Objective: 4 126. A company incurs employee salaries of $4,200 but does not pay them. Record the transaction. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 4 2-79 Chapter 002 The Accounting Information System Key 127. A company pays $2,000 dividends to its stockholders. Record the transaction. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Easy Learning Objective: 4 128. A company collects $4,000 cash from customers for services previously provided on account. Record the transaction. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 4 129. A company receives $6,500 cash in advance from customers for services to be provided next year. Record the transaction. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 4 2-80 Chapter 002 The Accounting Information System Key 130. A company pays $5,400 for maintenance in the current period. Record the transaction. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Easy Learning Objective: 4 131. A company pays $12,000 to purchase a one-year insurance policy. Record the transaction. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 4 2-81 Chapter 002 The Accounting Information System Key 132. Record the following transactions for Acme Builders: (a) Purchase office supplies on account, $1,200. (b) Provide services to customers for cash, $2,500. (c) Pay $1,100 in salaries for the current month. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 4 2-82 Chapter 002 The Accounting Information System Key 133. Record the following transactions for the Stroud Music Store: (a) Provide music lessons to students for $12,000 on account. (b) Purchase music supplies on account, $1,500. (c) Pay rent for the current month, $2,000. (d) Receive $10,000 cash from students in (a) above. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 4 2-83 Chapter 002 The Accounting Information System Key 134. Rite Shoes was involved in the transactions described below. Record each transaction. If an entry is not required, state "No Entry." (a) Purchased $8,200 of supplies on account. (b) Paid weekly salaries, $920. (c) Provide services to customers: Cash: $7,100; On account: $5,300. (d) Paid for supplies purchased in (a) above. (e) Placed an order for $6,200 of supplies. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Hard Learning Objective: 4 2-84 Chapter 002 The Accounting Information System Key 135. Record the following transactions. If an entry is not required, state "No Entry." (a) Started business by issuing 10,000 shares of common stock for $20,000. (b) Hire Rebecca as an administrative assistant, promising to pay her $2,000 every two week. (c) Rented a building for three years at $500 per month and paid six months' rent in advance. (d) Purchased equipment for $5,400 cash. (e) Purchased $1,800 of supplies on account. (f) Provided services to customers for $7,800 cash. (g) Paid employee salaries, $5,200. (h) Paid for supplies purchased in item (e). (i) Paid $800 for current advertising in a local newspaper. (j) Paid utility bill of $1,300 for the current month. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Hard Learning Objective: 4 2-85 Chapter 002 The Accounting Information System Key 136. Consider the following T-account for accounts payable. 1. Compute the balance of the accounts payable account. 2. Give an example of a transaction that would have resulted in the $8,800 posting to the account. 3. Give an example of a transaction that would have resulted in the $4,500 posting to the account. 1. $10,200 - $8,800 + $4,500 = $5,900. 2. Postings on the left side (or debit side) of the accounts payable T-account represent decreases to accounts payable, such as making a payment on the account. 3. Postings on the right side (or credit side) of the accounts payable T-account represent increases to accounts payable, such as purchasing office supplies on account. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Hard Learning Objective: 5 2-86 Chapter 002 The Accounting Information System Key 137. Consider the following transactions for Mittel Corporation: a. Sell common stock for $10,000. b. Purchase equipment for $11,500 cash c. Pay employee salaries of $3,700. e. Provides services to customers for $6,200 cash. 1. Post these transaction to the cash T-account. Assume the balance of cash before these transaction is $4,200. 2. Calculate the ending balance of cash. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Medium Learning Objective: 5 2-87 Chapter 002 The Accounting Information System Key 138. Use the following information to prepare a trial balance. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Knowledge Difficulty: Hard Learning Objective: 6 2-88 Chapter 002 The Accounting Information System Key 139. Describe the difference between external events and internal events and give two examples of each. External events involve an exchange between the company and a separate economic entity. Examples include purchasing office supplies on account or borrowing money from a bank. Internal events directly affect the financial position of the company but do not involve exchange transactions with another entity. Examples include depreciation of equipment or use of supplies. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Synthesis Difficulty: Medium Learning Objective: 1 140. Describe the six steps in the measurement process of external transactions. The six steps include: (1) Use source documents to identify accounts affected by external transactions, (2) analyze the impact of the transaction on the accounting equation, (3) assess whether the impact of the transaction results in a debit or credit to the account balance, (4) record transactions using debits and credits, (5) post the transaction to the T-accounts in the general ledger, and (6) prepare a trial balance. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Synthesis Difficulty: Medium Learning Objective: 1 141. Explain what it means that external transactions have a dual effect. Dual effect refers to each transaction having at least two effects on the accounting equation. If an economic event increases (decreases) one side of the equation, then it also increases (decreases) the other side of the equation by the same amount. Or the economic event increases one element and decreases another element by an equal amount, both on the same side of the accounting equation. AACSB: Reflective Thinking AICPA: Measurement Bloom's: Synthesis Difficulty: Medium Learning Objective: 2 2-89 Chapter 002 The Accounting Information System Key Listed below are ten terms followed by a list of phrases that describe or characterize five of the terms. Match each phrase with the correct term by placing the letter designating the best term in the space provided by the phrase. Terms: a. Assets b. Debit c. Journal entry d. Liabilities e. Revenues f. Expenses g. Credit h. General ledger i. Trial balance j. Dividends 142. ____ Refers to the right side of an account. g AACSB: Reflective Thinking AICPA: Measurement Bloom's: Comprehension Difficulty: Medium Learning Objective: 2 Learning Objective: 3 Learning Objective: 4 Learning Objective: 6 143. ____ Convention used to record transactions of a company. c AACSB: Reflective Thinking AICPA: Measurement Bloom's: Comprehension Difficulty: Medium Learning Objective: 2 Learning Objective: 3 Learning Objective: 4 Learning Objective: 6 2-90 Chapter 002 The Accounting Information System Key 144. ____ Resources earned by providing goods and services to customers. e AACSB: Reflective Thinking AICPA: Measurement Bloom's: Comprehension Difficulty: Medium Learning Objective: 2 Learning Objective: 3 Learning Objective: 4 Learning Objective: 6 145. ____ Resources owned by a company. a AACSB: Reflective Thinking AICPA: Measurement Bloom's: Comprehension Difficulty: Medium Learning Objective: 2 Learning Objective: 3 Learning Objective: 4 Learning Objective: 6 146. ____ List of all accounts and their balances after external transactions are recorded. i AACSB: Reflective Thinking AICPA: Measurement Bloom's: Comprehension Difficulty: Medium Learning Objective: 2 Learning Objective: 3 Learning Objective: 4 Learning Objective: 6 2-91 Chapter 002 The Accounting Information System Key Listed below are ten terms followed by a list of phrases that describe or characterize five of the terms. Match each phrase with the correct term by placing the letter designating the best term in the space provided by the phrase. Terms: a. Assets b. Debit c. Journal entry d. Liabilities e. Revenues f. Expenses g. Credit h. General ledger i. Trial balance j. Dividends 147. ____ Asset and expense accounts normally have this type of balance. b AACSB: Reflective Thinking AICPA: Measurement Bloom's: Comprehension Difficulty: Medium Learning Objective: 2 Learning Objective: 3 Learning Objective: 5 148. ____ Contains all the accounts of a company. h AACSB: Reflective Thinking AICPA: Measurement Bloom's: Comprehension Difficulty: Medium Learning Objective: 2 Learning Objective: 3 Learning Objective: 5 2-92 Chapter 002 The Accounting Information System Key 149. ____ Costs to generate revenues. f AACSB: Reflective Thinking AICPA: Measurement Bloom's: Comprehension Difficulty: Medium Learning Objective: 2 Learning Objective: 3 Learning Objective: 5 150. ____ Resources owed by a company. d AACSB: Reflective Thinking AICPA: Measurement Bloom's: Comprehension Difficulty: Medium Learning Objective: 2 Learning Objective: 3 Learning Objective: 5 151. ____ Payments to stockholders. j AACSB: Reflective Thinking AICPA: Measurement Bloom's: Comprehension Difficulty: Medium Learning Objective: 2 Learning Objective: 3 Learning Objective: 5 2-93

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Academy of Design Tampa - ECE - 567
lysis. Table VII shows the input including the rated capacity and the peak load that these three network elements carry. The same load proļ¬le [16] is assumed for all three network elements. It is to be noted that the HSS, the CSCF, and the TAS are
The University of Oklahoma - ACCT - 2113
Chapter 004 Cash and Internal ControlsTrue / False Questions1. Managers of the company act as stewards or caretakers of the company's assets.True False2. Common types of financial statement fraud include creating fictitious revenues from aphantom cus
The University of Oklahoma - ACCT - 2113
Chapter 005 ReceivablesTrue / False Questions1. Credit sales transfer products and services to a customer today while bearing the risk ofcollecting payment from that customer in the future.True False2. At the time of a credit sale, a company would re
The University of Oklahoma - ACCT - 2113
Chapter 006 InventoryTrue / False Questions1. Inventory is usually reported as a long-term asset in the balance sheet.True False2. Cost of goods sold is an asset reported in the balance sheet and inventory is an expensereported in the income statemen
The University of Oklahoma - ACCT - 2113
Chapter 007 Long-Term AssetsTrue / False Questions1. The CEO, as head of the company, is ultimately responsible for the firm's accounting.True False2. We record a long-term asset at its cost less all expenditures necessary to get the asset readyfor u
The University of Oklahoma - ACCT - 2113
Chapter 008 Current LiabilitiesTrue / False Questions1. Delta, Northwest, and United Airlines have all, at one time, filed for bankruptcy.True False2. In a classified balance sheet, we categorize all liabilities as current.True False3. Commonly, cur
The University of Oklahoma - METR - 1014
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The University of Oklahoma - METR - 1014
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The University of Oklahoma - METR - 1014
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The University of Oklahoma - METR - 1014
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The University of Oklahoma - METR - 1014
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The University of Oklahoma - METR - 1014
123456789101112131415161718192021222324252627282930313212345678910111213141516171819202122232425
The University of Oklahoma - METR - 1014
12345678910111213141516171819202122232425262728293031123456789101112131415161718192021222324
The University of Oklahoma - METR - 1014
12345678910111213141516171819202122232425262728293031323334353637123456789101112131415161718192021222324252627282930
The University of Oklahoma - METR - 1014
12345678910111213141516171819202112345678910111213141516
The University of Oklahoma - METR - 1014
1234567891011121314151617181920212223241234567891011121314151617
The University of Oklahoma - METR - 1014
123456789101112131415161718192021222324252627123456789101112131415161718192021
The University of Oklahoma - METR - 1014
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The University of Oklahoma - METR - 1014
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The University of Oklahoma - METR - 1014
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The University of Oklahoma - ACCT - 2123
Chapter 003, Systems Design: Job-Order CostingQuestionTypeDifficultyLO1:Jobordervsprocesscosting1T/FEx2T/FEx3T/FEx4T/FEx5T/FEx67T/FT/FEMLO4:FlowofcostsandjournalentriesxLO2:Joborderingcostin
The University of Oklahoma - ACCT - 2123
123456789101112131415161718192021222324MEMMEMMEMEMEMMEMEMMEEMEHProfessional Exam AdaptedLO9: Multiproduct CVPLO8: Operating leverageLO7: Margin of safetyLO6: Break-even analysisLO5: Target profit analys
The University of Oklahoma - ACCT - 2123
12345678910111213141516171819Professional Exam AdaptedLO5: Product and customer marginsLO4: Second-stage allocationLO3: Activity ratesLO2: First-stage allocationLO1: ABC conceptsQuestionTypeT/FT/FT/FT/FT/FT/FT/FT/FT/FT/
The University of Oklahoma - ACCT - 2123
Chapter 08 - Profit PlanningChapter 08Profit PlanningTrue / False Questions1. The production budget is typically prepared prior to the sales budget.True False2. One benefit of budgeting is that it coordinates the activities of the entire organizatio
The University of Oklahoma - ACCT - 2123
Chapter 10 - Standard Costs and VariancesChapter 10Standard Costs and VariancesTrue / False Questions1. The materials price variance is computed by multiplying the difference between the actualprice and the standard price by the actual quantity of ma
The University of Oklahoma - ACCT - 2123
Chapter 12 - Differential Analysis: The Key to Decision MakingChapter 12Differential Analysis: The Key to Decision MakingTrue / False Questions1. Future costs that do not differ among the alternatives are not relevant in a decision.True False2. Fixe
The University of Oklahoma - ACCT - 2123
123456789101112131415161718MMMEHMMEMEMEEExxMxxMxxMMxxProfessional Exam AdaptedLO6: Simple rate of returnLO5: PaybackLO4: Preference rankingLO3: Uncertain cash flowsLO2: Internal rate of returnLO1: Net pres
The University of Oklahoma - FIN - 3303
Chapter 1The Scope of Corporate FinanceMULTIPLE CHOICE1.One of the tasks for financial managers when identifying projects thatincrease firm value is to identify those projects wherea.benefits are at least equal to the projects costs.b.taking the p
The University of Oklahoma - FIN - 3303
Chapter 2Financial Statement and Cash Flow AnalysisMULTIPLE CHOICE1.a.b.c.d.Which of the following items can be found on an income statement?Accounts receivableLong-term debtSalesInventoryANS: CPTS: 1DIF: EREF: 2.1 FinancialStatementsNAT:
The University of Oklahoma - FIN - 3303
Chapter 3The Time Value of MoneyMULTIPLE CHOICE1.Which of the following cannot be calculated?a.b.c.d.Present value of an annuity.Future value of an annuity.Present value of a perpetuity.Future value of a perpetuity.ANS: DPTS: 1DIF: EREF: 3.
The University of Oklahoma - FIN - 3303
Chapter 4Valuing BondsMULTIPLE CHOICE1.A 15-year, 8%, $1000 face value bond is currently trading at $958. The yieldto maturity of this bond must bea.less than 8%.b.equal to 8%.c.greater than 8%.d.unknown.ANS: CPTS: 1DIF: EREF: 4.2 Bond Pri
The University of Oklahoma - FIN - 3303
Chapter 5Valuing StocksMULTIPLE CHOICE1.a.b.c.d.The first public sale of company stock to outside investors is called a/anseasoned equity offering.shareholders meeting.initial public offering.proxy fight.ANS: CPTS: 1DIF: EREF: 5.5 Primary a
The University of Oklahoma - FIN - 3303
Chapter 6The Trade-Off Between Risk and ReturnMULTIPLE CHOICE1.a.b.c.d.Which of the following is an example of systematic risk?IBM posts lower than expected earnings.Intel announces record earnings.The national trade deficit is higher than expec
University of Phoenix - SCI - 251
The 5/20 rule is according to the Food Label and You video is if the food has5% or less of the daily value of a nutrient, isnt a good source of that nutrient but if it has20% or more is a better source of nutrients. Lets say you want to eat more protein
Kentucky - MKT - 390
Kentucky - MKT - 390
Kentucky - MKT - 390
Kentucky - MKT - 390
Sheridan College - MECH - 6511
Equation Sheetfr = NntfvTn=CRMR = wdfr A = (d(D-d)0.5 Tm=(L+A)/frPC = 3 z= (x-)/PCI= T/6 L(x)=k(x-N)2F = Appc = 45 + /2 - /2 = tanFs = Fc cos - Ft sinAs =tan =to wsin r cos 1 r sin S=FsAs = tan( - ) + cot
Sheridan College - MECH - 6511
MECH 421/ 6511Solution to assignment 1Due date: February 1st, 20121. A batch of annealed steel has just been received from the vendor. It is supposed to have atensile strength in the range 60,000 - 70,000 lb/in2. A Brinell hardness test in the receivi
Sheridan College - MECH - 6511
MECH 421/6511SOLUTION TO ASSIGNMENT 21. A bending operation is to be performed on 4.0 mm thick cold-rolled steel sheet that is 25mm wide and 100 mm long. The sheet is bent along the 25 mm direction, so that thebend is 25 mm long. The resulting sheet m
Sheridan College - MECH - 6511
MECH 421/ MECH 6511SOLUTION TO ASSIGNMENT 31. In a production turning operation, the workpart is 125 mm in diameter and 300 mm long. A feed of0.225 mm/rev is used in the operation. If cutting speed = 3.0 m/s, the tool must be changed every 5workparts;
Sheridan College - MECH - 6511
Taguchi Loss FunctionTaguchi defines quality as "the loss a product costssociety from the time the product is released forshipment"Loss includes costs to operate, failure to function,maintenance and repair costs, customerdissatisfaction, injuries ca
Sheridan College - MECH - 6511
Ahmed M. Deif: A System Model for Green ManufacturingFigure 2: Green manufacturing and competitive manufacturing strategies.3. GREEN MANUFACTURING AND SUSTAINABILITYThe definition of sustainability which is generally adopted is: meeting the needs of th
Sheridan College - MECH - 6511
Sheridan College - MECH - 6511
Sheridan College - MECH - 6511
Mechanical behavior of Polymer Composite MaterialsMECH 6581/MECH 422Final ExamOpen book, Open notes1.Question 1: (24 marks)A unidirectional composite layer is made of Kevlar/epoxy with 60% fiber volumefraction. The properties of Kevlar fiber are:E
Sheridan College - MECH - 6511
Sheridan College - MECH - 6511
Sheridan College - MECH - 6511
Sheridan College - MECH - 6511
Sheridan College - MECH - 6511
Sheridan College - MECH - 6511
Sheridan College - MECH - 6511
Sheridan College - MECH - 6511
Mechanical behavior of polymer compositesMECH 422/MECH 6581Mid term exam solutionFebruary 13, 2012Open book, Open notes1. Question 1: (20 marks)The plate has fibers along the y direction, while it is constrained along the x direction. It is aunidir
Sheridan College - MECH - 6511
Sheridan College - MECH - 6511
StressStrainAnalysisonBlocksmadeofdifferentisotropicmaterialsPresentationforProjectCStressAnalysisinMechanicalDesignMECH6441PresentedbyMuhammadRejaulKarim(5771412)HelalSarkar(4600576)JuanVasquez(4237285)JahirIqbalSiddique(3889858)MohammedHasanSa
Sheridan College - MECH - 6511
MECH 6441 STRESS ANALYSIS IN MECHANICAL DESIGNDr. R. GanesanPROBLEM SET 21. A 3-m by 2-m rectangular thin plate is deformed by the movement of point B to B asshown by the dashed lines in Figure. Determine (a) expressions for displacements, (b)strain
Sheridan College - MECH - 6511
StressStrainAnalysisofaBlockmadeofisotropicmaterialPresentationforProjectCStressAnalysisinMechanicalDesignMECH6441PresentedbyMd.ImranKhan(ID9752218)K.M.MostafizurRahman(ID9708146)EkramulKarim(ID9727485)SyedMdRokibUddin(ID5436397)FakhruddinAhm
Sheridan College - MECH - 6511
Bottom Edge constrainedFor point A, temp=0exx = 6.1000e-005eyy =-2.9667e-005ezz = 4.0000e-005gamxy =1.8600e-004gamyz = -9.6667e-006gamzx = -1.5400e-004sigmax = 17.5872sigmay = 3.0805sigmaz = 14.2272tauxy = 14.8800tauyz = -0.7733tauzx =-12.320
Sheridan College - MECH - 6511
Equations for displacements, strains and stresses for bottom edge of the rear faceconstrainedU =- (206603533625547*x^2)/147573952589676412928 (4785331369307907*x*y*z)/151115727451828646838272 (2007005755215931*x*y)/1180591620717411303424 +(112156203968