Final Review

Final Review - Debits increase assets and expense accounts...

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Debits increase assets and expense accounts and decrease liability and rev  accounts Credits increase liability and rev accounts and decrease assets and expense  accounts FINAL REVIEW 1) Which of the following statements is always true? a) The chart of accounts lists account names and amounts. b) The chart of accounts lists account names and numbers. c) The chart of accounts identifies transactions to be recorded. d) The chart of accounts is one of the basic financial statements. 2) Which of the following is an example of an observable external event? a) Interest cost on a bank loan, as time passes b) Manufacturing products c) Designing a new product d) A customer purchases a product 3) Which of the following does  not  demonstrate the “give and take” nature of  transactions? a) You pay an employee for work performed. b) A customer acquires and pays for merchandise. c) A shoplifter takes merchandise. d) You purchase supplies on credit. 4) Michelle Corporation received a $200,000 investment from a new  stockholder.  Which of the following best reflects the journal entry recorded? a) Debit cash, credit contributed capital b) Debit contributed capital, debit cash c) Debit retained earnings, credit contributed capital d) Debit cash, credit retained earnings e) Debit cash, credit investments by new stockholder. Instructor’s Manual, Chapter 2 2.1
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5) Sonic Corporation acquired a new machine.  It signed a note to pay for the  machine over a 5-year period.  Which of the following best reflects the journal  entry recorded? a) Debit cash, credit machine b) Debit machine, credit cash c) Debit machine, credit note payable d) Debit machine, credit retained earnings 2.2 Fundamentals of Financial Accounting
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6) Anchor Banker Co. acquired $500 worth of supplies on credit.  Which of the  following journal entries would be recorded? a) Debit supplies, credit cash b) Debit cash, credit supplies c) Debit supplies, credit accounts payable d) Debit accounts payable, credit supplies payable 7) Dave Company borrowed $70,000 from the bank.  Which of the following  accounts would be affected? a) Cash b) Equipment c) Stockholders’ Equity d) Accounts Payable 8) Which of the following statements is  not  true? a) When in doubt, use the most optimistic measurement of assets and  liabilities. b) Do not record unidentified transactions on the balance sheet. c) Current assets are likely to be used up or turned into cash within a 12- month period. d) Assets must always equal liabilities plus stockholders’ equity.
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This note was uploaded on 04/07/2008 for the course ACCT 201 taught by Professor Shleifer during the Fall '08 term at Clemson.

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Final Review - Debits increase assets and expense accounts...

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