32. When a company performs a service but has not yet received payment, it a.debits Service Revenue and credits Accounts Receivable.b.debits Accounts Receivable and credits Service Revenue.c.debits Service Revenue and credits Accounts Payable.d.makes no entry until cash is received. 33. Assets normally show 34. A credit to a liability account Fall 2016 - BUA 201 (Principles of Financial Accounting) – Review file for Exam 1 pg. 6
35. When collection is made on Accounts Receivable, 36. On March 1, 2017, Freeze Company hires a new employee who will start to work onMarch 6. The employee will be paid on the last day of each month. Should a journal entrybe made on March 6? Why or why not? a.Yes, the company is now obligated to pay the employee, thus that event must berecorded.b.No, hiring an employee is an important event; however it is not an economic eventthat should be recorded.c.Yes, failure to record the event would cause the financial statements to be misleading.d.No, the financial position of the company has been changed, however, the dollaramount of the transaction is not yet known. 37. The usual sequence of steps in the transaction recording process is 38. Which of the following accounts has a normal credit balance? 39. A trial balance is a listing of 40. Customarily, a trial balance is prepared a.at the end of each day.b.after each journal entry is posted.c.at the end of an accounting period.d.only at the inception of the business.41. A trial balance proves Fall 2016 - BUA 201 ( Principles of Financial Accounting ) – Review file for Exam 1 pg. 7
Fall 2016 - BUA 201 (Principles of Financial Accounting) – Review file for Exam 1 pg. 8
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