Question 4: The Sarbanes-Oxley Act refers to:
Question 5: The three types of business activities undertaken by all enterprises are:
Question 6: The sale of stock in a business is an example of what type of business activity?
Question 7: The accounting equation requires that:
Question 8: A higher ratio of liabilities to stockholders’ equity implies that a business is.
Question 9: A primary qualitative characteristic of accounting information is relevance.Relevance means that information should.

Question 10: The materiality concept is best described as:
Chapter 2: Homework
Question 1: Normal Balances
Account
Debit
Credit
Accounts Receivable
✔
Accounts Payable
✔
Dividends
✔
Wage Expense
✔
Inventory
✔
Interest Income
✔
Retained Earnings
✔
Question 2: Recording transactions with Accounting Equation
During the year, the Decker Company experienced the following accounting transactions:
1. Issued common stock in the amount of $100,000
2. Paid a $30,000 cash dividend
3. Borrowed $25,000 from a bank
4. Made a principal payment of $2,500 on an outstanding bank loan
5. Made an interest payment of $1,200 on an outstanding bank loan
Cash
=
Notes Payable
+
Common Stock
+
Retained Earnings
1
100,000
100,000
2
(30,000)
(30,000)
3
25,000
25,000
4
(2,500)
(2,500)
5
(1,200)
(1,200)

Question 3 – Part A: During the year, the Decker Company experienced the following accounting transactions:1. Issued common stock in the amount of $100,0002. Paid a $30,000 cash dividend3. Borrowed $25,000 from a bank4. Made a principal payment of $2,500 on an outstanding bank loan5. Made an interest payment of $1,200 on an outstanding bank loan
General Journal
#
Description
Debit
Credit
1
Cash
100,000
Common Stock
100,000
2
Retained Earnings
30,000
Cash
30,000
3
Cash
25,000
Notes Payable
25,000
4
Retained Earnings
2,500
Cash
2,500
5
Retained Earnings
1,200
Cash
1,200
Question 3- Part B: Separated T- Charts.
Cash
Common Stock
100,000
Notes Payable
2,500
25,000
Retained Earnings
2,500
100,000
30,000
25,000
2,500
1,200

1,200
Question 4: Trial Balance
General Information
Trial Balance
Accounts
Debit
Credit
Cash
6,000
0
Accounts Receivable
10,800
0
Equipment
30,000
0
Accounts Payable
0
6,000
Common Stock
0
36,000
Dividends
2,400
0
Sales Revenue
0
17,200
Administrative
Expense
8,000
0
Utilities Expense
2,000
0
Totals
59,200
59,200


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- Fall '15
- Accounting, Financial Accounting, Balance Sheet, Decision Making, Generally Accepted Accounting Principles, Accounting Review, Basic Accounting Questions, Basic Accounting Equation Examples