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Several accounts from the financial records of Wynn Linders, Inc. are listed. Indicate its normal balance and the debit/credit rules for increasing the account. (Choices may be used more than once.) a.Debit b.Credit -Common Stock

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If a company performed services for credit, then the debit side of the journal entry would be to Accounts Payable and the credit would be to Service Revenue.

A) True
B) False

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____________________ is the magnitude of an omission or misstatement in accounting information that will influence the decision of someone relying on the information.

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Selected accounts at July 31 are provided below: Selected accounts at July 31 are provided below: -Refer to Hesson Properties. What journal entry is required to record the collections on account from customers? A) Cash 500 Accounts Receivable 500 B) Accounts Receivable 500 Service Revenue 500 C) Accounts Payable 500 Cash 500 D) Service Revenue 500 Cash 500 Selected accounts at July 31 are provided below: -Refer to Hesson Properties. What journal entry is required to record the collections on account from customers? A) Cash 500 Accounts Receivable 500 B) Accounts Receivable 500 Service Revenue 500 C) Accounts Payable 500 Cash 500 D) Service Revenue 500 Cash 500 -Refer to Hesson Properties. What journal entry is required to record the collections on account from customers?


A) Cash 500 Accounts Receivable 500
B) Accounts Receivable 500 Service Revenue 500
C) Accounts Payable 500 Cash 500
D) Service Revenue 500 Cash 500

E) All of the above
F) A) and C)

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Which pair of accounts has the same set of procedures for debit and credit entries?


A) service revenue and rent expense
B) dividends and retained earnings
C) equipment and salary expense
D) accounts receivable and accounts payable

E) A) and B)
F) A) and C)

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Selected accounts at July 31 are provided below: Selected accounts at July 31 are provided below: -Refer to HVAC Service. The journal entry to record payment for the office equipment and supplies will include a debit to A) salary expense. B) salaries payable. C) prepaid expenses. D) accounts payable. Selected accounts at July 31 are provided below: -Refer to HVAC Service. The journal entry to record payment for the office equipment and supplies will include a debit to A) salary expense. B) salaries payable. C) prepaid expenses. D) accounts payable. -Refer to HVAC Service. The journal entry to record payment for the office equipment and supplies will include a debit to


A) salary expense.
B) salaries payable.
C) prepaid expenses.
D) accounts payable.

E) C) and D)
F) B) and C)

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"You Decide" Essay A customer has called complaining that he paid for a service call last week and is still waiting for a serviceman to come out and repair his air conditioning unit. You are now curious as to how much work your service team has been paid for but still remains undone. You notice the bookkeeper has left the company's general journal and general ledger open on the desk so that he can do the monthly posting when he returns from lunch. Using those two items, how can you satisfy your curiosity?

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First, find the beginning of the period'...

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Select the organization that most closely achieves the role described. (Choices may be used more than once.) a.Financial Accounting Standards Board (FASB) b.International Accounting Standards Board (IASB) c.Securities and Exchange Commission (SEC) -Has the ultimate authority to set accounting standards, but has allowed the profession to do so.

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Select the choice that describes the type of transaction and whether it should be recorded in the accounting system. (Choices may be used more than once.) a.External event to be recorded as a transaction b.Internal event to be recorded as a transaction c.Event which should not be recognized in the accounting system -Payments are received from customers to whom merchandise was sold on credit.

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Which of the following is an internal event?


A) Caddie salaries are paid by a country club.
B) Dividends are distributed to a company's stockholders.
C) Potatoes used to make French fries in a fast-food restaurant are purchased.
D) Products are transferred from the assembly area to the painting station.

E) B) and D)
F) A) and C)

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Which of the following statements is true concerning assets?


A) Assets are measured using a time-period approach.
B) Assets are initially recorded at market value and then adjusted for inflation.
C) Assets are initially recorded using the historical cost principle.
D) Assets are initially recorded at market value, since historical cost tends to be too arbitrary.

E) A) and D)
F) All of the above

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Match the following terms with their correct definition. a.Account f.Debit b.Accounting cycle g.Event c.Chart of accounts h.General ledger d.Cost vs. benefit i.Journal e.Credit j.Trial balance -It does not make good business sense to spend $100 to save $75.

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For each transaction provided, choose the appropriate account from the list that would receive a debit entry as a result of the transaction. (Choices may be used more than once.) a.Cash b.Accounts receivable c.Supplies d.Prepaid insurance e.Land f.Equipment g.Accounts payable h.Unearned revenues i.Notes payable j.Common stock k.Retained earnings l.Service revenue m.Salary expense n.Insurance expense o.Utilities expense p.Dividends -Paying salaries to employees

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Selected accounts at July 31 are provided below: Selected accounts at July 31 are provided below: -Refer to Hesson Properties. What journal entry is required to record the utility bill? A) Utilities Expense 300 Cash 300 B) Accounts Receivable 300 Utilities Expense 300 C) Utilities Expense 300 Accounts Payable 300 D) Cash 300 Utilities Expense 300 Selected accounts at July 31 are provided below: -Refer to Hesson Properties. What journal entry is required to record the utility bill? A) Utilities Expense 300 Cash 300 B) Accounts Receivable 300 Utilities Expense 300 C) Utilities Expense 300 Accounts Payable 300 D) Cash 300 Utilities Expense 300 -Refer to Hesson Properties. What journal entry is required to record the utility bill?


A) Utilities Expense 300 Cash 300
B) Accounts Receivable 300 Utilities Expense 300
C) Utilities Expense 300 Accounts Payable 300
D) Cash 300 Utilities Expense 300

E) A) and D)
F) All of the above

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Which of the following is an assumption made in the preparation of the financial statements?


A) Financial statements are prepared for a specific entity that is distinct from the entity's owners.
B) The current market value is assumed to be more relevant than the original cost paid.
C) The preparation of financial statements for a specific time period assumes that the balance sheet covers a designated period of time.
D) Financial statements are prepared assuming that inflation has a distinct effect on the monetary unit.

E) B) and D)
F) B) and C)

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Which of the following statements is true?


A) An entry in a general ledger account can be traced to the trial balance by referring to the page listed in the posting reference column of that ledger account.
B) The posting of an amount recorded in the general ledger can be verified by referring to the account number listed in the posting reference column on that line in the general journal.
C) Business transactions are recorded first in the general ledger, then that information is transferred to the general journal.
D) No explanation is needed for each entry in the general ledger.

E) C) and D)
F) B) and C)

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Which pair of accounts has the same set of rules for debit and credit entries?


A) common stock and accounts payable
B) salary expense and retained earnings
C) cash and notes payable
D) sales revenue and accounts receivable

E) A) and B)
F) None of the above

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If a law firm provides services on account for its clients, both ____________________ and retained earnings will increase.

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Payment is made for the telephone bill which was recorded previously. What effect does this transaction have on the accounting equation?


A) Assets and liabilities increase.
B) Assets and retained earnings increase.
C) Liabilities increase and contributed decreases.
D) Assets and liabilities decrease.

E) All of the above
F) C) and D)

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-Refer to H&R Clock Company. Set up T-accounts and post each transaction to the T-accounts. -Refer to H&R Clock Company. Set up T-accounts and post each transaction to the T-accounts.

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