Exam 2: The Accounting Information System

Hatcher Tool Service The following transactions occurred during June 2019: -Refer to Hatcher Tool Service. Indicate the economic effects of each transaction above on the accounting equation. Use the following format for your answers. Show the dollar amounts in the appropriate columns and use a plus (+) sign to indicate an increase and a minus (−) sign to indicate a decrease.

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

A trial balance is the listing of each active account and its corresponding debit or credit balance at a particular point in time.

All of the following are external events except

The ___________________ is a list of each active account and its debit or credit balance at a specific point in time.

The payment of a dividend increases both cash and stockholders' equity of the distributing entity.

Only events that can be measured with sufficient reliability will be recognized in the accounting system.

The general ledger is an example of a book of original entry.

Which of the following is a constraint to the qualitative characteristics of useful accounting information?

Several accounts from the financial statements of Hotlanta Promotions, Inc. are listed below. In the two columns provided for answers, indicate the type of account and the normal account balance. Use the following identification codes for your answers:

The general ledger is often used for the initial recording of repetitive transactions.

Which of the following statements is true?

In order for an internal or external event to be recognized in an accounting system, the items making up the event must impact the financial statements and they must be sufficiently reliable and ____________________.

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

For a company's reported financial information to be useful, what four qualities must be present? Explain these four qualities.

All of the following accounts have normal debit balances except

The correct term for the entry made on the left side of a T-account is

The T-accounts presented below are taken from the general ledger of Health Force Corporation on March 31, 2019. Determine the balance of each account and present them in proper trial balance format.

A company's current ratio is 2.00. If the company makes a payment on account, what is the effect on the current ratio?

Which of the following organizations is primarily responsible for establishing GAAP in the United States?