Exam 2: The Accounting Information System

Hesson Properties, Inc.The following transactions occurred during June: -Refer to Hesson Properties. What journal entry is required to record the cash collected in advance?

The International Accounting Standards Board (IASB) was created in order to develop worldwide accounting standards that are required for all financial statements, regardless of the country where the financial statements were prepared.

Services are provided for customers who pay for their services immediately. What effect does this transaction have on the accounting equation?

Each of the situations in A through C below applies to one of the assumptions or principles included in the conceptual framework of accounting. Identify which assumption or principles applies and explain why that assumption or principle applies. A)High Collectibles is a U.S. company that has divisions in several countries around the world. Each country has a currency different that the U.S. dollar. The company must include the financial data of its worldwide divisions in its financial statements. B)Howell Trucking operate as a partnership. The partners are considering a change to the corporate form of business organization. C)Holly Company is a local company. The owners have decided to expand into nearby cities. Expansion will require more capital, but management does not expect it will stay in business for more than one year or so regardless of its expansion plans.

H&R Clock Company The following transactions were incurred during July 2019: -Refer to H&R Clock Company. Prepare a trial balance in proper format. Assume that the company had no additional accounts or balances other than those created from the July transactions.

Heart & Hands Clinic began business as a corporation in the current year. Several transactions which occurred early in the year are described below. Record each transaction in proper journal form, excluding written explanations.

H&R Clock Company The following transactions were incurred during July 2019: -Refer to H&R Clock Company. Record each transaction in proper journal entry format in the journal provided. A written explanation for each journal entry is not required.

Which of the following transactions affects total liabilities?

Listed below are selected accounts. In the blank spaces provided for each account, indicate what type of account it is, its normal balance, and the debit/credit rules for increasing and decreasing it. Use the following abbreviations for your answer:

Two friends decide to launch a new business by investing $25,000 each in Hot Spot Tanning. They are given shares of stock as evidence of their ownership interest. What effect does this transaction have on the accounting equation?

GAAP has established a universal chart of accounts that is applicable to all businesses in the United States.

Described below are several transactions which might be recorded by a music supply company. Several accounts from the company's chart of accounts are also listed below. Using these account titles, record each transaction in proper journal entry format. A written explanation for each journal entry is not required. A)Bills are mailed for musical instruments sold to customers, $225,000 B)Customers pay for musical instruments in advance, $130,000 C)Administrative employees are paid their monthly salaries, $14,000 D)An invoice is received for $15,200 of new musical instruments purchased for sale to customers; payment is due in 30 days E)Payments are received from customers for amounts billed in a previous transaction, $135,000 F)Full payment is made for the musical instruments invoice received in a previous transaction

The Securities Exchange Commission (SEC) is concerned with

____________________ is the quality of accounting information that makes it dependable in representing the events that it purports to represent.

Happy Heights Country Club Selected accounts at July 31 are provided below: -Refer to Happy Heights Country Club. Which of the following describes the transactions which occurred on July 7th?

If a company made a payment on account, then assets and liabilities would both decrease.

A consulting firm provided services last month and billed its client. This month, the company received payment from the customer. What impact does this month's transaction have on the firm's working capital?

The purchase of office equipment on credit has what effect on the accounting equation?

Several terms which represent components of an accounting system are listed below. For each term, write a brief explanation of how that component is used in the accounting cycle. A)Accounts B)Chart of Accounts C)Double-entry system with debits and credits D)Journal E)General Ledger F)Trial Balance

Dividends are declared and paid to the company's stockholders. What effect does this transaction have on the company's accounting equation?