Exam 2: The Accounting Information System

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 -Purchasing a 6-month insurance policy

Under the double-entry system of accounting, every transaction is entered in at least two accounts on opposite sides of a T-account.

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

The payment of employee salaries has what effect on the accounting equation?

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 time-period assumption assumes that a company prepares its financial statements every month.

The ____________________ is the U.S. federal government agency with the ultimate authority to determine the accounting rules for companies whose stock is sold to the public.

Which of the following accounts is decreased by a debit entry?

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.

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.

-Refer to Hatcher Tool Service. Set up T-accounts and post each transaction to the T-accounts.

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 -Term used to refer to the right side of an account.

Several transactions are listed. Use the choices to identify the effect on the accounting equation for each transaction listed. (Choices may be used more than once.) a.Assets and liabilities increase b.Assets and contributed capital increase c.Assets and retained earnings increase d.Two asset accounts are impacted, but there is no net effect on total assets e.Assets and liabilities decrease f.Assets and retained earnings decrease g.Liabilities increase and retained earnings decrease h.Liabilities decrease and retained earnings increase -Paying dividends to investors

Because it tends to provide the most reliable measure of activity, all assets are reported on the balance sheet at their fair market values.

In order for accounting information to be useful in making informed decisions, it must be

Selected accounts at July 31 are provided below: -Refer to Hesson Properties. What journal entry is required to record the purchase of the carts?

All of the following accounts have normal debit balances except

Several transactions are listed. Use the choices to identify the effect on the accounting equation for each transaction listed. (Choices may be used more than once.) a.Assets and liabilities increase b.Assets and contributed capital increase c.Assets and retained earnings increase d.Two asset accounts are impacted, but there is no net effect on total assets e.Assets and liabilities decrease f.Assets and retained earnings decrease g.Liabilities increase and retained earnings decrease h.Liabilities decrease and retained earnings increase -Purchasing supplies on credit

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 for items previously purchased on credit

Selected accounts at July 31 are provided below: -Refer to HVAC Service. The journal entry to record the purchase of office equipment and supplies will include a credit to