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Several Events Are Listed Below

Question 128

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Several events are listed below.Indicate whether each event is an external event that should be recorded as a transaction,an internal event that should be recorded as a transaction,or an event that should not be recorded

Premises:

Responses:

An order is placed with a supplier for merchandise.

E-External event to be recorded as a transaction

Common stock is issued to investors.

I-Internal event to be recorded as a transaction

Cash sales are made.

NR-An event that should NOT be recorded

Raw materials are entered into production.

Federal income tax returns are prepared by the company's accountant.

Bills are received for utility expenses.

Payment is received from customers to whom merchandise had been sold on credit.

Money collected from cash and credit customers is deposited in the company's checking account at a local bank.

Premises:

An order is placed with a supplier for merchandise.

Common stock is issued to investors.

Cash sales are made.

Raw materials are entered into production.

Federal income tax returns are prepared by the company's accountant.

Bills are received for utility expenses.

Payment is received from customers to whom merchandise had been sold on credit.

Money collected from cash and credit customers is deposited in the company's checking account at a local bank.

Responses:

E-External event to be recorded as a transaction

I-Internal event to be recorded as a transaction

NR-An event that should NOT be recorded

Correct Answer:

Premises:

Responses:

An order is placed with a supplier for merchandise.

Common stock is issued to investors.

Cash sales are made.

Raw materials are entered into production.

Federal income tax returns are prepared by the company's accountant.

Bills are received for utility expenses.

Payment is received from customers to whom merchandise had been sold on credit.

Money collected from cash and credit customers is deposited in the company's checking account at a local bank.