Exam 3: Processing Accounting Information

One effect on the accounting equation when a firm borrows money is:

Which of the following transactions does not affect the total assets of Horizon Sailing Corp.?

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

A trial balance can be distributed to stockholders in place of the balance sheet.

Each account has a normal balance. For the following list of accounts, indicate whether the normal balance of each is a debit or a credit. -Capital Stock

The use of equipment in a company is an external event.

Each account has a normal balance. For the following list of accounts, indicate whether the normal balance of each is a debit or a credit. -Cash

Each account has a normal balance. For the following list of accounts, indicate whether the normal balance of each is a debit or a credit. -Dividends

Choose from the following list of account titles the one that most accurately fits the description of that account or is an example of that account. An account title may be used more than once or not at all. -Claims by the owners on the undistributed net income of a business

Presented below are a list of source documents and a list of transactions. Using the identification letters before each source document, indicate next to each transaction which source document serves as evidence for the recording of the transaction. Source Documents A Purchase invoice B Sales invoice C Cash register tape D Check E Time card F Monthly statement G Promissory note H Stock certificate Transactions _____ 1 Supplies are purchased on credit. _____ 2 Cash sales are made to customers. Land is acquired by signing an agreement to pay a stated amount plus interest in one year. Utilities expense is recorded for the current month. The weekly payroll is paid. Merchandise is sold to a customer on account. Payment is made for utility bills which were recorded earlier. Investors purchase additional shares of the company's stock directly from the company.

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

Choose from the following list of account titles the one that most accurately fits the description of that account or is an example of that account. An account title may be used more than once or not at all. -An amount owed by a customer

Briefly explain what accountants mean when they refer to the double-entry system of accounting.

Carl and Stefanie each invest $15,000 in a business and are given shares of stock in Thibeau Industries as evidence of their ownership interests. For this transaction, identify the effect on the accounting equation.

Choose from the following list of account titles the one that most accurately fits the description of that account or is an example of that account. An account title may be used more than once or not at all. -Corporate income taxes owed to the state government

The normal balance of the Dividends account is a credit.

All of the following accounts have normal debit balances except:

Each account has a normal balance. For the following list of accounts, indicate whether the normal balance of each is a debit or a credit. -Office Supplies

Which of the following entries causes a decrease in assets and in net income?

Identify which of the following would be recorded as external events, recorded as internal events, or not recorded. -A customer pays its open account.