Exam 2: Analyzing Business Transactions

Which of the following is not a measurement issue in accounting?

One can obtain a clear picture of a company's liquidity by referring to its income statement.

A decrease in a stockholders' equity account is recorded with a credit.

Which of the following gives the correct sequence of accounting procedures?

Which of the following statements is true about a journal entry?

When revenue has been earned,no entry is recorded until the related cash has been collected.

Which of the following is a business event that is not considered a recordable transaction?

The valuation issue deals with how the components of a transaction should be categorized.

To determine the balance of a particular account,one should refer to the

Office supplies are classified as an expense.

Briefly explain the difference between Unearned Art Fees and Art Fees Earned.

Purchase requisitions are recognized in the accounting records.

In a trial balance,all debits are listed before all credits.

When a company purchases goods that it will resell,it must record the goods in an expense account.

Here is the trial balance for McLeary Corporation: McLeary Corporation Trial Balance January 31, 2010 Cash \ 3,000 Accounts Receivable 2,000 Art Supplies 3,000 Office Supplies 5,000 Prepaid Rent 7,000 Prepaid Insurance 5,000 Art Equipment 5,000 Office Equipment 3,000 Accounts Payable \ 10,000 Common Stock 5,000 Retained Earnings 5,000 Dividends ? Advertising Fees Earned ? Wages Expense ? Utilities Expense 5,000 Telephone Expense 3,000 \A \B If the trial balance showed a balance of $8,000 in the Wages Expense account and a balance of $34,000 in the Advertising Fees Earned account,what would be the amount of A?

A dividend will reduce which of the following accounts?

Which of the following accounts probably would be listed after the others in a chart of accounts?

Generally,before Accounts Payable is debited,it is credited.

Dividends are classified as an expense.

An increase in an asset is recorded by a debit.