Concept explainers
Listed below are several terms and phrases associated with the measurement process for external transactions.
Identify terms associate with the measurement process (LO2–1)
List A | List B |
_____ 1. Account _____ 2. Analyze transactions _____ 3. Journal _____ 4. Post _____ 5. |
a. Record of all transactions affecting a company. b. Determine the dual effect of business events on the c. List of accounts and their balances. d. Summary of the effects of all transactions related to a particular item over a period of time. e. Transfer balances from the journal to the general ledger. |
Required:
Pair each item from List A with the item from List B to which it is most appropriately associated.
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FINANCIAL ACCOUNTING W/ACCESS >CI<
- PURPOSE OF ACCOUNTING Match the following users with the information needed. 1. Ownersa. Whether the firm can pay its bills on time 2. Managersb. Detailed, up-to-date information to measure business performance (and plan for future operations) 3. Creditorsc. To determine taxes to be paid and whether other regulations are met 4. Government agenciesd. The firms current financial conditionarrow_forwardWhat is the accounting equation? List two examples of business transactions, and explain how the accounting equation would be impacted by these transactions.arrow_forwardACCOUNTING PROCESS Match the following steps of the accounting process with their definitions. Analyzinga. Telling the results Recordingb. Looking at events that have taken place and thinking about how they affect the business Classifying Summarizingc. Deciding the importance of the various reports Reportingd. Aggregating many similar events to provide information that is easy to understand Interpretinge. Sorting and grouping like items together f. Entering financial information into the accounting systemarrow_forward
- Read each definition below and write the number of the definition in the blank beside the appropriate term. The quiz solutions appear at the end of the chapter. Event External event Internal event Transaction Source document Account Chart of accounts General ledger Debit Credit Double-entry system Journal Posting Journalizing General journal Trial balance A numerical list of all accounts used by a company. A list of each account and its balance; used to prove equality of debits and credits. A happening of consequence to an entity. An entry on the right side of an account. An event occurring entirely within an entity. A piece of paper that is used as evidence to record a transaction. The act of recording journal entries. An entry on the left side of an account. The process of transferring amounts from a journal to the ledger accounts. An event involving interaction between an entity and its environment. A record used to accumulate amounts for each individual asset, liability, revenue, expense, and component of stockholders equity. A book, a file, a hard drive, or another device containing all of the accounts. A chronological record of transactions. Any event that is recognized in a set of financial statements. The journal used in place of a specialized journal. A system of accounting in which every transaction is recorded with equal debits and credits and the accounting equation is kept in balance.arrow_forwardThe step-by-step process to record business activities and events to keep financial records up to date is ________. A. day-to-day cycle B. accounting cycle C. general ledger D. journalarrow_forwardAccounting concepts Match each of the following statements with the appropriate accounting concept. Sonic concepts may he used more than once, while others may not be used at all. Use the notat ions shown to indicate the appropriate accounting concept. Statements 1. Assume that a business will continue forever. 2. Material litigation involving the corporation is described in a note. 3. Monthly utilities costs are reported as expenses along with the monthly revenues. 4. Personal transactions of owners are kept separate from the business. 5. This concept supports relying on an independent actuary (statistician), rather than the chief operating officer of the coq)ration, to estimate a pension liability. 6. Changes in the use of accounting methods from one period to the next are described in the notes to the financial statements. 7. Land worth $800,000 is reported at its original purchase price of $220,000. 8. This concept justifies recording only transactions that are expressed in dollars. 9. If this concept was ignored, the confidence of users in the financial statements could not be maintained. 10. The changes in financial condition are reported at the end of the month.arrow_forward
- List the three basic questions that must be answered when analyzing the effects of a business transaction on the accounting equation.arrow_forwardIndicate what impact the following transactions would have on the accounting equation, . Table 3.10arrow_forwardProvide the missing amounts of the accounting equation for each of the following companies.arrow_forward
- Which of the following pairs of accounts are impacted the same with debits and credits? A. Cash and Unearned Service Revenue B. Electricity Expense and Office Supplies C. Accounts Receivable and Accounts Payable D. Buildings and Common Stockarrow_forwardWhich of the following statements is true? a. Every transaction is recorded as an increase and/or decrease in only one account. b. One side of the equation does not need to equal the other side of the equation. c. Double-entry accounting is demonstrated by the fact that each transaction must be recorded in at least two accounts. d. When a business earns revenue, owners equity decreases.arrow_forwardA __________ is a book in which business transactions are recorded. a. journal b. ledger c. trial balance d. balance sheetarrow_forward
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