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Financial Accounting, 10e (Harrison/Horngren/Thomas)

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Financial Accounting, 10e (Harrison/Horngren/Thomas) Chapter 2 Transaction Analysis 2.1 Learning Objective 2-1 1) A transaction is any event that has a financial impact on the business and that can ... be measured reliably. Answer: TRUE Diff: 1 2) Which of the following is NOT a business transaction? A) A company buys goods on account. B) A company sells land for cash. C) A company fired 10 percent of the employees due to lackluster sales. D) A company borrows money from the bank. Answer: C 2.2 Learning Objective 2-2 1) The account is the basic summary device used in accounting. Answer: TRUE 2) An accounts receivable usually specifies an interest rate. Answer: FALSE 3) Assets include cash, land, and accounts payable. Answer: FALSE 4) Prepaid expenses are an asset. Answer: TRUE 5) A record of all the changes in a particular asset during a period of time is found in a(n): A) transaction. B) trial balance. C) prior period's balance sheet. D) account. Answer: D 6) All of the following accounts would be considered assets EXCEPT for: A) Cash. B) Retained Earnings. C) Prepaid Expenses. D) Notes Receivable. Answer: B 7) Which account includes bank account balances in multiple checking accounts? A) Accounts Receivable B) Notes Receivable C) Cash D) Prepaid Expenses Answer: C 8) Which of the following is a CORRECT statement? A) Shareholders' equity is also called Proprietorship Equity. B) A proprietorship has more than one capital account. C) A partnership has a separate owner's equity account for each partner. D) Retained earnings is the owner's investment in the corporation. Answer: C 9) Notes payable, accounts payable, taxes payable and salaries payable are all examples of: A) liabilities. B) revenues. C) expenses. D) assets [Show More]

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