Q1. A _________is an event that affects the financial position of an enterprise; it changes an asset (A), liability (L), or stockholders’ equity (SE) account. A company is not liable for payment of supplies until the supplies (are ordered / _________). Therefore, an order (is / _________) a transaction and (is / _________) recorded. Because the arrival of supplies increases an asset and creates a liability this event (_________/ is not) a transaction and (_________/ is not) recorded.
Q2. Because a transaction consists of “give and take,” at least (one / _________/ three) accounts are always affected. Therefore, this method is referred to as (the give-‘n-take method / _________).
Q3. “Investors contribute $30,000 of cash in exchange for the common stock of a company” (_________ / is not) a transaction that affects (_________/ accounts receivable) and (retained earnings / _________). Cash is a(n) (_________/ L / SE) account that would (_________/ decrease) by $30,000. Common stock is a (A / L / _________) account that would (_________/ decrease) by $30,000.
Q4. Revenue, expense, and dividend account data are recorded in the Retained Earnings Column. Retained earnings is increased by (_________/ dividends) and decreased by (net income / _________). Therefore, “Doogie’s provided dog grooming services for $20,000 cash” is a transaction that affects (_________/ accounts receivable) and (_________/ expense). Because revenue (_________/ decreases) net income and net income (_________/ decreases) (_________/ common stock), the revenue portion of this transaction is listed under the Retained Earnings Column.
Q5. For each balance sheet classification listed below, compute the ending balance for July.
a. Total assets _________
b. Total liabilities _________
c. Total stockholders’ equity _________
Q6. Is the accounting equation in balance at the end of July? (_________ / No)
Q7. Transaction #6 affects (1 / ____ / 3) accounts and is referred to as a (____ / compound) entry, while Transaction #7 affects (1 / 2 / ____) accounts and is referred to as a (double / ____) entry.

  • CreatedSeptember 17, 2015
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