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Chapter 2: Measurement Concepts: Recording Business Transactions




Question;1. The;valuation issue deals with how the components of a transaction should be;categorized.;True False;2. Business;transactions are economic events that should be recorded in the accounting;records.;True False;3. In;accounting, to recognize means to record a transaction or event.;True False;4. Generally;accepted accounting principles state that all business transactions should be;valued at fair value both when they occur and at all subsequent reporting;dates.;True False;5. Fair;value is the exchange price of an actual or potential business transaction;between market participants.;True False;6. Normally;the value of an asset remains at its initial fair value or cost until the asset;is sold, expires, or is consumed.;True False;7. A;credit to an asset account means that asset account has been increased.;True False;8. A;debit has an unfavorable effect on an account.;True False;9. For;a T account, an account balance is the difference in total dollars between;total debit footings and total credit footings.;True False;10. A;decrease in a liability is recorded by a credit.;True False;11. The;double-entry system is possible because all business transactions have at least;two equal and opposite aspects.;True False;12. A;decrease in the Retained Earnings account is recorded with a debit.;True False;13. A;transaction that increases expenses will decrease stockholders? equity.;True False;14. The;Common Stock account represents the stockholders? claim against specific assets;of the company, while the Retained Earnings account represents the stockholders?;claim against the general assets of the company.;True False;15. The;first step in the accounting cycle is to post the journal entries to the ledger;and prepare a trial balance.;True False


Paper#55130 | Written in 18-Jul-2015

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