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Chapter 2: Measurement Concepts: Recording Business Transactions

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Question;74. Which;of the following is the first step in the accounting cycle?;A. Prepare financial statements.;B. Analyzebusiness transactions from source documents.;C. Prepare an adjusted trial balance.;D. Post the journal entries to the ledger.;75. The;declaration of dividends will;A. decrease net income.;B. increase liabilities.;C. not affect total assets.;D. increase stockholders? equity.;76. A;company records a transaction in which six months' rent is paid in advance.;Which of the following journal entries records the transaction?;A. Prepaid Rent ? Debit, Cash ? Credit;B. Rent Receivable ? Debit, Cash ? Credit;C. Rent Revenue ? Debit, Cash ? Credit;D. Rent Expense? Debit, Cash ? Credit.;77. Receiving;cash from a customer for settlement of an Accounts Receivable will;A. decrease Stockholders? Equity.;B. increase net income.;C. increase total assets.;D. not affect total assets.;78. Which;of the following events does not require a journal entry?;A. Purchase of a one-year insurance policy.;B. Agreement to perform a service at a future date.;C. Payment for a service performed previously.;D. All of these choices.;79. When;a company has performed a service but has not yet received payment, what is the;required journal entry to be recorded?;A. Accounts Receivable ? Debit, Service Revenue ? Credit;B. Service Revenue ? Debit, Accounts Payable ? Credit.;C. Service Revenue ? Debit, Accounts Receivable ? Credit;D. No entry is required until the cash is received.;80. When;a service has been performed, but no cash has been received, which of the;following statements is true?;A. The entry would include a debit to Accounts Receivable.;B. The entry would include a debit to Accounts Payable.;C. The entry would include a credit to Unearned Revenue.;D. No entry is required until the cash is received.;81. The;controller for Tires and More, Inc. has recorded the following transactions;during the month: the purchase of equipment for $8,500 cash, payment of $6,300;for 3 months of rent, and, collection of $2,400 from a customer for services;performed. At the beginning of the month the company was established by;selling 10,000 shares of stock to the public for $15,000 cash. What is;the balance in the Cash account at the end of the month, and is the balance a;debit or a credit?;A. $2,600 debit.;B. $2,600 credit.;C. $6,800 debit.;D. $15,200 debit.

 

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