id stringlengths 36 36 | embedding list | document stringlengths 70 999 | metadata stringlengths 691 694 |
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-... | expense for April. Expenses go up with debit entries. Therefore, you will debit gas expense.
162
Chapter 3 Analyzing and Recording Transactions
• You purchased the gas on account. This will increase your liabilities. Liabilities increase with credit
entries. Credit accounts payable to increase the total in the account.
April 26
• You have received more cash from customers, so you want the total cash to increase. Cash is an
asset, and assets increase with debit entries, so debit cash.
• You also have more money owed to you by your customers. You have performed the services, your
customers owe you the money, and you will receive the money in the future. Debit accounts
receivable as asset accounts increase with debits.
• You have mowed lawns and earned more revenue. You want the total of your revenue account to
increase to reflect this additional revenue. Revenue accounts increase with credit entries, so credit
lawn-mowing revenue.
April 27 | {"title": "Principles of Accounting, Volume 1: Financial Accounting", "upload_timestamp": "2026-02-07T07:23:08.167529", "uploaded_via": "batch_uploader", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "moddate": "2020-08-05T15:26:11-05:00", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "total_pages": 1055, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_type": ".pdf", "creationdate": "2019-04-24T10:32:54-05:00", "producer": "Prince 11 (www.princexml.com)", "batch_upload": true, "file_name": "FinancialAccounting-OP.pdf", "file_size_mb": 156.7} |
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-0.0... | increase to reflect this additional revenue. Revenue accounts increase with credit entries, so credit
lawn-mowing revenue.
April 27
• Advertising is an expense of doing business. You have incurred more expenses, so you want to
increase an expense account. Expense accounts increase with debit entries. Debit advertising
expense.
• You paid cash for the advertising. You have less cash, so credit the cash account. Cash is an asset,
and asset account totals decrease with credits.
April 29
• You paid “on account.” Remember that “on account” means a service was performed or an item
was received without being paid for. The customer asked to be billed. You were the customer in this
case. You made a purchase of gas on account earlier in the month, and at that time you increased
accounts payable to show you had a liability to pay this amount sometime in the future. You are now
paying down some of the money you owe on that account. Since you paid this money, you now have | {"file_name": "FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "file_size_mb": 156.7, "batch_upload": true, "title": "Principles of Accounting, Volume 1: Financial Accounting", "creationdate": "2019-04-24T10:32:54-05:00", "uploaded_via": "batch_uploader", "upload_timestamp": "2026-02-07T07:23:08.167529", "total_pages": 1055, "file_type": ".pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "producer": "Prince 11 (www.princexml.com)"} |
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-0.021451... | accounts payable to show you had a liability to pay this amount sometime in the future. You are now
paying down some of the money you owe on that account. Since you paid this money, you now have
less of a liability so you want to see the liability account, accounts payable, decrease by the amount
paid. Liability accounts decrease with debit entries.
• You paid, which means you gave cash (or wrote a check or electronically transferred) so you have
less cash. To decrease the total cash, credit the account because asset accounts are reduced by
recording credit entries.
Y O U R T U R N
Normal Account Balances
Calculate the balances in each of the following accounts. Do they all have the normal balance they should
have? If not, which one? How do you know this?
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 3 Analyzing and Recording Transactions
163
Solution
164
Chapter 3 Analyzing and Recording Transactions | {"creator": "DocBook XSL Stylesheets V1.79.1", "creationdate": "2019-04-24T10:32:54-05:00", "batch_upload": true, "uploaded_via": "batch_uploader", "moddate": "2020-08-05T15:26:11-05:00", "file_name": "FinancialAccounting-OP.pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "producer": "Prince 11 (www.princexml.com)", "file_type": ".pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "total_pages": 1055, "title": "Principles of Accounting, Volume 1: Financial Accounting", "upload_timestamp": "2026-02-07T07:23:08.167529", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9"} |
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-0.04734598845243454,
0.0024520668666809797,
0.015572747215628624,
-0.020148759707808495,
-0.... | This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 3 Analyzing and Recording Transactions
163
Solution
164
Chapter 3 Analyzing and Recording Transactions
T H I N K I T T H R O U G H
Gift Cards
Gift cards have become an important topic for managers of any company. Understanding who buys gift
cards, why, and when can be important in business planning. Also, knowing when and how to determine
that a gift card will not likely be redeemed will affect both the company’s balance sheet (in the liabilities
section) and the income statement (in the revenues section).
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 3 Analyzing and Recording Transactions
165
According to a 2017 holiday shopping report from the National Retail Federation, gift cards are the most- | {"producer": "Prince 11 (www.princexml.com)", "upload_timestamp": "2026-02-07T07:23:08.167529", "uploaded_via": "batch_uploader", "total_pages": 1055, "title": "Principles of Accounting, Volume 1: Financial Accounting", "moddate": "2020-08-05T15:26:11-05:00", "batch_upload": true, "creator": "DocBook XSL Stylesheets V1.79.1", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_type": ".pdf", "file_size_mb": 156.7, "file_name": "FinancialAccounting-OP.pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00"} |
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0.03959691897034645,
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-0.01... | 165
According to a 2017 holiday shopping report from the National Retail Federation, gift cards are the most-
requested presents for the eleventh year in a row, with 61% of people surveyed saying they are at the top
of their wish lists, according to the National Retail Federation.[6] CEB TowerGroup projects that total gift
card volume will reach $160 billion by 2018.[7]
How are all of these gift card sales affecting one of America’s favorite specialty coffee companies,
Starbucks?
In 2014 one in seven adults received a Starbucks gift card. On Christmas Eve alone $2.5 million gift cards
were sold. This is a rate of 1,700 cards per minute.[8]
The following discussion about gift cards is taken from Starbucks’s 2016 annual report: | {"uploaded_via": "batch_uploader", "producer": "Prince 11 (www.princexml.com)", "total_pages": 1055, "file_name": "FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "moddate": "2020-08-05T15:26:11-05:00", "creationdate": "2019-04-24T10:32:54-05:00", "title": "Principles of Accounting, Volume 1: Financial Accounting", "upload_timestamp": "2026-02-07T07:23:08.167529", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "batch_upload": true, "file_size_mb": 156.7, "file_type": ".pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9"} |
8a1732a1-927e-4413-a34a-410247b8d97e | [
-0.06314105540513992,
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0.08566723763942719,
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-0.0244336798787117,
0.02911435067653656,
0.054394401609897614,
0.02417849190533161,
-0.01371316... | When an amount is loaded onto a stored value card we recognize a corresponding liability for
the full amount loaded onto the card, which is recorded within stored value card liability on
our consolidated balance sheets. When a stored value card is redeemed at a company-
operated store or online, we recognize revenue by reducing the stored value card liability.
When a stored value card is redeemed at a licensed store location, we reduce the
corresponding stored value card liability and cash, which is reimbursed to the licensee. There
are no expiration dates on our stored value cards, and in most markets, we do not charge
service fees that cause a decrement to customer balances. While we will continue to honor all
stored value cards presented for payment, management may determine the likelihood of
redemption, based on historical experience, is deemed to be remote for certain cards due to
long periods of inactivity. In these circumstances, unredeemed card balances may be | {"file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_type": ".pdf", "moddate": "2020-08-05T15:26:11-05:00", "batch_upload": true, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "upload_timestamp": "2026-02-07T07:23:08.167529", "producer": "Prince 11 (www.princexml.com)", "file_name": "FinancialAccounting-OP.pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "total_pages": 1055, "title": "Principles of Accounting, Volume 1: Financial Accounting", "creationdate": "2019-04-24T10:32:54-05:00", "creator": "DocBook XSL Stylesheets V1.79.1", "uploaded_via": "batch_uploader"} |
ff418eef-f103-47ef-95fd-506f71bb8782 | [
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-0.03159097582101822,
-0.11675245314836502,
... | redemption, based on historical experience, is deemed to be remote for certain cards due to
long periods of inactivity. In these circumstances, unredeemed card balances may be
recognized as breakage income. In fiscal 2016, 2015, and 2014, we recognized breakage
income of $60.5 million, $39.3 million, and $38.3 million, respectively.[9] | {"batch_upload": true, "creator": "DocBook XSL Stylesheets V1.79.1", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "upload_timestamp": "2026-02-07T07:23:08.167529", "producer": "Prince 11 (www.princexml.com)", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_type": ".pdf", "moddate": "2020-08-05T15:26:11-05:00", "file_name": "FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "uploaded_via": "batch_uploader", "file_size_mb": 156.7, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "total_pages": 1055} |
7518bab2-58c3-4b27-bd11-ea4330a44582 | [
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0.005187730770558119,
-0.014258462935686111,
0.07255803048610687,
0.0023714930284768343,
-0.0942... | As of October 1, 2017, Starbucks had a total of $1,288,500,000 in stored value card liability.
3.6 Prepare a Trial Balance
Once all the monthly transactions have been analyzed, journalized, and posted on a continuous day-to-day
basis over the accounting period (a month in our example), we are ready to start working on preparing a trial
balance (unadjusted). Preparing an unadjusted trial balance is the fourth step in the accounting cycle. A trial
balance is a list of all accounts in the general ledger that have nonzero balances. A trial balance is an
important step in the accounting process, because it helps identify any computational errors throughout the
first three steps in the cycle.
Note that for this step, we are considering our trial balance to be unadjusted. The unadjusted trial balance in
this section includes accounts before they have been adjusted. As you see in step 6 of the accounting cycle, we | {"creator": "DocBook XSL Stylesheets V1.79.1", "uploaded_via": "batch_uploader", "file_type": ".pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "producer": "Prince 11 (www.princexml.com)", "batch_upload": true, "file_size_mb": 156.7, "file_name": "FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "total_pages": 1055, "upload_timestamp": "2026-02-07T07:23:08.167529", "moddate": "2020-08-05T15:26:11-05:00", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting"} |
2b2379f3-1632-41bd-9f7d-a913098e674e | [
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-0.00965791754424572,
0.01366791594773531,
0.05787428095936775,
-0.043662670999765396,
... | this section includes accounts before they have been adjusted. As you see in step 6 of the accounting cycle, we
create another trial balance that is adjusted (see The Adjustment Process).
6 National Retail Federation (NRF). “NRF Consumer Survey Points to Busy Holiday Season, Backs Up Economic Forecast and Import
Numbers.” October 27, 2017. https://nrf.com/media-center/press-releases/nrf-consumer-survey-points-busy-holiday-season-backs-economic-
forecast
CEB Tower Group. “2015 Gift Card Sales to Reach New Peak of $130 Billion.” PR Newswire. December 8, 2015. https://www.prnewswire.com/
Sara Haralson. “Last-Minute Shoppers Rejoice! Starbucks Has You Covered.” Fortune. December 22, 2015. http://fortune.com/video/2015/ | {"moddate": "2020-08-05T15:26:11-05:00", "batch_upload": true, "upload_timestamp": "2026-02-07T07:23:08.167529", "total_pages": 1055, "creator": "DocBook XSL Stylesheets V1.79.1", "uploaded_via": "batch_uploader", "file_size_mb": 156.7, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "producer": "Prince 11 (www.princexml.com)", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_name": "FinancialAccounting-OP.pdf", "file_type": ".pdf", "creationdate": "2019-04-24T10:32:54-05:00", "title": "Principles of Accounting, Volume 1: Financial Accounting"} |
c6584903-8a3a-4ee4-a89e-1123f76ced91 | [
-0.034792710095644,
0.06656748801469803,
-0.030301816761493683,
0.012932192534208298,
-0.02733597345650196,
0.06047002598643303,
0.05428781732916832,
0.04226307198405266,
0.08228442817926407,
-0.022279642522335052,
0.03743496164679527,
0.03984179347753525,
0.006646026857197285,
-0.03832897... | Sara Haralson. “Last-Minute Shoppers Rejoice! Starbucks Has You Covered.” Fortune. December 22, 2015. http://fortune.com/video/2015/
7
news-releases/2015-gift-card-sales-to-reach-new-peak-of-130-billion-300189615.html
8
12/22/starbucks-gift-cards/
9 U.S. Securities and Exchange Commission. Communication from Starbucks Corporation regarding 2014 10-K Filing. November 14, 2014.
https://www.sec.gov/Archives/edgar/data/829224/000082922415000020/filename1.htm
166
Chapter 3 Analyzing and Recording Transactions
When constructing a trial balance, we must consider a few formatting rules, akin to those requirements for
financial statements:
• The header must contain the name of the company, the label of a Trial Balance (Unadjusted), and the
date.
• Accounts are listed in the accounting equation order with assets listed first followed by liabilities and
finally equity.
• Amounts at the top of each debit and credit column should have a dollar sign. | {"batch_upload": true, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "creator": "DocBook XSL Stylesheets V1.79.1", "moddate": "2020-08-05T15:26:11-05:00", "file_size_mb": 156.7, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_name": "FinancialAccounting-OP.pdf", "producer": "Prince 11 (www.princexml.com)", "creationdate": "2019-04-24T10:32:54-05:00", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_type": ".pdf", "uploaded_via": "batch_uploader", "title": "Principles of Accounting, Volume 1: Financial Accounting", "upload_timestamp": "2026-02-07T07:23:08.167529", "total_pages": 1055} |
a4afcb8e-97b0-4740-a36f-c9fa407ec5dc | [
0.0041110762394964695,
0.05671381950378418,
-0.10089068114757538,
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0.015207215212285519,
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0.03812350332736969,
0.05052972212433815,
-0.11877303570508957,
-0.007027200423181057,
-0.0... | finally equity.
• Amounts at the top of each debit and credit column should have a dollar sign.
• When amounts are added, the final figure in each column should be underscored.
• The totals at the end of the trial balance need to have dollar signs and be double-underscored.
Transferring information from T-accounts to the trial balance requires consideration of the final balance in
each account. If the final balance in the ledger account (T-account) is a debit balance, you will record the total
in the left column of the trial balance. If the final balance in the ledger account (T-account) is a credit balance,
you will record the total in the right column.
Once all ledger accounts and their balances are recorded, the debit and credit columns on the trial balance are
totaled to see if the figures in each column match each other. The final total in the debit column must be the | {"producer": "Prince 11 (www.princexml.com)", "upload_timestamp": "2026-02-07T07:23:08.167529", "uploaded_via": "batch_uploader", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "creator": "DocBook XSL Stylesheets V1.79.1", "file_name": "FinancialAccounting-OP.pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_type": ".pdf", "creationdate": "2019-04-24T10:32:54-05:00", "moddate": "2020-08-05T15:26:11-05:00", "total_pages": 1055, "batch_upload": true, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf"} |
800fc8b7-08cb-4703-988c-235952b5d7c3 | [
-0.013224463909864426,
0.03896594047546387,
-0.04402203485369682,
-0.08182550221681595,
-0.02952873334288597,
-0.034959957003593445,
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0.036110952496528625,
0.04137380048632622,
-0.0869666114449501,
0.051879364997148514,
-0.0460... | totaled to see if the figures in each column match each other. The final total in the debit column must be the
same dollar amount that is determined in the final credit column. For example, if you determine that the final
debit balance is $24,000 then the final credit balance in the trial balance must also be $24,000. If the two
balances are not equal, there is a mistake in at least one of the columns.
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 3 Analyzing and Recording Transactions
167
Let’s now take a look at the T-accounts and unadjusted trial balance for Printing Plus to see how the
information is transferred from the T-accounts to the unadjusted trial balance.
For example, Cash has a final balance of $24,800 on the debit side. This balance is transferred to the Cash
account in the debit column on the unadjusted trial balance. Accounts Receivable ($1,200), Supplies ($500), | {"uploaded_via": "batch_uploader", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "batch_upload": true, "file_type": ".pdf", "creationdate": "2019-04-24T10:32:54-05:00", "moddate": "2020-08-05T15:26:11-05:00", "title": "Principles of Accounting, Volume 1: Financial Accounting", "producer": "Prince 11 (www.princexml.com)", "total_pages": 1055, "creator": "DocBook XSL Stylesheets V1.79.1", "upload_timestamp": "2026-02-07T07:23:08.167529", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_name": "FinancialAccounting-OP.pdf"} |
60dec1e9-8f06-467b-88f3-013b437db89f | [
-0.08893870562314987,
0.020440325140953064,
-0.029495468363165855,
-0.08168267458677292,
0.008168702013790607,
-0.025631187483668327,
0.027394575998187065,
0.01244876254349947,
0.06268628686666489,
0.03155579790472984,
0.04371347278356552,
-0.09838444739580154,
0.04455987736582756,
-0.1183... | account in the debit column on the unadjusted trial balance. Accounts Receivable ($1,200), Supplies ($500),
Equipment ($3,500), Dividends ($100), Salaries Expense ($3,600), and Utility Expense ($300) also have debit
final balances in their T-accounts, so this information will be transferred to the debit column on the unadjusted
trial balance. Accounts Payable ($500), Unearned Revenue ($4,000), Common Stock ($20,000) and Service
Revenue ($9,500) all have credit final balances in their T-accounts. These credit balances would transfer to the
168
Chapter 3 Analyzing and Recording Transactions
credit column on the unadjusted trial balance.
Once all balances are transferred to the unadjusted trial balance, we will sum each of the debit and credit
columns. The debit and credit columns both total $34,000, which means they are equal and in balance.
However, just because the column totals are equal and in balance, we are still not guaranteed that a mistake is
not present. | {"total_pages": 1055, "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_size_mb": 156.7, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "producer": "Prince 11 (www.princexml.com)", "batch_upload": true, "moddate": "2020-08-05T15:26:11-05:00", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_name": "FinancialAccounting-OP.pdf", "file_type": ".pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "uploaded_via": "batch_uploader", "creator": "DocBook XSL Stylesheets V1.79.1", "creationdate": "2019-04-24T10:32:54-05:00", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf"} |
3272a3a7-62f4-4fe3-86b6-a91f001b3805 | [
-0.08862296491861343,
0.04958847165107727,
-0.10146136581897736,
0.008068105205893517,
0.012175684794783592,
-0.056346189230680466,
0.018661266192793846,
-0.026079516857862473,
0.07966817915439606,
0.020368531346321106,
0.04024916887283325,
0.016581378877162933,
0.0708945095539093,
-0.0336... | However, just because the column totals are equal and in balance, we are still not guaranteed that a mistake is
not present.
What happens if the columns are not equal?
C O N C E P T S I N P R A C T I C E
Enron and Arthur Andersen
One of the most well-known financial schemes is that involving the companies Enron Corporation and
Arthur Andersen. Enron defrauded thousands by intentionally inflating revenues that did not exist.
Arthur Andersen was the auditing firm in charge of independently verifying the accuracy of Enron’s
financial statements and disclosures. This meant they would review statements to make sure they
aligned with GAAP principles, assumptions, and concepts, among other things.
It has been alleged that Arthur Andersen was negligent in its dealings with Enron and contributed to the
collapse of the company. Arthur Andersen was brought up on a charge of obstruction of justice for | {"producer": "Prince 11 (www.princexml.com)", "file_type": ".pdf", "batch_upload": true, "creator": "DocBook XSL Stylesheets V1.79.1", "uploaded_via": "batch_uploader", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "creationdate": "2019-04-24T10:32:54-05:00", "total_pages": 1055, "file_name": "FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00"} |
1e93e0e0-5153-404b-8d72-c4e5d268f0a3 | [
-0.04917188733816147,
0.11268763989210129,
-0.04985847696661949,
-0.017658881843090057,
0.022099720314145088,
0.0007444845396094024,
0.004424098879098892,
0.030954640358686447,
0.04234607145190239,
0.04025649651885033,
0.07516390830278397,
0.049899451434612274,
0.0693352222442627,
-0.02873... | collapse of the company. Arthur Andersen was brought up on a charge of obstruction of justice for
shredding important documents related to criminal actions by Enron. They were found guilty but had
that conviction overturned. However, the damage was done, and the company’s reputation prevented it
from operating as it had.[10]
Locating Errors
Sometimes errors may occur in the accounting process, and the trial balance can make those errors apparent
when it does not balance.
James Titcomb. “Arthur Andersen Returns 12 Years after Enron Scandal.” The Telegraph. September 2, 2014. https://www.telegraph.co.uk/
10
finance/newsbysector/banksandfinance/11069713/Arthur-Andersen-returns-12-years-after-Enron-scandal.html
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 3 Analyzing and Recording Transactions
169
One way to find the error is to take the difference between the two totals and divide the difference by two. For | {"source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "producer": "Prince 11 (www.princexml.com)", "uploaded_via": "batch_uploader", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00", "file_type": ".pdf", "creationdate": "2019-04-24T10:32:54-05:00", "file_size_mb": 156.7, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "total_pages": 1055, "title": "Principles of Accounting, Volume 1: Financial Accounting", "batch_upload": true, "file_name": "FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "upload_timestamp": "2026-02-07T07:23:08.167529"} |
d64ec51a-f859-4564-b3ca-1930f9a75a8d | [
-0.018539346754550934,
0.08076769858598709,
0.0010579206282272935,
-0.05609002336859703,
0.020235706120729446,
-0.04871044307947159,
-0.0014614838873967528,
0.05560607463121414,
0.011897255666553974,
0.041482701897621155,
0.06786429136991501,
-0.07908239215612411,
0.02059759385883808,
-0.0... | 169
One way to find the error is to take the difference between the two totals and divide the difference by two. For
example, let’s assume the following is the trial balance for Printing Plus.
You notice that the balances are not the same. Find the difference between the two totals: $34,100 – $33,900 =
$200 difference. Now divide the difference by two: $200/2 = $100. Since the credit side has a higher total, look
carefully at the numbers on the credit side to see if any of them are $100. The Dividends account has a $100
figure listed in the credit column. Dividends normally have a debit balance, but here it is a credit. Look back at
the Dividends T-account to see if it was copied onto the trial balance incorrectly. If the answer is the same as
the T-account, then trace it back to the journal entry to check for mistakes. You may discover in your
investigation that you copied the number from the T-account incorrectly. Fix your error, and the debit total will | {"moddate": "2020-08-05T15:26:11-05:00", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_size_mb": 156.7, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "batch_upload": true, "producer": "Prince 11 (www.princexml.com)", "file_name": "FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader", "file_type": ".pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "upload_timestamp": "2026-02-07T07:23:08.167529", "title": "Principles of Accounting, Volume 1: Financial Accounting", "total_pages": 1055} |
b9f63672-3665-497b-aae7-4d88977db7ce | [
-0.028531333431601524,
0.09034371376037598,
-0.021961988881230354,
-0.10489848256111145,
-0.04884203150868416,
-0.04131944105029106,
0.016146868467330933,
0.09192000329494476,
0.019583122804760933,
0.038393303751945496,
0.060912780463695526,
-0.0921342596411705,
0.037198081612586975,
-0.04... | investigation that you copied the number from the T-account incorrectly. Fix your error, and the debit total will
go up $100 and the credit total down $100 so that they will both now be $34,000.
Another way to find an error is to take the difference between the two totals and divide by nine. If the outcome
of the difference is a whole number, then you may have transposed a figure. For example, let’s assume the
following is the trial balance for Printing Plus.
Find the difference between the two totals: $35,800 – 34,000 = $1,800 difference. This difference divided by nine
170
Chapter 3 Analyzing and Recording Transactions
is $200 ($1,800/9 = $200). Looking at the debit column, which has the higher total, we determine that the
Equipment account had transposed figures. The account should be $3,500 and not $5,300. We transposed the
three and the five.
What do you do if you have tried both methods and neither has worked? Unfortunately, you will have to go | {"upload_timestamp": "2026-02-07T07:23:08.167529", "title": "Principles of Accounting, Volume 1: Financial Accounting", "moddate": "2020-08-05T15:26:11-05:00", "creator": "DocBook XSL Stylesheets V1.79.1", "total_pages": 1055, "uploaded_via": "batch_uploader", "creationdate": "2019-04-24T10:32:54-05:00", "file_type": ".pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_name": "FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "batch_upload": true, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "producer": "Prince 11 (www.princexml.com)"} |
f5e2b5cd-2ef1-401e-9c64-3c51c5c79224 | [
-0.02438213862478733,
0.05216137319803238,
0.030202554538846016,
-0.03892112150788307,
-0.023289455100893974,
0.01019096840173006,
-0.03311261907219887,
0.024856245145201683,
0.05395415052771568,
-0.0027073966339230537,
0.03589795157313347,
0.002927399007603526,
0.021016301587224007,
-0.09... | three and the five.
What do you do if you have tried both methods and neither has worked? Unfortunately, you will have to go
back through one step at a time until you find the error.
If a trial balance is in balance, does this mean that all of the numbers are correct? Not necessarily. We can
have errors and still be mathematically in balance. It is important to go through each step very carefully and
recheck your work often to avoid mistakes early on in the process.
After the unadjusted trial balance is prepared and it appears error-free, a company might look at its financial
statements to get an idea of the company’s position before adjustments are made to certain accounts. A more
complete picture of company position develops after adjustments occur, and an adjusted trial balance has
been prepared. These next steps in the accounting cycle are covered in The Adjustment Process.
Y O U R T U R N
Completing a Trial Balance | {"file_name": "FinancialAccounting-OP.pdf", "batch_upload": true, "file_size_mb": 156.7, "uploaded_via": "batch_uploader", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "producer": "Prince 11 (www.princexml.com)", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_type": ".pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "total_pages": 1055, "upload_timestamp": "2026-02-07T07:23:08.167529", "moddate": "2020-08-05T15:26:11-05:00", "creator": "DocBook XSL Stylesheets V1.79.1"} |
2bfe00e5-4579-40a7-b82b-c06a7eacf848 | [
0.03310126066207886,
0.10312718152999878,
0.017447717487812042,
-0.053280096501111984,
-0.014266543090343475,
-0.0833374634385109,
-0.025388147681951523,
0.05572647228837013,
0.005895175505429506,
0.05588385462760925,
0.03194301202893257,
-0.06242131441831589,
0.03778738155961037,
-0.08540... | been prepared. These next steps in the accounting cycle are covered in The Adjustment Process.
Y O U R T U R N
Completing a Trial Balance
Complete the trial balance for Magnificent Landscaping Service using the following T-account final
balance information for April 30, 2018.
Solution
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 3 Analyzing and Recording Transactions
171
T H I N K I T T H R O U G H
Correcting Errors in the Trial Balance
You own a small consulting business. Each month, you prepare a trial balance showing your company’s
position. After preparing your trial balance this month, you discover that it does not balance. The debit
column shows $2,000 more dollars than the credit column. You decide to investigate this error.
What methods could you use to find the error? What are the ramifications if you do not find and fix this
error? How can you minimize these types of errors in the future?
172 | {"batch_upload": true, "file_type": ".pdf", "moddate": "2020-08-05T15:26:11-05:00", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_name": "FinancialAccounting-OP.pdf", "producer": "Prince 11 (www.princexml.com)", "file_size_mb": 156.7, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "total_pages": 1055, "upload_timestamp": "2026-02-07T07:23:08.167529", "uploaded_via": "batch_uploader", "creator": "DocBook XSL Stylesheets V1.79.1", "creationdate": "2019-04-24T10:32:54-05:00", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf"} |
db928348-0d8c-48a1-8029-c1a0e767b3bd | [
0.028046607971191406,
0.03327599912881851,
-0.03556795418262482,
-0.03417931869626045,
-0.052294936031103134,
-0.021618638187646866,
0.024638989940285683,
0.056047871708869934,
0.013133837841451168,
0.0002425580460112542,
0.02554028294980526,
-0.02462931163609028,
0.04677721485495567,
-0.0... | What methods could you use to find the error? What are the ramifications if you do not find and fix this
error? How can you minimize these types of errors in the future?
172
Chapter 3 Analyzing and Recording Transactions
Key Terms
abnormal balance
account balance that is contrary to the expected normal balance of that account
account
record showing increases and decreases to assets, liabilities, and equity found in the accounting
equation
accounting cycle
step-by-step process to record business activities and events to keep financial records up
to date
book of original entry
journal is often referred to as this because it is the place the information originally
enters into the system
chart of accounts
account numbering system that lists all the accounts a business uses in its day-to-day
transactions
compound entry
more than one account is listed under the debit and/or credit column of a journal entry
conceptual framework | {"file_type": ".pdf", "producer": "Prince 11 (www.princexml.com)", "uploaded_via": "batch_uploader", "title": "Principles of Accounting, Volume 1: Financial Accounting", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "total_pages": 1055, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "batch_upload": true, "upload_timestamp": "2026-02-07T07:23:08.167529", "file_size_mb": 156.7, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_name": "FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "moddate": "2020-08-05T15:26:11-05:00", "creationdate": "2019-04-24T10:32:54-05:00"} |
b14527d4-8292-4106-9941-ae8e9ec1513d | [
0.0033660156186670065,
0.004254503641277552,
-0.05498639494180679,
-0.060658037662506104,
-0.045316122472286224,
0.021433815360069275,
0.0591893307864666,
0.03874807059764862,
0.05287765711545944,
0.027530059218406677,
0.05173336714506149,
-0.07301869243383408,
0.03075832687318325,
-0.0522... | transactions
compound entry
more than one account is listed under the debit and/or credit column of a journal entry
conceptual framework
interrelated objectives and fundamentals of accounting principles for financial
reporting
conservatism
concept that if there is uncertainty in a potential financial estimate, a company should err on
the side of caution and report the most conservative amount
contributed capital
owner’s investment (cash and other assets) in the business which typically comes in the
form of common stock
cost principle
everything the company owns or controls (assets) must be recorded at its value at the date of
acquisition
credit
records financial information on the right side of an account
debit
records financial information on the left side of each account
double-entry accounting system
requires the sum of the debits to equal the sum of the credits for each
transaction
ending account balance
difference between debits and credits for an account | {"file_name": "FinancialAccounting-OP.pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader", "creationdate": "2019-04-24T10:32:54-05:00", "creator": "DocBook XSL Stylesheets V1.79.1", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "producer": "Prince 11 (www.princexml.com)", "title": "Principles of Accounting, Volume 1: Financial Accounting", "batch_upload": true, "total_pages": 1055, "file_type": ".pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "moddate": "2020-08-05T15:26:11-05:00", "file_size_mb": 156.7} |
0ebff77c-22c9-4951-bff5-cce01ee84c84 | [
-0.054240159690380096,
0.06301723420619965,
0.019855987280607224,
-0.06907143443822861,
-0.061878468841314316,
0.004430732224136591,
0.07364645600318909,
-0.00901759508997202,
0.04859960451722145,
-0.007725117728114128,
0.00465591112151742,
-0.04142787680029869,
0.0031168905552476645,
-0.0... | double-entry accounting system
requires the sum of the debits to equal the sum of the credits for each
transaction
ending account balance
difference between debits and credits for an account
expanded accounting equation
breaks down the equity portion of the accounting equation into more detail
to see the impact to equity from changes to revenues and expenses, and to owner investments and
payouts
expense recognition principle
(also, matching principle) matches expenses with associated revenues in the
period in which the revenues were generated
full disclosure principle
business must report any business activities that could affect what is reported on
the financial statements
general ledger
comprehensive listing of all of a company’s accounts with their individual balances
going concern assumption
absent any evidence to the contrary, assumption that a business will continue to
operate in the indefinite future
journal
record of all transactions
journalizing | {"source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "upload_timestamp": "2026-02-07T07:23:08.167529", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_name": "FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "batch_upload": true, "total_pages": 1055, "moddate": "2020-08-05T15:26:11-05:00", "title": "Principles of Accounting, Volume 1: Financial Accounting", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_type": ".pdf", "uploaded_via": "batch_uploader", "producer": "Prince 11 (www.princexml.com)", "creationdate": "2019-04-24T10:32:54-05:00"} |
62517f2f-1b5e-4a48-a3a1-20564582c6d9 | [
-0.0154218515381217,
0.04565741494297981,
-0.08888622373342514,
-0.01809566654264927,
-0.017232436686754227,
-0.012145626358687878,
0.04465045407414436,
-0.048818107694387436,
0.05211218446493149,
0.023474296554923058,
0.025925787165760994,
0.04552805423736572,
0.030339675024151802,
-0.062... | going concern assumption
absent any evidence to the contrary, assumption that a business will continue to
operate in the indefinite future
journal
record of all transactions
journalizing
entering information into a journal; second step in the accounting cycle
monetary measurement
system of using a monetary unit by which to value the transaction, such as the US
dollar
normal balance
expected balance each account type maintains, which is the side that increases
original source
traceable record of information that contributes to the creation of a business transaction
period
one operating cycle of a business, which could be a month, quarter, or year
posting
takes all transactions from the journal during a period and moves the information to a general
ledger (ledger)
prepaid expenses
items paid for in advance of their use
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 3 Analyzing and Recording Transactions
173 | {"source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader", "total_pages": 1055, "producer": "Prince 11 (www.princexml.com)", "file_size_mb": 156.7, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "batch_upload": true, "creator": "DocBook XSL Stylesheets V1.79.1", "file_type": ".pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "title": "Principles of Accounting, Volume 1: Financial Accounting", "moddate": "2020-08-05T15:26:11-05:00", "file_name": "FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167529"} |
552eee14-f83a-417e-832f-36a11f7e337d | [
-0.023751016706228256,
0.021788639947772026,
-0.04599715769290924,
-0.0875919908285141,
-0.032578110694885254,
0.028952207416296005,
0.1504075825214386,
-0.02190018817782402,
0.03459673002362251,
0.012150353752076626,
0.04012591019272804,
-0.05632159486413002,
0.0013590550515800714,
-0.042... | prepaid expenses
items paid for in advance of their use
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 3 Analyzing and Recording Transactions
173
revenue recognition principle
principle stating that a company must recognize revenue in the period in
which it is earned; it is not considered earned until a product or service has been provided
separate entity concept
business may only report activities on financial statements that are specifically
related to company operations, not those activities that affect the owner personally
simple entry
only one debit account and one credit account are listed under the debit and credit columns of
a journal entry
stockholders‛ equity
owner (stockholders‛) investments in the business and earnings
T-account
graphic representation of a general ledger account in which each account is visually split into left
and right sides
time period assumption | {"batch_upload": true, "producer": "Prince 11 (www.princexml.com)", "uploaded_via": "batch_uploader", "title": "Principles of Accounting, Volume 1: Financial Accounting", "total_pages": 1055, "file_type": ".pdf", "creationdate": "2019-04-24T10:32:54-05:00", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_name": "FinancialAccounting-OP.pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "upload_timestamp": "2026-02-07T07:23:08.167529", "creator": "DocBook XSL Stylesheets V1.79.1", "moddate": "2020-08-05T15:26:11-05:00", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf"} |
977af701-21e3-4737-b1e0-d9afe26c531d | [
-0.0032156486995518208,
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0.03020811825990677,
0.04914473742246628,
0.04278123378753662,
0.12758992612361908,
-0.023888003081083298,
0.0034466125071048737,
-0.03621591627597809,
-0.012174447998404503,
-0.0... | T-account
graphic representation of a general ledger account in which each account is visually split into left
and right sides
time period assumption
companies can present useful information in shorter time periods such as years,
quarters, or months
transaction
business activity or event that has an effect on financial information presented on financial
statements
trial balance
list of all accounts in the general ledger that have nonzero balances
unadjusted trial balance
trial balance that includes accounts before they have been adjusted
unearned revenue
advance payment for a product or service that has yet to be provided by the company;
the transaction is a liability until the product or service is provided
Summary
3.1 Describe Principles, Assumptions, and Concepts of Accounting and Their Relationship to Financial
Statements
• The Financial Accounting Standards Board (FASB) is an independent, nonprofit organization that sets the | {"file_size_mb": 156.7, "file_name": "FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "producer": "Prince 11 (www.princexml.com)", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "batch_upload": true, "moddate": "2020-08-05T15:26:11-05:00", "total_pages": 1055, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_type": ".pdf", "uploaded_via": "batch_uploader", "upload_timestamp": "2026-02-07T07:23:08.167529"} |
458c438c-51f8-4eea-be3f-e049c52cd6c3 | [
0.0006178835174068809,
0.007960780523717403,
-0.11032763868570328,
-0.02631174772977829,
-0.008695056661963463,
0.06444286555051804,
0.05465954914689064,
0.010817029513418674,
0.08198492974042892,
-0.03859444335103035,
-0.022847266867756844,
-0.04101790487766266,
-0.04865768179297447,
-0.0... | • The Financial Accounting Standards Board (FASB) is an independent, nonprofit organization that sets the
standards for financial accounting and reporting standards for both public- and private-sector businesses
in the United States, including generally accepted accounting principles (GAAP).
• GAAP are the concepts, standards, and rules that guide the preparation and presentation of financial
statements.
• The Securities and Exchange Commission (SEC) is an independent federal agency that is charged with
protecting the interests of investors, regulating stock markets, and ensuring companies adhere to GAAP
requirements.
• The FASB uses a conceptual framework, which is a set of concepts that guide financial reporting.
• The revenue recognition principle requires companies to record revenue when it is earned. Revenue is
earned when a product or service has been provided.
• The expense recognition principle requires that expenses incurred match with revenues earned in the | {"file_size_mb": 156.7, "producer": "Prince 11 (www.princexml.com)", "creationdate": "2019-04-24T10:32:54-05:00", "uploaded_via": "batch_uploader", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "moddate": "2020-08-05T15:26:11-05:00", "file_name": "FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "file_type": ".pdf", "total_pages": 1055, "upload_timestamp": "2026-02-07T07:23:08.167529", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "batch_upload": true} |
0381f360-6fcc-46db-a5e3-26e6b737f8bc | [
-0.027440696954727173,
0.05942820757627487,
-0.04743772745132446,
-0.01077696681022644,
0.06785232573747635,
0.05871836096048355,
0.12190413475036621,
-0.02489098347723484,
0.11842692643404007,
0.0018875818932428956,
0.045914292335510254,
-0.03383191302418709,
0.022961491718888283,
-0.0397... | earned when a product or service has been provided.
• The expense recognition principle requires that expenses incurred match with revenues earned in the
same period. The expenses are associated with revenue generation.
• The cost principle records assets at their value at the date of acquisition. A company may not record what
it estimates or thinks the value of the asset is, only what is verifiable. This verification is typically
represented by an actual transaction.
• The full disclosure principle requires companies to relay any information to the public that may affect
financials that are not readily available on the financial statements. This helps users of information make
decisions that are more informed.
• The separate entity concept maintains that only business activities, and not the owner’s personal
financials, may be reported on company financial statements.
• Conservatism prescribes that a company should record expenses or losses when there is an expectation | {"batch_upload": true, "file_type": ".pdf", "total_pages": 1055, "producer": "Prince 11 (www.princexml.com)", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "uploaded_via": "batch_uploader", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_name": "FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_size_mb": 156.7, "creator": "DocBook XSL Stylesheets V1.79.1", "upload_timestamp": "2026-02-07T07:23:08.167529", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf"} |
c3232e54-48c2-4c58-954a-78125266e21c | [
-0.009029463864862919,
0.05007822811603546,
-0.09339534491300583,
0.030483247712254524,
-0.015893571078777313,
0.023523516952991486,
0.07802917808294296,
-0.005678489338606596,
0.07428933680057526,
-0.001413453952409327,
0.09614130109548569,
-0.07091055065393448,
-0.0009628835832700133,
-0... | financials, may be reported on company financial statements.
• Conservatism prescribes that a company should record expenses or losses when there is an expectation
of their existence but only recognize gains or revenue when there is assurance that they will be realized.
• Monetary measurement requires a monetary unit be used to report financial information, such as the US
174
Chapter 3 Analyzing and Recording Transactions
dollar. This makes information comparable.
• The going concern assumption assumes that a business will continue to operate in the foreseeable
future. If there is a concern the business will not continue operating, this needs to be disclosed to
management and other users of information.
• Time period assumption presents financial information in equal and short time frames, such as a month,
quarter, or year.
• The accounting equation shows that assets must equal the sum of liabilities and equity. Transactions are | {"batch_upload": true, "upload_timestamp": "2026-02-07T07:23:08.167529", "file_type": ".pdf", "total_pages": 1055, "uploaded_via": "batch_uploader", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "moddate": "2020-08-05T15:26:11-05:00", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "title": "Principles of Accounting, Volume 1: Financial Accounting", "creationdate": "2019-04-24T10:32:54-05:00", "file_size_mb": 156.7, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_name": "FinancialAccounting-OP.pdf", "producer": "Prince 11 (www.princexml.com)"} |
b4edecc0-ea32-48d7-8dc0-82c67230e1c5 | [
0.01657162234187126,
0.013631053268909454,
-0.0464712530374527,
-0.054507751017808914,
-0.04832063615322113,
0.02503940276801586,
0.017913375049829483,
0.00025237741647288203,
0.09139463305473328,
-0.0025844608899205923,
0.049392763525247574,
-0.023981455713510513,
0.00048383159446530044,
... | quarter, or year.
• The accounting equation shows that assets must equal the sum of liabilities and equity. Transactions are
analyzed with this equation to prepare for the next step in the accounting cycle.
3.2 Define and Describe the Expanded Accounting Equation and Its Relationship to Analyzing
Transactions
• The expanded accounting equation breaks down the equity portion of the accounting equation into more
detail to show common stock, dividends, revenue, and expenses individually.
• The chart of accounts is a numbering system that lists all of a company’s accounts in the order in which
they appear on the financial statements, beginning with the balance sheet accounts and then the income
statement accounts.
3.3 Define and Describe the Initial Steps in the Accounting Cycle
• Step 1 in the accounting cycle: Identifying and analyzing transactions requires a company to take | {"batch_upload": true, "file_name": "FinancialAccounting-OP.pdf", "total_pages": 1055, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "file_type": ".pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "producer": "Prince 11 (www.princexml.com)", "uploaded_via": "batch_uploader", "upload_timestamp": "2026-02-07T07:23:08.167529", "title": "Principles of Accounting, Volume 1: Financial Accounting", "moddate": "2020-08-05T15:26:11-05:00", "creationdate": "2019-04-24T10:32:54-05:00"} |
dd19d266-9bf3-45ed-b05b-59d2077e6476 | [
0.006069005932658911,
0.031122790649533272,
-0.0737774595618248,
-0.0063294917345047,
0.00711177010089159,
-0.010976573452353477,
0.05442822352051735,
-0.01758662424981594,
0.08725076168775558,
0.0007072081789374352,
0.013536765240132809,
0.004759157542139292,
0.02929474227130413,
-0.08374... | statement accounts.
3.3 Define and Describe the Initial Steps in the Accounting Cycle
• Step 1 in the accounting cycle: Identifying and analyzing transactions requires a company to take
information from an original source, identify its purpose as a financial transaction, and connect that
information to an accounting equation.
• Step 2 in the accounting cycle: Recording transactions to a journal takes financial information identified in
the transaction and copies that information, using the accounting equation, into a journal. The journal is a
record of all transactions.
• Step 3 in the accounting cycle: Posting journal information to a ledger takes all information transferred to
the journal and posts it to a general ledger. The general ledger in an accumulation of all accounts a
company maintains and their balances.
• Step 4 in the accounting cycle: Preparing an unadjusted trial balance requires transfer of information | {"file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_name": "FinancialAccounting-OP.pdf", "total_pages": 1055, "file_size_mb": 156.7, "moddate": "2020-08-05T15:26:11-05:00", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "uploaded_via": "batch_uploader", "title": "Principles of Accounting, Volume 1: Financial Accounting", "upload_timestamp": "2026-02-07T07:23:08.167529", "file_type": ".pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "producer": "Prince 11 (www.princexml.com)", "batch_upload": true} |
120b2975-5217-4579-a7cb-3460dfc991f4 | [
-0.009579514153301716,
0.08040598034858704,
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-0.012885571457445621,
-0.045138608664274216,
-0.007576265837997198,
0.04770619422197342,
-0.013508069328963757,
0.09126085042953491,
0.041824501007795334,
-0.012354720383882523,
0.030396221205592155,
0.00291413813829422,
-... | company maintains and their balances.
• Step 4 in the accounting cycle: Preparing an unadjusted trial balance requires transfer of information
from the general ledger (T-accounts) to an unadjusted trial balance showing all account balances.
3.4 Analyze Business Transactions Using the Accounting Equation and Show the Impact of Business
Transactions on Financial Statements
• Both the basic and the expanded accounting equations are useful in analyzing how any transaction
affects a company’s financial statements.
3.5 Use Journal Entries to Record Transactions and Post to T-Accounts
•
•
Journals are the first place where information is entered into the accounting system, which is why they are
often referred to as books of original entry.
Journalizing transactions transfers information from accounting equation analysis to a record of each
transaction.
• There are several formatting rules for journalizing transactions that include where to put debits and | {"file_size_mb": 156.7, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "batch_upload": true, "title": "Principles of Accounting, Volume 1: Financial Accounting", "creator": "DocBook XSL Stylesheets V1.79.1", "uploaded_via": "batch_uploader", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_name": "FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "upload_timestamp": "2026-02-07T07:23:08.167529", "moddate": "2020-08-05T15:26:11-05:00", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "total_pages": 1055, "producer": "Prince 11 (www.princexml.com)", "file_type": ".pdf"} |
ab378f68-40b8-4c0b-88d3-41aa2b938795 | [
0.018203487619757652,
0.07287494093179703,
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-0.006106346379965544,
0.014380136504769325,
0.019923130050301552,
0.026068709790706635,
0.04766334220767021,
0.026311218738555908,
-0.055615752935409546,
0.044847290962934494,
-0.... | transaction.
• There are several formatting rules for journalizing transactions that include where to put debits and
credits, which account titles come first, the need for a date and inclusion of a brief description.
• Step 3 in the accounting cycle posts journal information to the general ledger (T-accounts). Final balances
in each account must be calculated before transfer to the trial balance occurs.
3.6 Prepare a Trial Balance
• The trial balance contains a listing of all accounts in the general ledger with nonzero balances.
Information is transferred from the T-accounts to the trial balance.
• Sometimes errors occur on the trial balance, and there are ways to find these errors. One may have to go
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 3 Analyzing and Recording Transactions
175
through each step of the accounting process to locate an error on the trial balance.
Multiple Choice
1. | {"file_name": "FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader", "batch_upload": true, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "file_size_mb": 156.7, "producer": "Prince 11 (www.princexml.com)", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "moddate": "2020-08-05T15:26:11-05:00", "file_type": ".pdf", "total_pages": 1055, "creator": "DocBook XSL Stylesheets V1.79.1", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "creationdate": "2019-04-24T10:32:54-05:00"} |
06a59d95-eb2c-4369-9ec5-4bd6fd405f96 | [
0.04247936233878136,
0.07599776983261108,
-0.041707877069711685,
-0.026338135823607445,
-0.04290079325437546,
0.005598078481853008,
0.1050354391336441,
0.006942782551050186,
0.04673692211508751,
0.06020548567175865,
0.05519208684563637,
-0.08464332669973373,
0.03673505783081055,
-0.0458393... | 175
through each step of the accounting process to locate an error on the trial balance.
Multiple Choice
1.
3.1 That a business may only report activities on financial statements that are specifically related to
company operations, not those activities that affect the owner personally, is known as which of the following?
A.
separate entity concept
B. monetary measurement concept
C. going concern assumption
D.
time period assumption
2.
3.1 That companies can present useful information in shorter time periods such as years, quarters, or
months is known as which of the following?
A.
separate entity concept
B. monetary measurement concept
C. going concern assumption
D.
time period assumption
3.
3.1 The system of using a monetary unit, such as the US dollar, to value the transaction is known as
which of the following?
A.
separate entity concept
B. monetary measurement concept
C. going concern assumption
D.
time period assumption
4. | {"source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "uploaded_via": "batch_uploader", "moddate": "2020-08-05T15:26:11-05:00", "file_name": "FinancialAccounting-OP.pdf", "total_pages": 1055, "creator": "DocBook XSL Stylesheets V1.79.1", "producer": "Prince 11 (www.princexml.com)", "file_size_mb": 156.7, "upload_timestamp": "2026-02-07T07:23:08.167529", "file_type": ".pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "batch_upload": true, "creationdate": "2019-04-24T10:32:54-05:00"} |
38c1aea2-fcb8-4ef4-932a-d4e09a0b536d | [
0.019604595378041267,
0.0032484051771461964,
-0.0596291609108448,
-0.013382384553551674,
-0.027545103803277016,
0.04256537929177284,
0.05893386900424957,
-0.013067557476460934,
0.05803334712982178,
0.052420128136873245,
0.04819044470787048,
-0.0746859461069107,
-0.029661476612091064,
-0.03... | which of the following?
A.
separate entity concept
B. monetary measurement concept
C. going concern assumption
D.
time period assumption
4.
3.1 Which of the following terms is used when assuming a business will continue to operate in the
foreseeable future?
A.
separate entity concept
B. monetary measurement concept
C. going concern assumption
D.
time period assumption
5.
3.1 The independent, nonprofit organization that sets financial accounting and reporting standards for
both public- and private-sector businesses that use generally accepted accounting principles (GAAP) in the
United States is which of the following?
A.
Financial Accounting Standards Board (FASB)
B. generally accepted accounting principles (GAAP)
C.
D.
Securities and Exchange Commission (SEC)
conceptual framework
6.
3.1 The standards, procedures, and principles companies must follow when preparing their financial
statements are known as which of the following?
A. | {"source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "upload_timestamp": "2026-02-07T07:23:08.167529", "creator": "DocBook XSL Stylesheets V1.79.1", "moddate": "2020-08-05T15:26:11-05:00", "uploaded_via": "batch_uploader", "creationdate": "2019-04-24T10:32:54-05:00", "batch_upload": true, "file_size_mb": 156.7, "file_name": "FinancialAccounting-OP.pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "producer": "Prince 11 (www.princexml.com)", "total_pages": 1055, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_type": ".pdf"} |
1b64ad1d-c636-45f0-ab40-8f093e139562 | [
0.043575841933488846,
-0.040441982448101044,
-0.08870262652635574,
-0.03764738142490387,
-0.004408384673297405,
0.0444335974752903,
0.02904229424893856,
0.002086307154968381,
0.044992879033088684,
0.02239326760172844,
0.009901028126478195,
-0.03897779807448387,
-0.0551610067486763,
-0.0211... | conceptual framework
6.
3.1 The standards, procedures, and principles companies must follow when preparing their financial
statements are known as which of the following?
A.
Financial Accounting Standards Board (FASB)
B. generally accepted accounting principles (GAAP)
C.
D.
Securities and Exchange Commission (SEC)
conceptual framework
176
Chapter 3 Analyzing and Recording Transactions
7.
3.1 These are used by the FASB, and it is a set of concepts that guide financial reporting.
A.
Financial Accounting Standards Board (FASB)
B. generally accepted accounting principles (GAAP)
C.
D.
Securities and Exchange Commission (SEC)
conceptual framework
8.
3.1 This is the independent federal agency protecting the interests of investors, regulating stock markets,
and ensuring companies adhere to GAAP requirements.
A.
Financial Accounting Standards Board (FASB)
B. generally accepted accounting principles (GAAP)
C.
D.
Securities and Exchange Commission (SEC) | {"title": "Principles of Accounting, Volume 1: Financial Accounting", "file_type": ".pdf", "total_pages": 1055, "batch_upload": true, "file_name": "FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "upload_timestamp": "2026-02-07T07:23:08.167529", "uploaded_via": "batch_uploader", "moddate": "2020-08-05T15:26:11-05:00", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "producer": "Prince 11 (www.princexml.com)", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7} |
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0.08495806902647018,
0.015938524156808853,
0.06295674294233322,
0.010479998774826527,
-0.01257640402764082,
-0.03374544531106949,
0.012819468975067139,
-0.010635... | A.
Financial Accounting Standards Board (FASB)
B. generally accepted accounting principles (GAAP)
C.
D.
Securities and Exchange Commission (SEC)
conceptual framework
9.
3.1 Which of the following is the principle that a company must recognize revenue in the period in which
it is earned; it is not considered earned until a product or service has been provided?
A.
revenue recognition principle
B. expense recognition (matching) principle
C.
D.
cost principle
full disclosure principle
10.
3.1 Which of the following is the principle that a business must report any business activities that could
affect what is reported on the financial statements?
A.
revenue recognition principle
B. expense recognition (matching) principle
C.
D.
cost principle
full disclosure principle
11.
3.1 Also known as the historical cost principle, ________ states that everything the company owns or
controls (assets) must be recorded at their value at the date of acquisition.
A. | {"file_name": "FinancialAccounting-OP.pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader", "file_type": ".pdf", "producer": "Prince 11 (www.princexml.com)", "batch_upload": true, "title": "Principles of Accounting, Volume 1: Financial Accounting", "upload_timestamp": "2026-02-07T07:23:08.167529", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "moddate": "2020-08-05T15:26:11-05:00", "file_size_mb": 156.7, "creationdate": "2019-04-24T10:32:54-05:00", "total_pages": 1055, "creator": "DocBook XSL Stylesheets V1.79.1"} |
8e89f698-f4ec-4a7b-9bc1-4d13b54b9ec3 | [
-0.07012896984815598,
0.07565207034349442,
-0.028113599866628647,
-0.043945666402578354,
-0.018139120191335678,
0.046115364879369736,
0.09953583031892776,
-0.005669950973242521,
0.06423337757587433,
0.03207866847515106,
0.015983814373612404,
-0.053368911147117615,
0.07812094688415527,
-0.0... | 11.
3.1 Also known as the historical cost principle, ________ states that everything the company owns or
controls (assets) must be recorded at their value at the date of acquisition.
A.
revenue recognition principle
B. expense recognition (matching) principle
C.
D.
cost principle
full disclosure principle
12.
3.1 Which of the following principles matches expenses with associated revenues in the period in which
the revenues were generated?
A.
revenue recognition principle
B. expense recognition (matching) principle
C.
D.
cost principle
full disclosure principle
13.
3.2 Which of the following does not accurately represent the accounting equation?
A. Assets – Liabilities = Stockholders’ Equity
B. Assets – Stockholders’ Equity = Liabilities
C. Assets = Liabilities + Stockholders’ Equity
D. Assets + Liabilities = Stockholders’ Equity
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 3 Analyzing and Recording Transactions | {"batch_upload": true, "creationdate": "2019-04-24T10:32:54-05:00", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_type": ".pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "file_size_mb": 156.7, "title": "Principles of Accounting, Volume 1: Financial Accounting", "producer": "Prince 11 (www.princexml.com)", "total_pages": 1055, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "uploaded_via": "batch_uploader", "moddate": "2020-08-05T15:26:11-05:00", "file_name": "FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9"} |
dcb76326-4fcd-42a3-9e17-dd0cb64bf9f8 | [
0.03098682314157486,
-0.0010142347309738398,
-0.07632449269294739,
-0.06787320226430893,
-0.013843904249370098,
-0.04383223131299019,
0.10418767482042313,
-0.015833426266908646,
0.08654604852199554,
0.0688076913356781,
0.0025605871342122555,
-0.03095209039747715,
0.060014355927705765,
-0.0... | D. Assets + Liabilities = Stockholders’ Equity
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 3 Analyzing and Recording Transactions
177
14.
3.2 Which of these statements is false?
A. Assets = Liabilities + Equity
B. Assets – Liabilities = Equity
C.
Liabilities – Equity = Assets
D. Liabilities = Assets – Equity
15.
3.2 Which of these accounts is an asset?
A. Common Stock
B. Supplies
C. Accounts Payable
D. Fees Earned
16.
3.2 Which of these accounts is a liability?
A. Accounts Receivable
B. Supplies
C.
Salaries Expense
D. Accounts Payable
17.
3.2 If equity equals $100,000, which of the following is true?
A. Assets exceed liabilities by $100,000.
B.
Liabilities exceed equity by $100,000.
C. Assets + liabilities equal $100,000.
D. None of the above is true.
18.
3.3 Which process of the accounting cycle often requires the most analytical thought?
A. making a journal entry
B. posting transactions to accounts
C. | {"file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "moddate": "2020-08-05T15:26:11-05:00", "uploaded_via": "batch_uploader", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "producer": "Prince 11 (www.princexml.com)", "upload_timestamp": "2026-02-07T07:23:08.167529", "total_pages": 1055, "creator": "DocBook XSL Stylesheets V1.79.1", "batch_upload": true, "file_type": ".pdf", "creationdate": "2019-04-24T10:32:54-05:00", "file_name": "FinancialAccounting-OP.pdf"} |
15012965-0fc1-4ef7-9f41-e8ef8d93abce | [
-0.020092541351914406,
0.02701440081000328,
-0.06725668162107468,
-0.04717329889535904,
-0.04071807488799095,
-0.028236454352736473,
0.019688403233885765,
-0.014071048237383366,
0.08434779942035675,
0.0470532551407814,
0.028915708884596825,
0.02073679305613041,
-0.01919255033135414,
-0.011... | D. None of the above is true.
18.
3.3 Which process of the accounting cycle often requires the most analytical thought?
A. making a journal entry
B. posting transactions to accounts
C.
summarizing the trial balance
D. preparing the financial statements
19.
3.3 The 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.
journal
20.
3.3 One operating cycle of a business, which could be a month, quarter, or year, is commonly referred
to as which of the following?
A. period
B.
C.
round
tally
D. mark
21.
3.3 ________ takes all transactions from the journal during a period and moves the information to a
general ledger (ledger).
A. Hitching
B. Posting
C. Vetting
D. Laxing
178
Chapter 3 Analyzing and Recording Transactions
22.
3.4 Which of these events will not be recognized? | {"uploaded_via": "batch_uploader", "producer": "Prince 11 (www.princexml.com)", "file_type": ".pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "batch_upload": true, "upload_timestamp": "2026-02-07T07:23:08.167529", "moddate": "2020-08-05T15:26:11-05:00", "total_pages": 1055, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_name": "FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "creationdate": "2019-04-24T10:32:54-05:00", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf"} |
7f607964-7588-4a41-87fd-156a0468c01a | [
-0.036593370139598846,
0.07209613919258118,
0.00469439011067152,
-0.030619192868471146,
-0.013762158341705799,
-0.04631280153989792,
0.017733797430992126,
-0.025249090045690536,
0.07511807233095169,
0.0745568498969078,
0.06551160663366318,
-0.047928586602211,
0.021308673545718193,
-0.01713... | general ledger (ledger).
A. Hitching
B. Posting
C. Vetting
D. Laxing
178
Chapter 3 Analyzing and Recording Transactions
22.
3.4 Which of these events will not be recognized?
A. A service is performed, but the payment is not collected on the same day.
B. Supplies are purchased. They are not paid for; the company will be billed.
C. A copy machine is ordered. It will be delivered in two weeks.
D. Electricity has been used but has not been paid for.
23.
3.4 A company purchased a building twenty years ago for $150,000. The building currently has an
appraised market value of $235,000. The company reports the building on its balance sheet at $235,000. What
concept or principle has been violated?
A.
B.
separate entity concept
recognition principle
C. monetary measurement concept
D.
cost principle
24.
3.4 What is the impact on the accounting equation when a current month’s utility expense is paid?
A. both sides increase
B. both sides decrease | {"source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "file_name": "FinancialAccounting-OP.pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "uploaded_via": "batch_uploader", "creationdate": "2019-04-24T10:32:54-05:00", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_type": ".pdf", "batch_upload": true, "creator": "DocBook XSL Stylesheets V1.79.1", "total_pages": 1055, "upload_timestamp": "2026-02-07T07:23:08.167529", "moddate": "2020-08-05T15:26:11-05:00", "producer": "Prince 11 (www.princexml.com)"} |
accb71f7-39c5-4af5-827c-187d35ff0030 | [
0.003021863056346774,
0.04514635354280472,
0.019993985071778297,
-0.030874742195010185,
0.0028653524350374937,
0.06707317382097244,
0.03506242856383324,
-0.00414469325914979,
0.061932239681482315,
0.09503960609436035,
0.04109292849898338,
-0.025339461863040924,
0.05743350461125374,
-0.0213... | D.
cost principle
24.
3.4 What is the impact on the accounting equation when a current month’s utility expense is paid?
A. both sides increase
B. both sides decrease
C. only the Asset side changes
D. neither side changes
25.
3.4 What is the impact on the accounting equation when a payment of account payable is made?
A. both sides increase
B. both sides decrease
C. only the Asset side changes
D. neither side changes
26.
3.4 What is the impact on the accounting equation when an accounts receivable is collected?
A. both sides increase
B. both sides decrease
C. only the Asset side changes
D.
the total of neither side changes
27.
3.4 What is the impact on the accounting equation when a sale occurs?
A. both sides increase
B. both sides decrease
C. only the Asset side changes
D. neither side changes
28.
3.4 What is the impact on the accounting equation when stock is issued, in exchange for assets?
A. both sides increase
B. both sides decrease | {"source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00", "batch_upload": true, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "uploaded_via": "batch_uploader", "file_name": "FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "title": "Principles of Accounting, Volume 1: Financial Accounting", "total_pages": 1055, "creator": "DocBook XSL Stylesheets V1.79.1", "producer": "Prince 11 (www.princexml.com)", "creationdate": "2019-04-24T10:32:54-05:00", "file_type": ".pdf", "file_size_mb": 156.7} |
f3fc8a3c-34a4-4f03-8fdf-0a27ec4b950b | [
-0.026606563478708267,
0.011516423895955086,
0.03509843349456787,
-0.05343075096607208,
0.04577282816171646,
0.029628220945596695,
0.03935106471180916,
-0.03020806983113289,
0.028098810464143753,
0.03575151041150093,
0.07153696566820145,
-0.022875282913446426,
0.03384701535105705,
-0.05191... | D. neither side changes
28.
3.4 What is the impact on the accounting equation when stock is issued, in exchange for assets?
A. both sides increase
B. both sides decrease
C. only the Asset side changes
D. neither side changes
29.
3.5 Which of the following accounts is increased by a debit?
A. Common Stock
B. Accounts Payable
C.
Supplies
D. Service Revenue
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 3 Analyzing and Recording Transactions
179
30.
3.5 Which of the following accounts does not increase with a debit entry?
A. Retained Earnings
B. Buildings
C. Prepaid Rent
D. Electricity Expense
31.
3.5 Which of the following pairs increase with credit entries?
A.
B.
supplies and retained earnings
rent expense and unearned revenue
C. prepaid rent and common stock
D. unearned service revenue and accounts payable
32.
3.5 Which of the following pairs of accounts are impacted the same with debits and credits? | {"uploaded_via": "batch_uploader", "creationdate": "2019-04-24T10:32:54-05:00", "file_size_mb": 156.7, "file_type": ".pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "batch_upload": true, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00", "file_name": "FinancialAccounting-OP.pdf", "total_pages": 1055, "title": "Principles of Accounting, Volume 1: Financial Accounting", "upload_timestamp": "2026-02-07T07:23:08.167529", "producer": "Prince 11 (www.princexml.com)", "creator": "DocBook XSL Stylesheets V1.79.1"} |
5910cc23-306f-46b3-9634-32819bf4f368 | [
-0.05183848738670349,
-0.03046387992799282,
0.014329747296869755,
-0.08611699938774109,
-0.010032358579337597,
0.01588965207338333,
0.11674438416957855,
-0.028649944812059402,
0.03601806238293648,
0.015396883711218834,
0.055024404078722,
-0.03708149120211601,
0.009818553924560547,
-0.07092... | C. prepaid rent and common stock
D. unearned service revenue and accounts payable
32.
3.5 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 Stock
33.
3.5 Which of the following accounts will normally have a debit balance?
A. Common Stock
B.
C.
Fees Earned
Supplies
D. Accounts Payable
34.
3.5 What type of account is prepaid insurance?
A. Stockholders’ Equity
B. Expense
C.
Liability
D. Asset
35.
3.5 Unearned service revenue occurs when which of the following occurs?
A.
B.
C.
D.
company receives cash from a customer before performing the service
company pays cash before receiving a service from a supplier
company pays cash after receiving a service from a supplier
company receives cash from a customer after performing a service
36. | {"file_size_mb": 156.7, "creator": "DocBook XSL Stylesheets V1.79.1", "producer": "Prince 11 (www.princexml.com)", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "batch_upload": true, "moddate": "2020-08-05T15:26:11-05:00", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "total_pages": 1055, "file_name": "FinancialAccounting-OP.pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "upload_timestamp": "2026-02-07T07:23:08.167529", "file_type": ".pdf", "creationdate": "2019-04-24T10:32:54-05:00", "uploaded_via": "batch_uploader"} |
e03c23d4-84c1-4eef-a75f-89f519779586 | [
-0.06662121415138245,
-0.08361662924289703,
0.014386492781341076,
-0.11410198360681534,
-0.03268243372440338,
-0.019957201555371284,
0.10771716386079788,
-0.02452700398862362,
0.019450541585683823,
0.006326494738459587,
0.04383409023284912,
-0.0796702653169632,
0.0008011700119823217,
-0.04... | company pays cash before receiving a service from a supplier
company pays cash after receiving a service from a supplier
company receives cash from a customer after performing a service
36.
3.5 Which set of accounts has the same type of normal balance?
A. Cash, accounts payable
B. Prepaid rent, unearned service revenue
C. Dividends, common stock
D. Accounts payable, retained earnings
37.
3.5 Which of these transactions requires a debit entry to Cash?
A. paid balance due to suppliers
B.
C.
sold merchandise on account
collected balance due from customers
D. purchased supplies for cash
180
Chapter 3 Analyzing and Recording Transactions
38.
3.5 Which of these transactions requires a credit entry to Revenue?
A.
B.
C.
D.
received cash from services performed this month
collected balance due from customers
received cash from bank loan
refunded a customer for a defective product
39.
3.5 Which of these accounts commonly requires both debit and credit entries? | {"batch_upload": true, "creationdate": "2019-04-24T10:32:54-05:00", "producer": "Prince 11 (www.princexml.com)", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader", "title": "Principles of Accounting, Volume 1: Financial Accounting", "upload_timestamp": "2026-02-07T07:23:08.167529", "file_type": ".pdf", "file_size_mb": 156.7, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "creator": "DocBook XSL Stylesheets V1.79.1", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "total_pages": 1055, "file_name": "FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00"} |
3e99c7e3-375f-4dbb-ae33-fb0a118b02a7 | [
-0.015066026709973812,
0.025416990742087364,
0.02530686929821968,
-0.03857796639204025,
-0.014034824445843697,
0.05300112068653107,
0.08655264973640442,
0.02444847859442234,
-0.007871642708778381,
0.020746227353811264,
0.04951723292469978,
-0.0728885680437088,
0.017344247549772263,
-0.1446... | collected balance due from customers
received cash from bank loan
refunded a customer for a defective product
39.
3.5 Which of these accounts commonly requires both debit and credit entries?
A. Sales Revenue
B. Utilities Expense
C. Accounts Receivable
D. Common Stock
40.
3.5 Which of the following accounting records is the main source of information used to prepare the
financial statements?
A.
journal entries
B. T-accounts
C.
D.
trial balance
chart of accounts
41.
3.5 Which of the following financial statements should be prepared first?
A. Balance Sheet
B.
Income Statement
C. Retained Earnings Statement
D. Statement of Cash Flows
Questions
1.
2.
3.
4.
5.
6.
7.
3.1 Explain what conservatism means, and give an example in your own words.
3.2 State the accounting equation, and explain what each part represents.
3.2 How do revenues and expenses affect the accounting equation? | {"batch_upload": true, "file_size_mb": 156.7, "creator": "DocBook XSL Stylesheets V1.79.1", "producer": "Prince 11 (www.princexml.com)", "moddate": "2020-08-05T15:26:11-05:00", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_name": "FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "uploaded_via": "batch_uploader", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "total_pages": 1055, "file_type": ".pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9"} |
0e97e543-983c-4d80-8f8d-36db11f09f94 | [
-0.04174979403614998,
-0.016831282526254654,
0.023730702698230743,
-0.031175220385193825,
-0.03747699782252312,
0.030531900003552437,
0.09334968775510788,
0.000058502613683231175,
0.048864565789699554,
0.006151728332042694,
0.03562799096107483,
-0.07108362019062042,
0.05166047066450119,
-0... | 3.2 State the accounting equation, and explain what each part represents.
3.2 How do revenues and expenses affect the accounting equation?
3.2 Does every transaction affect both sides of the accounting equation? Explain your answer.
3.3 Which is the “book of original entry”?
3.4 What is the effect on the accounting equation when a business purchases supplies on account?
3.4 What is the effect on the accounting equation when a business pays the balance due on accounts
payable?
8.
3.4 Is it still necessary to record a transaction if it has no net effect on the accounting equation? Explain
your answer.
9.
3.4 Why does the combined total of the company’s liabilities and equity always equal the total of the
company’s assets?
10.
3.5 What do the terms “debit” and “credit” mean?
11.
3.5 Will an accounts receivable balance increase with a debit or a credit entry? How do you know? | {"upload_timestamp": "2026-02-07T07:23:08.167529", "title": "Principles of Accounting, Volume 1: Financial Accounting", "total_pages": 1055, "file_name": "FinancialAccounting-OP.pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_size_mb": 156.7, "creator": "DocBook XSL Stylesheets V1.79.1", "uploaded_via": "batch_uploader", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "batch_upload": true, "creationdate": "2019-04-24T10:32:54-05:00", "moddate": "2020-08-05T15:26:11-05:00", "file_type": ".pdf", "producer": "Prince 11 (www.princexml.com)"} |
dc2c074d-a913-4d08-b204-ecdd08a4f85c | [
-0.036421988159418106,
-0.026215724647045135,
-0.026267606765031815,
-0.06063509359955788,
-0.042095545679330826,
-0.02116721123456955,
0.04647856205701828,
0.021361323073506355,
0.023110391572117805,
0.04051191732287407,
0.0236969031393528,
-0.05875218287110329,
0.013206133618950844,
-0.0... | company’s assets?
10.
3.5 What do the terms “debit” and “credit” mean?
11.
3.5 Will an accounts receivable balance increase with a debit or a credit entry? How do you know?
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 3 Analyzing and Recording Transactions
181
12.
3.5 What types of accounts will increase with a credit?
13.
3.5 What is a journal?
14.
3.5 Why is a journal referred to as the “book of original entry”?
15.
3.5 What does the term recognize mean?
16.
3.5 What are the rules you should follow when recording journal entries?
17.
3.5 What is the general ledger?
18.
3.5 Explain the steps in posting.
19.
3.5 What is a T-account? When would we use T-accounts?
20.
3.5 Explain normal balances. Give three examples of accounts that will normally have a debit balance
and three accounts that will normally have a credit balance.
21.
3.5 What is a prepaid account? What type of account is it?
22. | {"title": "Principles of Accounting, Volume 1: Financial Accounting", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "uploaded_via": "batch_uploader", "file_size_mb": 156.7, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "producer": "Prince 11 (www.princexml.com)", "upload_timestamp": "2026-02-07T07:23:08.167529", "total_pages": 1055, "batch_upload": true, "creator": "DocBook XSL Stylesheets V1.79.1", "moddate": "2020-08-05T15:26:11-05:00", "file_name": "FinancialAccounting-OP.pdf", "file_type": ".pdf"} |
07508810-fd77-4a6c-944a-1b2ff1e1034b | [
-0.009456531144678593,
0.009094721637666225,
-0.009299120865762234,
-0.030889632180333138,
-0.045190487056970596,
0.02063770405948162,
0.11991789191961288,
0.050161927938461304,
0.05489788576960564,
0.055104706436395645,
0.023739339783787727,
-0.049362294375896454,
0.014329765923321247,
-0... | and three accounts that will normally have a credit balance.
21.
3.5 What is a prepaid account? What type of account is it?
22.
3.5 What is an unearned account? What type of account is it?
23.
3.5 Explain what a T-account is and what purpose it serves.
24.
3.5 Can a credit entry be described as a generally positive or negative transaction? Explain.
25.
3.5 What types of accounts are increased with a debit?
26.
3.5 What types of accounts are increased with a credit?
27.
3.5 What does an account’s “normal balance” indicate?
28.
3.5 Does the order in which financial statements are prepared matter?
29.
3.5 Answer the following questions about the trial balance: What is the purpose of it? What is the
primary usefulness of it?
182
Chapter 3 Analyzing and Recording Transactions
Exercise Set A
EA1.
3.1 Match the correct term with its definition.
A. cost principle
i. if uncertainty in a potential financial estimate, a company should err on the side of | {"producer": "Prince 11 (www.princexml.com)", "title": "Principles of Accounting, Volume 1: Financial Accounting", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00", "file_name": "FinancialAccounting-OP.pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "creator": "DocBook XSL Stylesheets V1.79.1", "total_pages": 1055, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "batch_upload": true, "uploaded_via": "batch_uploader", "file_type": ".pdf", "file_size_mb": 156.7, "upload_timestamp": "2026-02-07T07:23:08.167529"} |
f37246f6-f594-42e2-8c23-b73396727b2e | [
-0.0329686664044857,
0.08907198905944824,
-0.05331989750266075,
-0.02276071161031723,
-0.010839681141078472,
0.07483338564634323,
0.11611782759428024,
0.03735107555985451,
0.07123954594135284,
0.04443032294511795,
0.02413991466164589,
-0.04913409426808357,
0.08060776442289352,
-0.041605599... | Exercise Set A
EA1.
3.1 Match the correct term with its definition.
A. cost principle
i. if uncertainty in a potential financial estimate, a company should err on the side of
caution and report the most conservative amount
B. full disclosure
ii. also known as the historical cost principle, states that everything the company owns
principle
or controls (assets) must be recorded at their value at the date of acquisition
C. separate
iii. (also referred to as the matching principle) matches expenses with associated
entity concept
revenues in the period in which the revenues were generated
D. monetary
iv. business must report any business activities that could affect what is reported on
measurement
the financial statements
concept
E. conservatism
v. system of using a monetary unit by which to value the transaction, such as the US
dollar
F. revenue
recognition
principle
G. expense
recognition
principle | {"file_size_mb": 156.7, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "producer": "Prince 11 (www.princexml.com)", "file_name": "FinancialAccounting-OP.pdf", "batch_upload": true, "uploaded_via": "batch_uploader", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "total_pages": 1055, "creationdate": "2019-04-24T10:32:54-05:00", "file_type": ".pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "moddate": "2020-08-05T15:26:11-05:00", "upload_timestamp": "2026-02-07T07:23:08.167529"} |
42278191-acc0-4349-b847-6238e550dff6 | [
-0.0021737946663051844,
0.014440733939409256,
-0.08709241449832916,
-0.054316673427820206,
0.009588675573468208,
0.03718617558479309,
0.1278064250946045,
-0.027459915727376938,
0.11173905432224274,
-0.0029515353962779045,
0.1167614534497261,
-0.027218447998166084,
0.035820089280605316,
-0.... | concept
E. conservatism
v. system of using a monetary unit by which to value the transaction, such as the US
dollar
F. revenue
recognition
principle
G. expense
recognition
principle
vi. period of time in which you performed the service or gave the customer the
product is the period in which revenue is recognized
vii. business may only report activities on financial statements that are specifically
related to company operations, not those activities that affect the owner personally
EA2.
3.2 Consider the following accounts, and determine if the account is an asset (A), a liability (L), or
equity (E).
A. Accounts Payable
B. Cash
C. Dividends
D. Notes Payable
EA3.
3.2 Provide the missing amounts of the accounting equation for each of the following companies.
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 3 Analyzing and Recording Transactions
183
EA4. | {"source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "producer": "Prince 11 (www.princexml.com)", "upload_timestamp": "2026-02-07T07:23:08.167529", "title": "Principles of Accounting, Volume 1: Financial Accounting", "moddate": "2020-08-05T15:26:11-05:00", "total_pages": 1055, "uploaded_via": "batch_uploader", "creationdate": "2019-04-24T10:32:54-05:00", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_name": "FinancialAccounting-OP.pdf", "batch_upload": true, "file_type": ".pdf", "file_size_mb": 156.7} |
80bb58c0-5774-4a14-975e-d1c7cf992d57 | [
-0.007235681172460318,
0.03462054952979088,
0.0008674018899910152,
-0.03799154981970787,
-0.02958199940621853,
0.04695695638656616,
0.017983626574277878,
-0.025791164487600327,
0.04618922248482704,
-0.03360157832503319,
0.044193074107170105,
-0.011243697255849838,
-0.008206052705645561,
-0... | This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 3 Analyzing and Recording Transactions
183
EA4.
3.2 Identify the financial statement on which each of the following accounts would appear: the income
statement (IS), the retained earnings statement (RE), or the Balance Sheet (BS).
A.
Insurance Expense
B. Accounts Receivable
C. Office Supplies
D. Sales Revenue
E. Common Stock
F. Notes Payable
EA5.
3.2 Cromwell Company has the following trial balance account balances, given in no certain order, as
of December 31, 2018. Using the information provided, prepare Cromwell’s annual financial statements (omit
the Statement of Cash Flows).
EA6.
3.3 From the following list, identify which items are considered original sources:
A. prepaid insurance
B. bank statement
C.
sales ticket
D. general journal
E.
trial balance
F. balance sheet
G.
H.
I.
J.
telephone bill
invoice from supplier
company sales account
income statement
184 | {"file_size_mb": 156.7, "uploaded_via": "batch_uploader", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_name": "FinancialAccounting-OP.pdf", "file_type": ".pdf", "batch_upload": true, "total_pages": 1055, "title": "Principles of Accounting, Volume 1: Financial Accounting", "creator": "DocBook XSL Stylesheets V1.79.1", "moddate": "2020-08-05T15:26:11-05:00", "creationdate": "2019-04-24T10:32:54-05:00", "producer": "Prince 11 (www.princexml.com)", "upload_timestamp": "2026-02-07T07:23:08.167529", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf"} |
52293455-8034-45af-b2d0-0edb0576990f | [
-0.012162283062934875,
0.04499276354908943,
-0.0020164537709206343,
-0.07300934940576553,
-0.04151540249586105,
0.03439905494451523,
0.08822939544916153,
0.008522129617631435,
0.027086080983281136,
0.009521973319351673,
0.07144057750701904,
-0.042751602828502655,
0.03851661831140518,
-0.07... | B. bank statement
C.
sales ticket
D. general journal
E.
trial balance
F. balance sheet
G.
H.
I.
J.
telephone bill
invoice from supplier
company sales account
income statement
184
Chapter 3 Analyzing and Recording Transactions
EA7.
3.4 Indicate what impact the following transactions would have on the accounting equation, Assets =
Liabilities + Equity.
Impact 1
Impact 2
A.
B.
C.
D.
E.
Received cash from issuance of common stock
Sold goods to customers on account
Collected cash from customer sales made in previous month
Paid cash to vendors for supplies delivered last month
Purchased inventory on account
Table 3.4
EA8.
3.4 For the following accounts please indicate whether the normal balance is a debit or a credit.
A. Sales
B. Dividends
C. Office Supplies
D. Retained Earnings
E. Accounts Receivable
F.
Prepaid Rent
G. Prepaid Insurance
H. Wages Payable
I.
Building
J. Wages Expense
EA9. | {"producer": "Prince 11 (www.princexml.com)", "file_type": ".pdf", "creationdate": "2019-04-24T10:32:54-05:00", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_name": "FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "creator": "DocBook XSL Stylesheets V1.79.1", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "total_pages": 1055, "batch_upload": true, "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_size_mb": 156.7, "moddate": "2020-08-05T15:26:11-05:00", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader"} |
216a2a87-5261-4404-a459-3c5f0595fea6 | [
-0.01326744630932808,
0.041137151420116425,
-0.027296893298625946,
-0.03822578862309456,
0.01124657317996025,
0.052262116223573685,
0.08695884793996811,
-0.006714935880154371,
0.019537463784217834,
0.044809091836214066,
0.08263541758060455,
-0.03502258285880089,
0.027943292632699013,
-0.05... | A. Sales
B. Dividends
C. Office Supplies
D. Retained Earnings
E. Accounts Receivable
F.
Prepaid Rent
G. Prepaid Insurance
H. Wages Payable
I.
Building
J. Wages Expense
EA9.
3.4 Indicate what impact the following transactions would have on the accounting equation, Assets =
Liabilities + Equity.
Impact 1
Impact 2
A.
B.
C.
D.
E.
Paid monthly note payment to bank
Sold inventory on account
Bought supplies, to be paid for next month
Received cash from sales this month
Paid for inventory purchased on account last month
Table 3.5
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 3 Analyzing and Recording Transactions
185
EA10.
3.4 Identify the normal balance for each of the following accounts. Choose Dr for Debit; Cr for Credit.
Normal balance
Utilities Expense
Cash
Equipment
Rent Revenue
Preferred Stock
Interest Payable
A.
B.
C.
D.
E.
F.
Table 3.6
EA11. | {"moddate": "2020-08-05T15:26:11-05:00", "creator": "DocBook XSL Stylesheets V1.79.1", "total_pages": 1055, "file_type": ".pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "batch_upload": true, "title": "Principles of Accounting, Volume 1: Financial Accounting", "creationdate": "2019-04-24T10:32:54-05:00", "file_name": "FinancialAccounting-OP.pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "uploaded_via": "batch_uploader", "upload_timestamp": "2026-02-07T07:23:08.167529", "producer": "Prince 11 (www.princexml.com)", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf"} |
00f11f28-c714-4368-9780-e17f9d9875d7 | [
-0.01814202219247818,
0.010552660562098026,
-0.012711203657090664,
-0.06943682581186295,
0.005427306517958641,
0.00841432437300682,
0.05076691135764122,
0.0200667604804039,
-0.015083669684827328,
0.05199028179049492,
0.04475432261824608,
-0.0604838989675045,
0.001742852502502501,
-0.021289... | Normal balance
Utilities Expense
Cash
Equipment
Rent Revenue
Preferred Stock
Interest Payable
A.
B.
C.
D.
E.
F.
Table 3.6
EA11.
3.4 Identify whether each of the following transactions would be recorded with a debit (Dr) or credit
Debit or credit?
(Cr) entry.
A.
B.
C.
D.
E.
F.
Table 3.7
Cash increase
Supplies decrease
Accounts Payable increase
Common Stock decrease
Interest Payable decrease
Notes Payable decrease
186
Chapter 3 Analyzing and Recording Transactions
EA12.
3.4 Identify whether each of the following transactions would be recorded with a debit (Dr) or credit
(Cr) entry.
Debit or credit?
A.
B.
C.
D.
E.
F.
Equipment decrease
Common Stock Sold increase
Gas and Oil Expense increase
Service revenue decrease
Miscellaneous Expense decrease
Bonds Payable decrease
Table 3.8
EA13.
3.4 Identify whether ongoing transactions posted to the following accounts would normally have only | {"total_pages": 1055, "creationdate": "2019-04-24T10:32:54-05:00", "title": "Principles of Accounting, Volume 1: Financial Accounting", "moddate": "2020-08-05T15:26:11-05:00", "upload_timestamp": "2026-02-07T07:23:08.167529", "uploaded_via": "batch_uploader", "file_size_mb": 156.7, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_name": "FinancialAccounting-OP.pdf", "file_type": ".pdf", "batch_upload": true, "producer": "Prince 11 (www.princexml.com)", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf"} |
a2ef68c7-97b4-4e7e-8880-79045be1e2c9 | [
-0.018168017268180847,
0.03256838396191597,
-0.030595336109399796,
-0.021411119028925896,
0.05450766906142235,
-0.0041354685090482235,
0.06808850169181824,
-0.002603682456538081,
0.003993373829871416,
0.047548383474349976,
0.02483905479311943,
-0.07509683072566986,
-0.015466246753931046,
-... | Miscellaneous Expense decrease
Bonds Payable decrease
Table 3.8
EA13.
3.4 Identify whether ongoing transactions posted to the following accounts would normally have only
debit entries (Dr), only credit entries (Cr), or both debit and credit entries (both).
Type of entry
Accounts Payable
Cash
Gas and Oil Expense
Rent Revenue
Supplies Expense
Common Stock
A.
B.
C.
D.
E.
F.
Table 3.9
EA14.
3.5 Determine whether the balance in each of the following accounts increases with a debit or a
credit.
A. Cash
B. Common Stock
C. Equipment
D. Accounts Payable
E.
F.
Fees Earned
Electricity Expense
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 3 Analyzing and Recording Transactions
187
EA15.
3.5 Journalize for Harper and Co. each of the following transactions or state no entry required and
explain why. Be sure to follow proper journal writing rules. | {"file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "creationdate": "2019-04-24T10:32:54-05:00", "moddate": "2020-08-05T15:26:11-05:00", "batch_upload": true, "total_pages": 1055, "producer": "Prince 11 (www.princexml.com)", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "file_size_mb": 156.7, "creator": "DocBook XSL Stylesheets V1.79.1", "file_type": ".pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_name": "FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader"} |
f05e5b5d-97aa-4f7b-9f04-75a2482e7849 | [
-0.01202948484569788,
0.007576518692076206,
0.009181533008813858,
-0.0323047935962677,
-0.08295273780822754,
-0.04379619285464287,
0.05215191841125488,
0.004712036345154047,
0.048554450273513794,
0.056757852435112,
0.02461406961083412,
-0.010340167209506035,
-0.016648419201374054,
-0.02444... | 187
EA15.
3.5 Journalize for Harper and Co. each of the following transactions or state no entry required and
explain why. Be sure to follow proper journal writing rules.
A. A corporation is started with an investment of $50,000 in exchange for stock.
B. Equipment worth $4,800 is ordered.
C. Office supplies worth $750 are purchased on account.
D. A part-time worker is hired. The employee will work 15–20 hours per week starting next Monday at a
rate of $18 per hour.
E.
The equipment is received along with the invoice. Payment is due in three equal monthly installments,
with the first payment due in sixty days.
EA16.
3.5 Discuss how each of the following transactions for Watson, International, will affect assets,
liabilities, and stockholders’ equity, and prove the company’s accounts will still be in balance.
A. An investor invests an additional $25,000 into a company receiving stock in exchange. | {"file_type": ".pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_size_mb": 156.7, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "total_pages": 1055, "uploaded_via": "batch_uploader", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00", "creator": "DocBook XSL Stylesheets V1.79.1", "creationdate": "2019-04-24T10:32:54-05:00", "file_name": "FinancialAccounting-OP.pdf", "batch_upload": true, "producer": "Prince 11 (www.princexml.com)"} |
ee272ad3-bffd-4557-a436-0ce1565e2556 | [
-0.03887161612510681,
0.039382778108119965,
0.03392299264669418,
-0.04807419702410698,
0.0039057964459061623,
0.004520459100604057,
0.07822921872138977,
0.01686633937060833,
0.02908509038388729,
0.03990659862756729,
0.050107091665267944,
-0.08228277415037155,
-0.03167442977428436,
-0.08044... | liabilities, and stockholders’ equity, and prove the company’s accounts will still be in balance.
A. An investor invests an additional $25,000 into a company receiving stock in exchange.
B. Services are performed for customers for a total of $4,500. Sixty percent was paid in cash, and the
remaining customers asked to be billed.
C. An electric bill was received for $35. Payment is due in thirty days.
D. Part-time workers earned $750 and were paid.
E.
The electric bill in “C” is paid.
EA17.
3.5 For each item that follows, indicate whether a debit or a credit applies.
A.
B.
C.
D.
increase in prepaid insurance
increase in utilities expense
increase in commissions earned
increase in supplies
E. decrease in retained earnings
F. decrease in income taxes payable
G.
H.
I.
J.
increase in unearned revenue
increase in salaries expense
decrease in notes receivable
increase in common stock
EA18. | {"creator": "DocBook XSL Stylesheets V1.79.1", "title": "Principles of Accounting, Volume 1: Financial Accounting", "producer": "Prince 11 (www.princexml.com)", "total_pages": 1055, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader", "batch_upload": true, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "file_size_mb": 156.7, "file_name": "FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_type": ".pdf", "moddate": "2020-08-05T15:26:11-05:00", "creationdate": "2019-04-24T10:32:54-05:00"} |
c2638f83-99ed-41a0-b9e7-f295eac80837 | [
-0.015132788568735123,
0.019881471991539,
-0.040076084434986115,
-0.0439702607691288,
-0.036801863461732864,
0.042716123163700104,
0.06891341507434845,
-0.019741423428058624,
0.048986464738845825,
0.0017136645037680864,
0.06240607798099518,
-0.014567769132554531,
-0.006042173597961664,
-0.... | F. decrease in income taxes payable
G.
H.
I.
J.
increase in unearned revenue
increase in salaries expense
decrease in notes receivable
increase in common stock
EA18.
3.5 Indicate whether each account that follows has a normal debit or credit balance.
A. Unearned Revenue
B. Office Machines
C. Prepaid Rent
D. Cash
E.
F.
Legal Fees Earned
Salaries Payable
G. Dividends
H. Accounts Receivable
I.
J.
Advertising Expense
Retained Earnings
188
Chapter 3 Analyzing and Recording Transactions
EA19.
3.5 A business has the following transactions:
• The business is started by receiving cash from an investor in exchange for common stock $20,000
• The business purchases supplies on account $500
• The business purchases furniture on account $2,000
• The business renders services to various clients on account totaling $9,000
• The business pays salaries $2,000
• The business pays this month’s rent $3,000
• The business pays for the supplies purchased on account. | {"file_name": "FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "upload_timestamp": "2026-02-07T07:23:08.167529", "title": "Principles of Accounting, Volume 1: Financial Accounting", "uploaded_via": "batch_uploader", "producer": "Prince 11 (www.princexml.com)", "file_type": ".pdf", "creationdate": "2019-04-24T10:32:54-05:00", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "creator": "DocBook XSL Stylesheets V1.79.1", "batch_upload": true, "total_pages": 1055, "moddate": "2020-08-05T15:26:11-05:00", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf"} |
a353d19f-a8a0-4e13-8b0b-c3dc437d9401 | [
0.008405662141740322,
0.030585570260882378,
-0.06704524159431458,
-0.016157379373908043,
-0.0843527764081955,
0.0355047807097435,
0.007238828577101231,
0.012569590471684933,
0.00046220506192184985,
0.045473307371139526,
0.03170941025018692,
-0.10279709100723267,
-0.011946502141654491,
-0.0... | • The business pays salaries $2,000
• The business pays this month’s rent $3,000
• The business pays for the supplies purchased on account.
• The business collects from one of its clients for services rendered earlier in the month $1,500.
What is total income for the month?
EA20.
3.5 Prepare journal entries to record the following transactions.
A.
January 22, purchased, an asset, merchandise inventory
B. on account for $2,800.
C.
February 10, paid creditor for part of January 22 purchase, $1,600
EA21.
3.5 Prepare journal entries to record the following transactions.
A.
B.
C.
July 1, issued common stock for cash, $15,000
July 15, purchased supplies, on account, $1,800
July 25, billed customer for accounting services provided, $950
EA22.
3.5 Prepare journal entries to record the following transactions.
A. March 1, purchased land for cash, $20,000
B. March 11, purchased merchandise inventory, on account, $18,500 | {"source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "batch_upload": true, "title": "Principles of Accounting, Volume 1: Financial Accounting", "moddate": "2020-08-05T15:26:11-05:00", "creationdate": "2019-04-24T10:32:54-05:00", "uploaded_via": "batch_uploader", "creator": "DocBook XSL Stylesheets V1.79.1", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_name": "FinancialAccounting-OP.pdf", "producer": "Prince 11 (www.princexml.com)", "file_type": ".pdf", "file_size_mb": 156.7, "upload_timestamp": "2026-02-07T07:23:08.167529", "total_pages": 1055} |
6a5f2e17-3f22-41b6-b62f-6f1bc29a3f1c | [
-0.001714266138151288,
0.031230518594384193,
-0.04055102542042732,
-0.06648099422454834,
-0.044768307358026505,
-0.003788049565628171,
0.0775107890367508,
0.0391964316368103,
0.04176298528909683,
0.0793977901339531,
0.08966157585382462,
-0.04021438583731651,
-0.000483245006762445,
-0.04330... | EA22.
3.5 Prepare journal entries to record the following transactions.
A. March 1, purchased land for cash, $20,000
B. March 11, purchased merchandise inventory, on account, $18,500
C. March 15, Sold merchandise to customer for cash, $555
EA23.
3.5 Post the following February transactions to T-accounts for Accounts Receivable and Cash,
indicating the ending balance (assume no beginning balances in these accounts).
A. provided legal services to customers for cash, $5,600
B. provided legal services to customers on account, $4,700
C.
collected cash from customer accounts, $3,500
EA24.
3.5 Post the following November transactions to T-accounts for Accounts Payable and Inventory,
indicating the ending balance (assume no beginning balances in these accounts).
A. purchased merchandise inventory on account, $22,000
B. paid vendors for part of inventory purchased earlier in month, $14,000
C. purchased merchandise inventory for cash, $6,500
EA25. | {"source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader", "total_pages": 1055, "file_type": ".pdf", "moddate": "2020-08-05T15:26:11-05:00", "producer": "Prince 11 (www.princexml.com)", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_name": "FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "upload_timestamp": "2026-02-07T07:23:08.167529", "creationdate": "2019-04-24T10:32:54-05:00", "batch_upload": true, "title": "Principles of Accounting, Volume 1: Financial Accounting"} |
4c8d942f-089c-4c58-8e51-8b2d9b979556 | [
0.014821619726717472,
0.029351433739066124,
-0.07221667468547821,
-0.0502716563642025,
-0.035721052438020706,
0.03236889839172363,
0.07318905740976334,
0.04338758811354637,
0.01941276341676712,
0.02523105777800083,
0.030328786000609398,
-0.059037551283836365,
-0.008769150823354721,
-0.0654... | A. purchased merchandise inventory on account, $22,000
B. paid vendors for part of inventory purchased earlier in month, $14,000
C. purchased merchandise inventory for cash, $6,500
EA25.
3.6 Prepare an unadjusted trial balance, in correct format, from the alphabetized account
information as follows. Assume all accounts have normal balances.
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 3 Analyzing and Recording Transactions
189
B Exercise Set B
EB1.
3.1 Match the correct term with its definition.
A. Financial
Accounting
Standards Board
(FASB)
B. generally
accepted
accounting
principles (GAAP)
i. used by the FASB, which is a set of concepts that guide financial reporting
ii. independent, nonprofit organization that sets financial accounting and reporting
standards for both public- and private-sector businesses that use generally accepted
accounting principles (GAAP) here in the United States
C. Securities and | {"file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_type": ".pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader", "total_pages": 1055, "producer": "Prince 11 (www.princexml.com)", "upload_timestamp": "2026-02-07T07:23:08.167529", "file_name": "FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "batch_upload": true, "creationdate": "2019-04-24T10:32:54-05:00", "file_size_mb": 156.7} |
d4ef0fdd-e08b-4fd7-a02a-7dee5bf0a161 | [
0.019921133294701576,
0.020630495622754097,
-0.028599046170711517,
-0.050839126110076904,
-0.053801361471414566,
0.04017369821667671,
0.04171633720397949,
-0.02707064338028431,
0.06715422123670578,
0.006746609695255756,
0.011874108575284481,
-0.034334272146224976,
-0.031352121382951736,
-0... | standards for both public- and private-sector businesses that use generally accepted
accounting principles (GAAP) here in the United States
C. Securities and
iii. standards, procedures, and principles companies must follow when preparing
Exchange
Commission
(SEC)
their financial statements
D. conceptual
iv. assumes a business will continue to operate in the foreseeable future
framework
E. going concern
v. independent federal agency protecting the interests of investors, regulating stock
assumption
markets, and ensuring companies adhere to GAAP requirements
F. time period
vi. companies can present useful information in shorter time periods such as years,
assumption
quarters, or months
EB2.
3.2 Consider the following accounts and determine if the account is an asset (A), a liability (L), or
equity (E).
A. Accounts Receivable
B. Sales Revenue
C.
Land
D. Unearned Revenue
EB3. | {"producer": "Prince 11 (www.princexml.com)", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader", "batch_upload": true, "file_type": ".pdf", "file_name": "FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "total_pages": 1055, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "upload_timestamp": "2026-02-07T07:23:08.167529", "creationdate": "2019-04-24T10:32:54-05:00", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_size_mb": 156.7} |
5af4ab25-fddc-4e9e-9253-892f3e6f5818 | [
-0.003198581049218774,
0.05705868452787399,
0.01188080757856369,
-0.051685743033885956,
0.016507960855960846,
0.047867126762866974,
0.08806318789720535,
-0.01918969303369522,
0.05906401202082634,
0.011879210360348225,
0.06884182244539261,
-0.07577488571405411,
0.05778694897890091,
-0.10924... | 3.2 Consider the following accounts and determine if the account is an asset (A), a liability (L), or
equity (E).
A. Accounts Receivable
B. Sales Revenue
C.
Land
D. Unearned Revenue
EB3.
3.2 Provide the missing amounts of the accounting equation for each of the following companies.
190
Chapter 3 Analyzing and Recording Transactions
EB4.
3.3 From the following list, identify which items are considered original sources:
A. accounts receivable
B.
receipt from post office for post office box
C. purchase order
D. general ledger
E.
F.
adjusted trial balance
statement of retained earnings
G. electric bill
H. packing slip
I.
J.
company expense account
statement of cash flows
EB5.
3.4 Indicate what impact the following transactions would have on the accounting equation, Assets =
Liabilities + Equity.
Impact 1
Impact 2
A.
B.
C.
D.
E.
Paid this month’s utility bill
Purchased supplies for cash
Received cash for services performed | {"batch_upload": true, "uploaded_via": "batch_uploader", "file_size_mb": 156.7, "upload_timestamp": "2026-02-07T07:23:08.167529", "producer": "Prince 11 (www.princexml.com)", "moddate": "2020-08-05T15:26:11-05:00", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "total_pages": 1055, "creator": "DocBook XSL Stylesheets V1.79.1", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_type": ".pdf", "file_name": "FinancialAccounting-OP.pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting"} |
3a50b1d2-9889-4b39-bc37-bd124ed278e9 | [
-0.029942546039819717,
-0.038240958005189896,
-0.014677261002361774,
-0.06634634733200073,
0.012897051870822906,
-0.002962377853691578,
0.11619637906551361,
-0.018110448494553566,
0.014705996960401535,
0.031807489693164825,
0.09381942451000214,
-0.05193784460425377,
0.03556809946894646,
-0... | Liabilities + Equity.
Impact 1
Impact 2
A.
B.
C.
D.
E.
Paid this month’s utility bill
Purchased supplies for cash
Received cash for services performed
Collected cash from customer accounts receivable
Paid creditors on account
Table 3.10
EB6.
3.4 For the following accounts indicate whether the normal balance is a debit or a credit.
A. Unearned Revenue
B.
Interest Expense
C. Rent Expense
D. Rent Revenue
E. Accounts Payable
F. Cash
G. Supplies
H. Accounts Payable
I.
Equipment
J. Utilities Expense
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 3 Analyzing and Recording Transactions
191
EB7.
3.4 Which two accounts are affected by each of the following transactions?
Account 1
Account 2
A.
B.
C.
D.
E.
Received cash from issuance of common stock
Purchased land by issuing a note payable
Paid balance on account for last month’s inventory purchases
Received cash from customers for this month’s sales | {"source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "total_pages": 1055, "creationdate": "2019-04-24T10:32:54-05:00", "title": "Principles of Accounting, Volume 1: Financial Accounting", "moddate": "2020-08-05T15:26:11-05:00", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_name": "FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "creator": "DocBook XSL Stylesheets V1.79.1", "file_type": ".pdf", "file_size_mb": 156.7, "batch_upload": true, "producer": "Prince 11 (www.princexml.com)", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader"} |
94528875-4aa7-4d76-bc2b-528ad899ec50 | [
-0.040699854493141174,
0.020965104922652245,
-0.017522355541586876,
-0.11713272333145142,
-0.025733787566423416,
0.019200410693883896,
0.08135704696178436,
0.038847289979457855,
0.004974602721631527,
0.05937400832772255,
0.04438527300953865,
-0.08981897681951523,
0.0036985245533287525,
-0.... | Purchased land by issuing a note payable
Paid balance on account for last month’s inventory purchases
Received cash from customers for this month’s sales
Sold merchandise to customers on account
Table 3.11
EB8.
3.4 Identify the normal balance for each of the following accounts. Choose Dr for Debit; Cr for Credit.
Normal balance
Insurance Expense
Accounts Receivable
Office Supplies
Sales Revenue
Common Stock
Notes Payable
A.
B.
C.
D.
E.
F.
Table 3.12
192
Chapter 3 Analyzing and Recording Transactions
EB9.
3.4 Identify whether each of the following transactions would be recorded with a debit (Dr) or credit
(Cr) entry.
Debit or credit?
A.
B.
C.
D.
E.
F.
Cash decrease
Supplies increase
Accounts Payable decrease
Common Stock increase
Accounts Payable increase
Notes Payable increase
Table 3.13
EB10.
3.4 Identify whether each of the following transactions would be recorded with a debit (Dr) or credit
(Cr) entry.
Debit or credit?
A.
B.
C.
D.
E. | {"title": "Principles of Accounting, Volume 1: Financial Accounting", "producer": "Prince 11 (www.princexml.com)", "upload_timestamp": "2026-02-07T07:23:08.167529", "file_type": ".pdf", "file_name": "FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00", "batch_upload": true, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "uploaded_via": "batch_uploader", "creator": "DocBook XSL Stylesheets V1.79.1", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "creationdate": "2019-04-24T10:32:54-05:00", "total_pages": 1055} |
c74d0eda-9cf2-4dd8-a15d-1845c0c720ba | [
-0.073862724006176,
-0.008548925630748272,
-0.039674267172813416,
-0.10757919400930405,
0.00460646441206336,
0.013515259139239788,
0.0742466002702713,
0.0233180932700634,
-0.0007603915873914957,
0.05319492146372795,
0.04871022701263428,
-0.07553225010633469,
0.036556802690029144,
-0.007633... | Notes Payable increase
Table 3.13
EB10.
3.4 Identify whether each of the following transactions would be recorded with a debit (Dr) or credit
(Cr) entry.
Debit or credit?
A.
B.
C.
D.
E.
F.
Equipment increase
Dividends Paid increase
Repairs Expense increase
Service revenue increase
Miscellaneous Expense increase
Bonds Payable increase
Table 3.14
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 3 Analyzing and Recording Transactions
193
EB11.
3.4 Identify whether ongoing transactions posted to the following accounts would normally have only
debit entries (Dr), only credit entries (Cr), or both debit and credit entries (both).
Type of entry
Notes Payable
Accounts Receivable
Utilities Expense
Sales Revenue
Insurance Expense
Dividends
A.
B.
C.
D.
E.
F.
Table 3.15
EB12.
3.2
3.4 West End Inc., an auto mechanic shop, has the following account balances, given in no | {"upload_timestamp": "2026-02-07T07:23:08.167529", "batch_upload": true, "total_pages": 1055, "creationdate": "2019-04-24T10:32:54-05:00", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "uploaded_via": "batch_uploader", "file_size_mb": 156.7, "moddate": "2020-08-05T15:26:11-05:00", "file_name": "FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "producer": "Prince 11 (www.princexml.com)", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_type": ".pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting"} |
d6da2174-ca8d-42a1-89c7-8aef474ed488 | [
-0.03889797627925873,
0.05023370310664177,
-0.01013238076120615,
-0.07319315522909164,
-0.024696171283721924,
0.05195152014493942,
0.1136353462934494,
0.00832752138376236,
0.044254105538129807,
0.017939524725079536,
0.0469067357480526,
-0.04212973639369011,
0.027010468766093254,
-0.0509794... | Sales Revenue
Insurance Expense
Dividends
A.
B.
C.
D.
E.
F.
Table 3.15
EB12.
3.2
3.4 West End Inc., an auto mechanic shop, has the following account balances, given in no
certain order, for the quarter ended March 31, 2019. Based on the information provided, prepare West End’s
annual financial statements (omit the Statement of Cash Flows).
Prepare West End’s annual financial statements. (Omit the Statement of Cash Flows.)
EB13.
3.5 State whether the balance in each of the following accounts increases with a debit or a credit.
A. Office Supplies
B. Retained Earnings
C.
Salaries Expense
D. Accounts Receivable
E.
Service Revenue
194
Chapter 3 Analyzing and Recording Transactions
EB14.
3.5 Journalize each of the following transactions or state no entry required and explain why. Be sure
to follow proper journal writing rules.
A. A company is started with an investment of a machine worth $40,000. Common stock is received in
exchange. | {"title": "Principles of Accounting, Volume 1: Financial Accounting", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "producer": "Prince 11 (www.princexml.com)", "file_type": ".pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "creationdate": "2019-04-24T10:32:54-05:00", "creator": "DocBook XSL Stylesheets V1.79.1", "file_size_mb": 156.7, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_name": "FinancialAccounting-OP.pdf", "batch_upload": true, "moddate": "2020-08-05T15:26:11-05:00", "uploaded_via": "batch_uploader", "total_pages": 1055, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf"} |
a1cd3b33-7af2-4c14-9bcb-488ef9c2e33e | [
-0.01612522266805172,
0.06885707378387451,
0.0011260240571573377,
-0.048150964081287384,
-0.0421726368367672,
-0.0060698045417666435,
0.0385049544274807,
-0.0022735067177563906,
0.053205426782369614,
0.0518578477203846,
0.03922891244292259,
-0.006485159043222666,
0.027305277064442635,
-0.0... | to follow proper journal writing rules.
A. A company is started with an investment of a machine worth $40,000. Common stock is received in
exchange.
B. Office furniture is ordered. The furniture worth $7,850 will be delivered in one week. The payment will
be due forty-five days after delivery.
C. An advertisement was run in the newspaper at a total cost of $250. Cash was paid when the order was
placed.
D. The office furniture is delivered.
E.
Services are performed for a client. The client was billed for $535.
EB15.
3.5 Discuss how each of the following transactions will affect assets, liabilities, and stockholders’
equity, and prove the company’s accounts will still be in balance.
A. A company purchased $450 worth of office supplies on credit.
B. The company parking lot was plowed after a blizzard. A check for $75 was given to the plow truck
operator.
C. $250 was paid on account.
D. A customer paid $350 on account. | {"producer": "Prince 11 (www.princexml.com)", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "total_pages": 1055, "creator": "DocBook XSL Stylesheets V1.79.1", "file_type": ".pdf", "file_size_mb": 156.7, "batch_upload": true, "title": "Principles of Accounting, Volume 1: Financial Accounting", "upload_timestamp": "2026-02-07T07:23:08.167529", "creationdate": "2019-04-24T10:32:54-05:00", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_name": "FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00", "uploaded_via": "batch_uploader"} |
9a112e2c-0a26-4822-b82e-832e277b1994 | [
-0.011440888047218323,
0.07003135234117508,
0.03442103788256645,
-0.05586777254939079,
0.019185760989785194,
0.03195645287632942,
0.08741933852434158,
0.0014732923591509461,
0.022602414712309837,
0.021943645551800728,
0.06354429572820663,
-0.04945419356226921,
0.033172838389873505,
-0.0155... | B. The company parking lot was plowed after a blizzard. A check for $75 was given to the plow truck
operator.
C. $250 was paid on account.
D. A customer paid $350 on account.
E. Provided services for a customer, $500. The customer asked to be billed.
EB16.
3.5 For each of the following items, indicate whether a debit or a credit applies.
A.
increase in retained earnings
B. decrease in prepaid rent
C.
increase in dividends
D. decrease in salaries payable
E.
increase in accounts receivable
F. decrease in common stock
G. decrease in prepaid insurance
H. decrease in advertising expense
I.
J.
decrease in unearned service fees
increase in office equipment
EB17.
3.5 Indicate whether each of the following accounts has a normal debit or credit balance.
A. prepaid landscaping expense
B.
common stock
C. delivery vans
D. maintenance expense
E.
F.
retained earnings
office supplies
G.
revenue earned
H. accounts payable
I.
J.
unearned painting revenue | {"total_pages": 1055, "uploaded_via": "batch_uploader", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "producer": "Prince 11 (www.princexml.com)", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_name": "FinancialAccounting-OP.pdf", "file_type": ".pdf", "creationdate": "2019-04-24T10:32:54-05:00", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "batch_upload": true, "creator": "DocBook XSL Stylesheets V1.79.1", "file_size_mb": 156.7, "upload_timestamp": "2026-02-07T07:23:08.167529"} |
62d2623d-03b3-4a78-bd19-451ae55404f5 | [
-0.029604384675621986,
0.020931636914610863,
-0.022368507459759712,
-0.07674220204353333,
-0.04657025635242462,
-0.028951074928045273,
0.09745310246944427,
-0.01356677059084177,
0.015812108293175697,
0.03196968138217926,
0.024141758680343628,
0.006529700476676226,
-0.0031869960948824883,
-... | B.
common stock
C. delivery vans
D. maintenance expense
E.
F.
retained earnings
office supplies
G.
revenue earned
H. accounts payable
I.
J.
unearned painting revenue
interest payable
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 3 Analyzing and Recording Transactions
195
EB18.
3.5 Krespy Corp. has a cash balance of $7,500 before the following transactions occur:
A.
B.
C.
D.
received customer payments of $965
supplies purchased on account $435
services worth $850 performed, 25% is paid in cash the rest will be billed
corporation pays $275 for an ad in the newspaper
E. bill is received for electricity used $235.
F. dividends of $2,500 are distributed
What is the balance in cash after these transactions are journalized and posted?
EB19.
3.5 A business has the following transactions:
A. The business is started by receiving cash from an investor in exchange for common stock $10,000. | {"batch_upload": true, "file_type": ".pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader", "title": "Principles of Accounting, Volume 1: Financial Accounting", "moddate": "2020-08-05T15:26:11-05:00", "creator": "DocBook XSL Stylesheets V1.79.1", "upload_timestamp": "2026-02-07T07:23:08.167529", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_name": "FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "file_size_mb": 156.7, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "total_pages": 1055, "producer": "Prince 11 (www.princexml.com)"} |
b65d0ff0-a66f-4550-a5c2-af46fbd7b238 | [
-0.03970473259687424,
0.03549870476126671,
-0.031003344804048538,
-0.06767501682043076,
-0.09434450417757034,
0.036677442491054535,
0.05222723260521889,
0.05589747428894043,
0.005744996014982462,
0.05385777726769447,
0.025207702070474625,
-0.07629004120826721,
0.017077604308724403,
-0.0591... | EB19.
3.5 A business has the following transactions:
A. The business is started by receiving cash from an investor in exchange for common stock $10,000.
B. Rent of $1,250 is paid for the first month.
C. Office supplies are purchased for $375.
D. Services worth $3,450 are performed. Cash is received for half.
E. Customers pay $1,250 for services to be performed next month.
F.
$6,000 is paid for a one year insurance policy.
G. We receive 25% of the money owed by customers in “D”.
H. A customer has placed an order for $475 of services to be done this coming week.
How much total revenue does the company have?
EB20.
3.5 Prepare journal entries to record the following transactions.
A. November 19, purchased merchandise inventory, on account, $12,000
B. November 29, paid creditor for part of November 19 purchase, $10,000
EB21.
3.5 Prepare journal entries to record the following transactions:
A. December 1, collected balance due from customer account, $5,500 | {"total_pages": 1055, "title": "Principles of Accounting, Volume 1: Financial Accounting", "batch_upload": true, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "uploaded_via": "batch_uploader", "file_size_mb": 156.7, "file_name": "FinancialAccounting-OP.pdf", "producer": "Prince 11 (www.princexml.com)", "creator": "DocBook XSL Stylesheets V1.79.1", "moddate": "2020-08-05T15:26:11-05:00", "file_type": ".pdf", "creationdate": "2019-04-24T10:32:54-05:00", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167529"} |
708be634-ee6c-414d-b841-e52e9058dc8d | [
-0.04681234061717987,
0.022026685997843742,
-0.019882649183273315,
-0.03294512629508972,
-0.0469190739095211,
0.03194563090801239,
0.03974176570773125,
0.030162978917360306,
-0.009623554535210133,
0.05150572955608368,
0.07665273547172546,
-0.0910118892788887,
0.0044051711447536945,
-0.0537... | EB21.
3.5 Prepare journal entries to record the following transactions:
A. December 1, collected balance due from customer account, $5,500
B. December 12, paid creditors for supplies purchased last month, $4,200
C. December 31, paid cash dividend to stockholders, $1,000
EB22.
3.5 Prepare journal entries to record the following transactions:
A. October 9, issued common stock in exchange for building, $40,000
B. October 12, purchased supplies on account, $3,600
C. October 24, paid cash dividend to stockholders, $2,500
EB23.
3.5 Post the following August transactions to T-accounts for Accounts Payable and Supplies,
indicating the ending balance (assume no beginning balances in these accounts):
A. purchased supplies on account, $600
B. paid vendors for supplies delivered earlier in month, $500
C. purchased supplies for cash, $450
EB24.
3.5 Post the following July transactions to T-accounts for Accounts Receivable and Cash, indicating | {"upload_timestamp": "2026-02-07T07:23:08.167529", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00", "producer": "Prince 11 (www.princexml.com)", "title": "Principles of Accounting, Volume 1: Financial Accounting", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "batch_upload": true, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_name": "FinancialAccounting-OP.pdf", "file_type": ".pdf", "total_pages": 1055, "uploaded_via": "batch_uploader", "file_size_mb": 156.7, "creationdate": "2019-04-24T10:32:54-05:00"} |
5fa34991-9e25-409d-9a80-fa2b04887aba | [
-0.06438048183917999,
0.09106232225894928,
0.02575385384261608,
-0.10948023200035095,
-0.05447826534509659,
0.009875529445707798,
0.059066832065582275,
0.01240062341094017,
-0.04066866636276245,
0.08214084804058075,
0.11727944761514664,
-0.051951814442873,
0.052486926317214966,
-0.04579453... | C. purchased supplies for cash, $450
EB24.
3.5 Post the following July transactions to T-accounts for Accounts Receivable and Cash, indicating
the ending balance (assume no beginning balances in these accounts):
A.
B.
C.
sold products to customers for cash, $8,500
sold products to customers on account, $2,900
collected cash from customer accounts, $1,600
196
Chapter 3 Analyzing and Recording Transactions
EB25.
3.6 Prepare an unadjusted trial balance, in correct format, from the alphabetized account
information as follows. Assume all accounts have normal balances.
Problem Set A
PA1.
3.1 For each of the following situations write the principle, assumption, or concept that justifies or
explains what occurred.
A. A landscaper received a customer’s order and cash prepayment to install sod at a house that would not
be ready for installation until March of next year. The owner should record the revenue from the | {"batch_upload": true, "creator": "DocBook XSL Stylesheets V1.79.1", "moddate": "2020-08-05T15:26:11-05:00", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader", "upload_timestamp": "2026-02-07T07:23:08.167529", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_size_mb": 156.7, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_type": ".pdf", "file_name": "FinancialAccounting-OP.pdf", "producer": "Prince 11 (www.princexml.com)", "creationdate": "2019-04-24T10:32:54-05:00", "total_pages": 1055} |
9239ff64-8935-4bf3-a55c-a8c69809f71e | [
0.009675567038357258,
0.08357540518045425,
0.0019158620852977037,
-0.027915650978684425,
-0.02635698951780796,
0.0025457856245338917,
0.015141557902097702,
-0.027929790318012238,
0.02581743337213993,
-0.0026078191585838795,
0.060050323605537415,
-0.0561501570045948,
0.042324937880039215,
-... | be ready for installation until March of next year. The owner should record the revenue from the
customer order in March of next year, not in December of this year.
B. A company divides its income statements into four quarters for the year.
C.
Land is purchased for $205,000 cash; the land is reported on the balance sheet of the purchaser at
$205,000.
D. Brandy’s Flower Shop is forecasting its balance sheet for the next five years.
E. When preparing financials for a company, the owner makes sure that the expense transactions are
kept separate from expenses of the other company that he owns.
F. A company records the expenses incurred to generate the revenues reported.
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 3 Analyzing and Recording Transactions
197
PA2.
3.2 Assuming the following account balances, what is the missing value?
PA3.
3.2 | {"source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "total_pages": 1055, "uploaded_via": "batch_uploader", "creator": "DocBook XSL Stylesheets V1.79.1", "producer": "Prince 11 (www.princexml.com)", "file_type": ".pdf", "moddate": "2020-08-05T15:26:11-05:00", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "batch_upload": true, "upload_timestamp": "2026-02-07T07:23:08.167529", "file_name": "FinancialAccounting-OP.pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "creationdate": "2019-04-24T10:32:54-05:00", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9"} |
f385ccbe-3e43-4a3a-9df8-fac17a11f261 | [
0.025304710492491722,
0.049462396651506424,
0.00468455022200942,
-0.03015313483774662,
0.017094850540161133,
0.07935475558042526,
0.05400075018405914,
-0.010632853023707867,
0.050777845084667206,
0.029248826205730438,
0.07281328737735748,
-0.0711553618311882,
-0.016032084822654724,
-0.1112... | 197
PA2.
3.2 Assuming the following account balances, what is the missing value?
PA3.
3.2
3.4 Assuming the following account balance changes for the period, what is the missing value?
PA4.
3.2
3.4 Assuming the following account balance changes for the period, what is the missing value?
PA5.
3.2
3.4 Identify the financial statement on which each of the following account categories would
appear: the balance sheet (BS), the income statement (IS), or the retained earnings statement (RE). Indicate
the normal balance (Dr for debit; Cr for credit) for each account category.
Financial statement
Normal balance
Assets
Common stock
Dividends
Expenses
Liabilities
Revenue
Table 3.16
198
Chapter 3 Analyzing and Recording Transactions
PA6.
3.4 Indicate what impact (+ for increase; – for decrease) the following transactions would have on the
accounting equation, Assets = Liabilities + Equity.
Impact 1
Impact 2
A.
B.
C.
D.
E.
Issued stock for cash | {"uploaded_via": "batch_uploader", "creator": "DocBook XSL Stylesheets V1.79.1", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_size_mb": 156.7, "batch_upload": true, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00", "total_pages": 1055, "file_name": "FinancialAccounting-OP.pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "producer": "Prince 11 (www.princexml.com)", "creationdate": "2019-04-24T10:32:54-05:00", "file_type": ".pdf"} |
e99904a8-e132-4419-80a9-d0ae1149627f | [
0.01660439558327198,
0.019737403839826584,
0.006367460824549198,
-0.0703539028763771,
0.007050809450447559,
0.04048984497785568,
0.08869621902704239,
0.01779383420944214,
0.03886177018284798,
0.02602716162800789,
0.04659024253487587,
-0.07428532093763351,
0.009701606817543507,
-0.036379046... | accounting equation, Assets = Liabilities + Equity.
Impact 1
Impact 2
A.
B.
C.
D.
E.
Issued stock for cash
Purchased supplies on account
Paid employee salaries
Paid note payment to bank
Collected balance on accounts receivable
Table 3.17
PA7.
3.4 Indicate how changes in the following types of accounts would be recorded (Dr for debit; Cr for
Increase
Decrease
credit).
A.
B.
C.
D.
E.
Table 3.18
Asset accounts
Liability accounts
Common stock
Revenue
Expense
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 3 Analyzing and Recording Transactions
199
PA8.
3.4 Identify the normal balance (Dr for Debit; Cr for Credit) and type of account (A for asset, L for
liability, E for equity, E-rev for revenue, E-exp for expense, and E-eq for equity) for each of the following items.
Normal balance
Account type
A.
B.
C.
D.
E.
F.
Accounts Payable
Supplies
Inventory
Common Stock
Dividends
Salaries Expense
Table 3.19 | {"title": "Principles of Accounting, Volume 1: Financial Accounting", "file_size_mb": 156.7, "file_name": "FinancialAccounting-OP.pdf", "batch_upload": true, "creationdate": "2019-04-24T10:32:54-05:00", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "total_pages": 1055, "moddate": "2020-08-05T15:26:11-05:00", "uploaded_via": "batch_uploader", "file_type": ".pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "upload_timestamp": "2026-02-07T07:23:08.167529", "producer": "Prince 11 (www.princexml.com)", "creator": "DocBook XSL Stylesheets V1.79.1", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf"} |
d08021ef-b73c-47af-85c2-81f1b4df12b4 | [
-0.02187873050570488,
0.02929079532623291,
-0.011420782655477524,
-0.07997134327888489,
-0.03815627098083496,
0.042950380593538284,
0.06696029752492905,
0.016508284956216812,
0.015029032714664936,
0.03194338083267212,
0.06758691370487213,
-0.10945077240467072,
0.012145882472395897,
-0.0171... | Normal balance
Account type
A.
B.
C.
D.
E.
F.
Accounts Payable
Supplies
Inventory
Common Stock
Dividends
Salaries Expense
Table 3.19
PA9.
3.4 Indicate the net effect (+ for increase; – for decrease; 0 for no effect) of each of the following
transactions on each part of the accounting equation, Assets = Liabilities + Equity. For example, for payment of
an accounts payable balance, A (–) = L (–) + E (0).
A.
sale of merchandise to customer on account
B. payment on note payable
C. purchase of equipment for cash
D.
collection of accounts receivable
E. purchase of supplies on account
PA10.
3.4 Identify whether the following transactions would be recorded with a debit (Dr) or credit (Cr)
entry. Indicate the normal balance of the account.
Transaction
Debit or credit?
Normal balance
A.
B.
C.
D.
E.
F.
Equipment increase
Dividends Paid increase
Repairs Expense increase
Service revenue decrease
Miscellaneous Expense increase
Bonds Payable decrease | {"file_name": "FinancialAccounting-OP.pdf", "producer": "Prince 11 (www.princexml.com)", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "total_pages": 1055, "batch_upload": true, "creationdate": "2019-04-24T10:32:54-05:00", "uploaded_via": "batch_uploader", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "upload_timestamp": "2026-02-07T07:23:08.167529", "creator": "DocBook XSL Stylesheets V1.79.1", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_type": ".pdf", "moddate": "2020-08-05T15:26:11-05:00"} |
287d197b-b036-4971-9ab2-0db4e3fa5936 | [
-0.08862756192684174,
0.09285224229097366,
0.028135638684034348,
-0.08844222128391266,
-0.09579360485076904,
-0.01403605006635189,
-0.015183920040726662,
0.03494495898485184,
0.009176870808005333,
0.11606159806251526,
0.06478098779916763,
0.011694834567606449,
0.02771821804344654,
-0.02802... | Normal balance
A.
B.
C.
D.
E.
F.
Equipment increase
Dividends Paid increase
Repairs Expense increase
Service revenue decrease
Miscellaneous Expense increase
Bonds Payable decrease
Table 3.20
200
Chapter 3 Analyzing and Recording Transactions
PA11.
3.5 The following information is provided for the first month of operations for Legal Services Inc.:
A. The business was started by selling $100,000 worth of common stock.
B. Six months’ rent was paid in advance, $4,500.
C. Provided services in the amount of $1,000. The customer will pay at a later date.
D. An office worker was hired. The worker will be paid $275 per week.
E. Received $500 in payment from the customer in “C”.
F.
Purchased $250 worth of supplies on credit.
G. Received the electricity bill. We will pay the $110 in thirty days.
H. Paid the worker hired in “D” for one week’s work.
I.
J.
Received $100 from a customer for services we will provide next week. | {"uploaded_via": "batch_uploader", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_type": ".pdf", "creationdate": "2019-04-24T10:32:54-05:00", "file_size_mb": 156.7, "creator": "DocBook XSL Stylesheets V1.79.1", "moddate": "2020-08-05T15:26:11-05:00", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "total_pages": 1055, "producer": "Prince 11 (www.princexml.com)", "upload_timestamp": "2026-02-07T07:23:08.167529", "file_name": "FinancialAccounting-OP.pdf", "batch_upload": true} |
d173667c-ac88-4cd6-a2f8-fd4b313b2a02 | [
-0.07224563509225845,
0.08845081180334091,
0.03943191468715668,
-0.034547772258520126,
-0.060177166014909744,
-0.00196922873146832,
0.013243930414319038,
0.006382783409208059,
-0.00625607231631875,
0.11577527225017548,
0.06349679827690125,
-0.017466923221945763,
-0.005131634417921305,
-0.0... | H. Paid the worker hired in “D” for one week’s work.
I.
J.
Received $100 from a customer for services we will provide next week.
Dividends in the amount of $1,500 were distributed.
Prepare the necessary journal entries to record these transactions. If an entry is not required for any of these
transactions, state this and explain why.
PA12.
3.5 Sewn for You had the following transactions in its first week of business.
A.
Jessica Johansen started Sewn for You, a seamstress business, by contributing $20,000 and receiving
stock in exchange.
B. Paid $2,250 to cover the first three months’ rent.
C. Purchased $500 of sewing supplies. She paid cash for the purchase.
D. Purchased a sewing machine for $1,500 paying $200 cash and signing a note for the balance.
E.
Finished a job for a customer earning $180. The customer paid cash.
F. Received a $500 down payment to make a wedding dress.
G. Received an electric bill for $125 which is due to be paid in three weeks. | {"uploaded_via": "batch_uploader", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_type": ".pdf", "batch_upload": true, "producer": "Prince 11 (www.princexml.com)", "file_name": "FinancialAccounting-OP.pdf", "total_pages": 1055, "creationdate": "2019-04-24T10:32:54-05:00", "creator": "DocBook XSL Stylesheets V1.79.1", "upload_timestamp": "2026-02-07T07:23:08.167529", "moddate": "2020-08-05T15:26:11-05:00", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_size_mb": 156.7, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf"} |
ccad30b3-625a-456a-8c4c-e63b5d85cd5b | [
-0.08187328279018402,
0.08859875798225403,
0.050818558782339096,
-0.00836055725812912,
-0.023597901687026024,
-0.038873590528964996,
0.03488296642899513,
0.03327222168445587,
-0.015992850065231323,
0.06495502591133118,
0.0836082249879837,
-0.0008666658541187644,
-0.008007228374481201,
-0.0... | F. Received a $500 down payment to make a wedding dress.
G. Received an electric bill for $125 which is due to be paid in three weeks.
H. Completed an altering job for $45. The customer asked to be billed.
Prepare the necessary journal entries to record these transactions. If an entry is not required for any of these
transactions, state this and explain why.
PA13.
3.5 George Hoskin started his own business, Hoskin Hauling. The following transactions occurred in
the first two weeks:
A. George Hoskin contributed cash of $12,000 and a truck worth $10,000 to start the business. He
received Common Stock in return.
B. Paid two months' rent in advance, $800.
C. Agreed to do a hauling job for a price of $1,200.
D. Performed the hauling job discussed in “C.” We will get paid later.
E. Received payment of $600 on the hauling job done in “D.”
F.
Purchased gasoline on credit, $50.
G. Performed another hauling job. Earned $750, was paid cash. | {"creationdate": "2019-04-24T10:32:54-05:00", "batch_upload": true, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_type": ".pdf", "file_name": "FinancialAccounting-OP.pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "producer": "Prince 11 (www.princexml.com)", "file_size_mb": 156.7, "uploaded_via": "batch_uploader", "upload_timestamp": "2026-02-07T07:23:08.167529", "creator": "DocBook XSL Stylesheets V1.79.1", "total_pages": 1055, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00"} |
da992965-80b0-4c4f-9bec-9bb611b8938d | [
-0.07356932759284973,
0.07164221256971359,
-0.020704757422208786,
-0.024755410850048065,
-0.04283452406525612,
-0.01995156519114971,
0.07046109437942505,
0.062377721071243286,
-0.009391223080456257,
0.047307442873716354,
0.04138154163956642,
-0.03292330354452133,
0.016942689195275307,
-0.0... | E. Received payment of $600 on the hauling job done in “D.”
F.
Purchased gasoline on credit, $50.
G. Performed another hauling job. Earned $750, was paid cash.
Record the following transactions in T-accounts. Label each entry with the appropriate letter. Total the T-
accounts when you are done.
PA14.
3.5 Prepare journal entries to record the following transactions. Create a T-account for Cash, post any
entries that affect the account, and calculate the ending balance for the account. Assume a Cash beginning
balance of $16,333.
A.
February 2, issued stock to shareholders, for cash, $25,000
B. March 10, paid cash to purchase equipment, $16,000
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 3 Analyzing and Recording Transactions
201
PA15.
3.5 Prepare journal entries to record the following transactions. Create a T-account for Accounts | {"file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "creationdate": "2019-04-24T10:32:54-05:00", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "batch_upload": true, "producer": "Prince 11 (www.princexml.com)", "total_pages": 1055, "file_size_mb": 156.7, "title": "Principles of Accounting, Volume 1: Financial Accounting", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader", "file_name": "FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "moddate": "2020-08-05T15:26:11-05:00", "file_type": ".pdf", "upload_timestamp": "2026-02-07T07:23:08.167529"} |
7ed08aaf-0f96-4cae-893f-46cf25cc89f8 | [
-0.02799054980278015,
0.043479979038238525,
-0.051944486796855927,
-0.03537256270647049,
-0.09045546501874924,
-0.02483740635216236,
-0.0169146079570055,
0.027878882363438606,
-0.018531134352087975,
0.09279089421033859,
0.054930660873651505,
-0.06956645101308823,
-0.0299480389803648,
-0.02... | 201
PA15.
3.5 Prepare journal entries to record the following transactions. Create a T-account for Accounts
Payable, post any entries that affect the account, and tally ending balance for the account. Assume an
Accounts Payable beginning balance of $5,000.
A.
February 2, purchased an asset, merchandise inventory, on account, $30,000
B. March 10, paid creditor for part of February purchase, $12,000
PA16.
3.5 Prepare journal entries to record the following transactions for the month of July:
A. on first day of the month, paid rent for current month, $2,000
B. on tenth day of month, paid prior month balance due on accounts, $3,100
C. on twelfth day of month, collected cash for services provided, $5,500
D. on twenty-first day of month, paid salaries to employees, $3,600
E. on thirty-first day of month, paid for dividends to shareholders, $800
PA17.
3.5 Prepare journal entries to record the following transactions for the month of November: | {"batch_upload": true, "creationdate": "2019-04-24T10:32:54-05:00", "moddate": "2020-08-05T15:26:11-05:00", "total_pages": 1055, "file_type": ".pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "uploaded_via": "batch_uploader", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "creator": "DocBook XSL Stylesheets V1.79.1", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "producer": "Prince 11 (www.princexml.com)", "file_name": "FinancialAccounting-OP.pdf"} |
7cdf9094-3c27-47f6-b2fb-7b3c3f4fa67c | [
-0.03162224218249321,
0.016744771972298622,
-0.0285374503582716,
-0.06693880259990692,
-0.11710265278816223,
-0.023788517341017723,
0.07172053307294846,
0.03277771547436714,
0.007831512950360775,
0.08647778630256653,
0.09213053435087204,
-0.0727480873465538,
-0.01836555264890194,
-0.056321... | E. on thirty-first day of month, paid for dividends to shareholders, $800
PA17.
3.5 Prepare journal entries to record the following transactions for the month of November:
A. on first day of the month, issued common stock for cash, $20,000
B. on third day of month, purchased equipment for cash, $10,500
C. on tenth day of month, received cash for accounting services, $14,250
D. on fifteenth day of month, paid miscellaneous expenses, $3,200
E. on last day of month, paid employee salaries, $8,600
PA18.
3.5 Post the following July transactions to T-accounts for Accounts Receivable, Sales Revenue, and
Cash, indicating the ending balance. Assume no beginning balances in these accounts.
A. on first day of the month, sold products to customers for cash, $13,660
B. on fifth day of month, sold products to customers on account, $22,100
C. on tenth day of month, collected cash from customer accounts, $18,500
PA19. | {"source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "producer": "Prince 11 (www.princexml.com)", "upload_timestamp": "2026-02-07T07:23:08.167529", "file_size_mb": 156.7, "moddate": "2020-08-05T15:26:11-05:00", "file_type": ".pdf", "file_name": "FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader", "batch_upload": true, "creationdate": "2019-04-24T10:32:54-05:00", "creator": "DocBook XSL Stylesheets V1.79.1", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "total_pages": 1055, "title": "Principles of Accounting, Volume 1: Financial Accounting"} |
ee41ac02-a0cc-4b0e-9abb-b51b95fcba61 | [
-0.04583388939499855,
0.09107118099927902,
0.00851256214082241,
-0.07373975217342377,
-0.10211312770843506,
0.010508847422897816,
0.04174582287669182,
0.03576196730136871,
-0.029017414897680283,
0.059504248201847076,
0.11033269017934799,
-0.01956196129322052,
0.030642900615930557,
-0.07104... | B. on fifth day of month, sold products to customers on account, $22,100
C. on tenth day of month, collected cash from customer accounts, $18,500
PA19.
3.5 Post the following November transactions to T-accounts for Accounts Payable, Inventory, and
Cash, indicating the ending balance. Assume no beginning balances in Accounts Payable and Inventory, and a
beginning Cash balance of $36,500.
A. purchased merchandise inventory on account, $16,000
B. paid vendors for part of inventory purchased earlier in month, $12,000
C. purchased merchandise inventory for cash, $10,500
PA20.
3.6 Prepare an unadjusted trial balance, in correct format, from the following alphabetized account
information. Assume accounts have normal balances.
202
Chapter 3 Analyzing and Recording Transactions
PA21.
3.6 Prepare an unadjusted trial balance, in correct format, from the following alphabetized account
information. Assume all the accounts have normal balances. | {"file_type": ".pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "total_pages": 1055, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "batch_upload": true, "creationdate": "2019-04-24T10:32:54-05:00", "file_size_mb": 156.7, "moddate": "2020-08-05T15:26:11-05:00", "creator": "DocBook XSL Stylesheets V1.79.1", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "uploaded_via": "batch_uploader", "file_name": "FinancialAccounting-OP.pdf", "producer": "Prince 11 (www.princexml.com)"} |
2b664565-6102-4462-be35-35caf4b00b2f | [
-0.030754733830690384,
0.06349701434373856,
-0.033206187188625336,
-0.04921487718820572,
-0.030403409153223038,
0.07597019523382187,
0.04712289944291115,
-0.017845889553427696,
0.019305571913719177,
-0.015938136726617813,
0.07844901829957962,
-0.03890829160809517,
0.030827615410089493,
-0.... | PA21.
3.6 Prepare an unadjusted trial balance, in correct format, from the following alphabetized account
information. Assume all the accounts have normal balances.
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 3 Analyzing and Recording Transactions
203
B Problem Set B
PB1.
3.2 Assuming the following account balances, what is the missing value?
PB2.
3.2
3.4 Assuming the following account balance changes for the period, what is the missing value?
PB3.
3.2
3.4 Assuming the following account balance changes for the period, what is the missing value?
PB4.
3.2
3.4 Identify the financial statement on which each of the following account categories would
appear: the balance sheet (BS), the income statement (IS), or the retained earnings statement (RE).
Financial statement
Normal balance
Accounts Receivable
Automobile Expense
Cash
Equipment
Notes Payable
Service Revenue
Table 3.21
204 | {"total_pages": 1055, "file_type": ".pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "creator": "DocBook XSL Stylesheets V1.79.1", "uploaded_via": "batch_uploader", "batch_upload": true, "upload_timestamp": "2026-02-07T07:23:08.167529", "file_name": "FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "producer": "Prince 11 (www.princexml.com)", "moddate": "2020-08-05T15:26:11-05:00", "creationdate": "2019-04-24T10:32:54-05:00"} |
3f8e0df3-dc2e-4b86-8b2b-c47c178a176c | [
-0.021054523065686226,
0.004884831141680479,
0.007041696924716234,
-0.10964924842119217,
-0.009982630610466003,
0.058697715401649475,
0.11019349098205566,
0.03625912591814995,
0.029612813144922256,
0.023240160197019577,
0.038333017379045486,
-0.056643228977918625,
0.035511139780282974,
-0.... | Financial statement
Normal balance
Accounts Receivable
Automobile Expense
Cash
Equipment
Notes Payable
Service Revenue
Table 3.21
204
Chapter 3 Analyzing and Recording Transactions
PB5.
3.4 Indicate what impact (+ for increase; – for decrease) the following transactions would have on the
accounting equation, Assets = Liabilities + Equity.
Transaction
Impact 1
Impact 2
A.
B.
C.
D.
E.
Paid balance due for accounts payable
Charged clients for legal services provided
Purchased supplies on account
Collected legal service fees from clients for current month
Issued stock in exchange for a note receivable
Table 3.22
PB6.
3.4 Indicate how changes in these types of accounts would be recorded (Dr for debit; Cr for credit).
Debit or credit?
Asset accounts
Liability accounts
Common Stock
Revenue
Expense
A.
B.
C.
D.
E.
Table 3.23
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 3 Analyzing and Recording Transactions | {"creationdate": "2019-04-24T10:32:54-05:00", "creator": "DocBook XSL Stylesheets V1.79.1", "batch_upload": true, "file_name": "FinancialAccounting-OP.pdf", "producer": "Prince 11 (www.princexml.com)", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_size_mb": 156.7, "title": "Principles of Accounting, Volume 1: Financial Accounting", "uploaded_via": "batch_uploader", "moddate": "2020-08-05T15:26:11-05:00", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "file_type": ".pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "total_pages": 1055} |
ace04987-5754-4a64-adf4-4c5091fcf259 | [
0.010124784894287586,
0.014444701373577118,
0.022342834621667862,
-0.0819801464676857,
0.01721108891069889,
0.04032822698354721,
0.11852414906024933,
0.02703295648097992,
0.06348023563623428,
0.04954122379422188,
0.04306874796748161,
-0.033366620540618896,
0.014301507733762264,
-0.03913364... | Common Stock
Revenue
Expense
A.
B.
C.
D.
E.
Table 3.23
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 3 Analyzing and Recording Transactions
205
PB7.
3.4 Identify the normal balance (Dr for Debit; Cr for Credit) and type of account (A for asset, L for
liability, E for equity, E-rev for revenue, E-exp for expense, and E-eq for equity) for each of the following
accounts.
Normal balance
Account type
A.
B.
C.
D.
E.
F.
Utility Expense
Accounts Receivable
Interest Revenue
Retained Earnings
Land
Sales Revenue
Table 3.24
PB8.
3.4 Indicate the net effect (+ for increase; – for decrease; 0 for no effect) of each of the following
transactions on each part of the accounting equation, Assets = Liabilities + Equity. For example, for payment of
an accounts payable balance, A (–) = L (–) + E (0).
A. Payment of principal balance of note payable
B. Purchase of supplies for cash
C. Payment of dividends to stockholders
D. | {"file_type": ".pdf", "uploaded_via": "batch_uploader", "producer": "Prince 11 (www.princexml.com)", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "file_name": "FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00", "creator": "DocBook XSL Stylesheets V1.79.1", "title": "Principles of Accounting, Volume 1: Financial Accounting", "total_pages": 1055, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "batch_upload": true, "creationdate": "2019-04-24T10:32:54-05:00", "upload_timestamp": "2026-02-07T07:23:08.167529"} |
3da0f479-3365-4e69-9d8a-e41d74de4c18 | [
-0.05574153736233711,
0.07096938788890839,
-0.03138173371553421,
-0.07254677265882492,
-0.08984998613595963,
-0.007522230036556721,
0.08782060444355011,
0.061507854610681534,
0.005831518210470676,
0.07079801708459854,
0.029220426455140114,
-0.05474492907524109,
0.0016355948755517602,
-0.01... | an accounts payable balance, A (–) = L (–) + E (0).
A. Payment of principal balance of note payable
B. Purchase of supplies for cash
C. Payment of dividends to stockholders
D.
Issuance of stock for cash
E. Billing customer for physician services provided
PB9.
3.5 Prepare journal entries to record the following transactions. Create a T-account for Cash, post any
entries that affect the account, and calculate the ending balance for the account. Assume a Cash beginning
balance of $37,400.
A. May 12, collected balance due from customers on account, $16,000
B.
June 10, purchased supplies for cash, $4,444
PB10.
3.5 Prepare journal entries to record the following transactions. Create a T-account for Accounts
Payable, post any entries that affect the account, and calculate the ending balance for the account. Assume an
Accounts Payable beginning balance of $7,500.
A. May 12, purchased merchandise inventory on account. $9,200
B. | {"total_pages": 1055, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "creator": "DocBook XSL Stylesheets V1.79.1", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader", "file_name": "FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "batch_upload": true, "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_size_mb": 156.7, "file_type": ".pdf", "creationdate": "2019-04-24T10:32:54-05:00", "producer": "Prince 11 (www.princexml.com)"} |
03f119fe-c5c1-466a-ab8b-ba451d6e53b0 | [
-0.02553003467619419,
0.04065004736185074,
-0.02965761162340641,
-0.05404876917600632,
-0.08742889761924744,
0.009476382285356522,
0.030307428911328316,
0.022640220820903778,
-0.01937136985361576,
0.04704615846276283,
0.038292039185762405,
-0.054231490939855576,
-0.04481520876288414,
-0.06... | Accounts Payable beginning balance of $7,500.
A. May 12, purchased merchandise inventory on account. $9,200
B.
June 10, paid creditor for part of previous month’s purchase, $11,350
PB11.
3.5 Prepare journal entries to record the following transactions that occurred in April:
A. on first day of the month, issued common stock for cash, $15,000
B. on eighth day of month, purchased supplies, on account, $1,800
C. on twentieth day of month, billed customer for services provided, $950
D. on twenty-fifth day of month, paid salaries to employees, $2,000
E. on thirtieth day of month, paid for dividends to shareholders, $500
206
Chapter 3 Analyzing and Recording Transactions
PB12.
3.5 Prepare journal entries to record the following transactions that occurred in March:
A. on first day of the month, purchased building for cash, $75,000
B. on fourth day of month, purchased inventory, on account, $6,875
C. on eleventh day of month, billed customer for services provided, $8,390 | {"file_type": ".pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "moddate": "2020-08-05T15:26:11-05:00", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "creator": "DocBook XSL Stylesheets V1.79.1", "producer": "Prince 11 (www.princexml.com)", "batch_upload": true, "upload_timestamp": "2026-02-07T07:23:08.167529", "creationdate": "2019-04-24T10:32:54-05:00", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "file_name": "FinancialAccounting-OP.pdf", "total_pages": 1055, "uploaded_via": "batch_uploader", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf"} |
93de1f04-be98-4c6d-ab8a-f0a1ff7c876b | [
-0.006604486145079136,
0.04025375097990036,
-0.011508236639201641,
-0.06528720259666443,
-0.08305012434720993,
0.0019157759379595518,
0.05259689316153526,
0.026755617931485176,
0.01525421068072319,
0.05961199104785919,
0.09666792303323746,
-0.06939920783042908,
0.03163490071892738,
-0.0574... | B. on fourth day of month, purchased inventory, on account, $6,875
C. on eleventh day of month, billed customer for services provided, $8,390
D. on nineteenth day of month, paid current month utility bill, $2,000
E. on last day of month, paid suppliers for previous purchases, $2,850
PB13.
3.5 Post the following November transactions to T-accounts for Accounts Payable, Inventory, and
Cash, indicating the ending balance. Assume no beginning balances in Accounts Payable and Inventory, and a
beginning Cash balance of $21,220.
A. purchased merchandise inventory on account, $9,900
B. paid vendors for part of inventory purchased earlier in month, $6,500
C. purchased merchandise inventory for cash, $4,750
PB14.
3.5 Post the following July transactions to T-accounts for Accounts Receivable, Sales Revenue, and
Cash, indicating the ending balance. Assume no beginning balances in these accounts.
A.
B.
C.
sold products to customers for cash, $7,500 | {"file_size_mb": 156.7, "file_type": ".pdf", "uploaded_via": "batch_uploader", "creationdate": "2019-04-24T10:32:54-05:00", "title": "Principles of Accounting, Volume 1: Financial Accounting", "producer": "Prince 11 (www.princexml.com)", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "total_pages": 1055, "batch_upload": true, "upload_timestamp": "2026-02-07T07:23:08.167529", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_name": "FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00"} |
e2691eca-5765-4855-a693-8bd5971320ab | [
-0.018850214779376984,
0.06724376976490021,
-0.03307672590017319,
-0.07717577368021011,
-0.08944371342658997,
0.01583622582256794,
0.032253216952085495,
0.015133760869503021,
-0.02926122397184372,
0.018096832558512688,
0.048862818628549576,
0.028048669919371605,
0.04269818589091301,
-0.076... | Cash, indicating the ending balance. Assume no beginning balances in these accounts.
A.
B.
C.
sold products to customers for cash, $7,500
sold products to customers on account, $12,650
collected cash from customer accounts, $9,500
PB15.
3.6 Prepare an unadjusted trial balance, in correct format, from the following alphabetized account
information. Assume all accounts have normal balances.
PB16.
3.6 Prepare an unadjusted trial balance, in correct format, from the following alphabetized account
information. Assume all accounts have normal balances.
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 3 Analyzing and Recording Transactions
207
PB17.
3.6 Prepare an unadjusted trial balance, in correct format, from the following alphabetized account
information. Assume all accounts have normal balances.
PB18.
3.6 Prepare an unadjusted trial balance, in correct format, from the following alphabetized account | {"file_type": ".pdf", "moddate": "2020-08-05T15:26:11-05:00", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_name": "FinancialAccounting-OP.pdf", "total_pages": 1055, "producer": "Prince 11 (www.princexml.com)", "file_size_mb": 156.7, "creator": "DocBook XSL Stylesheets V1.79.1", "title": "Principles of Accounting, Volume 1: Financial Accounting", "batch_upload": true, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader", "upload_timestamp": "2026-02-07T07:23:08.167529"} |
464087c9-8e90-4c59-8045-891a028bc5e7 | [
-0.034471891820430756,
0.06902950257062912,
-0.027833405882120132,
-0.08618994057178497,
-0.08064980059862137,
0.02212262712419033,
0.034022487699985504,
0.01840713806450367,
0.04128056764602661,
0.04750603809952736,
0.0026467859279364347,
0.0160902701318264,
-0.013437207788228989,
-0.0235... | information. Assume all accounts have normal balances.
PB18.
3.6 Prepare an unadjusted trial balance, in correct format, from the following alphabetized account
information. Assume all accounts have normal balances.
Thought Provokers
TP1.
3.1 Is it possible to be too conservative? Explain your answer.
TP2.
3.1 Why is it important to learn all of this terminology when accounting is a quantitative subject?
TP3.
3.2 Assume that you are the controller of a business that provides legal services to clients. Suppose
that the company has had a tough year, so the revenues have been lagging behind, based on previous years’
standards. What would you do if your boss (the chief executive officer [CEO] of the company) asked to
reclassify a transaction to report loan proceeds of $150,000 as if the cash came from service fee revenue from
clients instead. Would following the CEO’s advice impact the company’s accounting equation? How would | {"moddate": "2020-08-05T15:26:11-05:00", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "title": "Principles of Accounting, Volume 1: Financial Accounting", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "total_pages": 1055, "file_type": ".pdf", "file_size_mb": 156.7, "uploaded_via": "batch_uploader", "batch_upload": true, "creator": "DocBook XSL Stylesheets V1.79.1", "producer": "Prince 11 (www.princexml.com)", "upload_timestamp": "2026-02-07T07:23:08.167529", "creationdate": "2019-04-24T10:32:54-05:00", "file_name": "FinancialAccounting-OP.pdf"} |
59f1536e-dd7c-4d70-8ec2-6c083c8d5755 | [
-0.04557346552610397,
0.06423843652009964,
-0.0002980202261824161,
-0.04554266482591629,
-0.04334205761551857,
0.04724383354187012,
0.11238595843315125,
0.024339698255062103,
0.005741147790104151,
-0.028740376234054565,
-0.01278118509799242,
0.025590049102902412,
-0.039424214512109756,
-0.... | clients instead. Would following the CEO’s advice impact the company’s accounting equation? How would
reclassifying this one transaction change the outcome of the balance sheet, the income statement, and the
statement of retained earnings? Would making this reclassification change the perception that users of the
financial statements would have of the company’s current year success and future year potential?
Write a memo, detailing your willingness (or not) to embrace this suggestion, giving reasons behind your
decision. Remember to exercise diplomacy, even if you must dissent from the opinion of a supervisor. Note
that the challenge of the assignment is to keep your integrity intact, while also keeping your job, if possible.
208
Chapter 3 Analyzing and Recording Transactions
TP4.
3.2 Visit the website of the US Securities and Exchange Commission (SEC) (https://www.sec.gov/ | {"uploaded_via": "batch_uploader", "title": "Principles of Accounting, Volume 1: Financial Accounting", "producer": "Prince 11 (www.princexml.com)", "total_pages": 1055, "moddate": "2020-08-05T15:26:11-05:00", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "creator": "DocBook XSL Stylesheets V1.79.1", "file_type": ".pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "file_name": "FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "creationdate": "2019-04-24T10:32:54-05:00", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "batch_upload": true, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf"} |
554b1e57-0a56-4f72-a888-885ae7d74441 | [
-0.06694430112838745,
0.09405461698770523,
-0.0553835928440094,
-0.06871107965707779,
-0.03867693990468979,
0.012012592516839504,
0.019664021208882332,
0.045444559305906296,
0.04665132984519005,
0.008826375007629395,
0.05252839997410774,
-0.011601992882788181,
-0.06300345808267593,
-0.0493... | Chapter 3 Analyzing and Recording Transactions
TP4.
3.2 Visit the website of the US Securities and Exchange Commission (SEC) (https://www.sec.gov/
edgar/searchedgar/companysearch.html). Search for the latest Form 10-K for a company you would like to
analyze. Submit a short memo that
A.
Includes the name and ticker symbol of the company you have chosen.
B. Reviews the company’s end-of-period Balance Sheet to determine the following:
i.
ii.
total assets
total liabilities
iii.
total equity
C. Presents the company’s accounting equation at the end of the period, from the information you
collected in (A), (B), and (C):
i. provide the web link to the company’s Form 10-K to allow accurate verification of your answers
TP5.
3.3 Is the order in which we place information in the journal and ledger important?
TP6.
3.4 Visit the website of the SEC (https://www.sec.gov/edgar/searchedgar/companysearch.html). | {"file_name": "FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00", "file_size_mb": 156.7, "uploaded_via": "batch_uploader", "total_pages": 1055, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "creationdate": "2019-04-24T10:32:54-05:00", "creator": "DocBook XSL Stylesheets V1.79.1", "file_type": ".pdf", "producer": "Prince 11 (www.princexml.com)", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "batch_upload": true, "title": "Principles of Accounting, Volume 1: Financial Accounting"} |
68d283ae-c5db-49cb-83b1-c54ba7c09a3a | [
-0.06330027431249619,
0.043914008885622025,
-0.011653878726065159,
-0.09794539213180542,
-0.006384621374309063,
-0.015509265474975109,
-0.052908070385456085,
0.02941000461578369,
0.04753091558814049,
0.03625403717160225,
0.0251617394387722,
-0.01406777836382389,
-0.07679589092731476,
-0.04... | TP5.
3.3 Is the order in which we place information in the journal and ledger important?
TP6.
3.4 Visit the website of the SEC (https://www.sec.gov/edgar/searchedgar/companysearch.html).
Search for the latest Form 10-K for a company you would like to analyze. Submit a short memo that
A.
Includes the name and ticker symbol of the company you have chosen
B. Reviews the company’s comparative Balance Sheet to gather the following information:
i. Compare beginning and ending Assets totals, noting amount of change for the most recent
period
ii. Compare beginning and ending Liabilities totals, noting amount of change for the most recent
period
iii. Compare beginning and ending Equity totals, noting amount of change for the most recent
period
C.
State the changes identified in (A), (B), and (C) in accounting equation format. If the “change” equation
does not balance, explain why not. Hint: Double-check your calculations, and if the accounting | {"total_pages": 1055, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "batch_upload": true, "creationdate": "2019-04-24T10:32:54-05:00", "file_type": ".pdf", "file_name": "FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "upload_timestamp": "2026-02-07T07:23:08.167529", "moddate": "2020-08-05T15:26:11-05:00", "title": "Principles of Accounting, Volume 1: Financial Accounting", "uploaded_via": "batch_uploader", "producer": "Prince 11 (www.princexml.com)", "creator": "DocBook XSL Stylesheets V1.79.1", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf"} |
17d33597-a0ec-4232-aec6-681253f97f07 | [
-0.08354146778583527,
0.03222145885229111,
-0.016258805990219116,
-0.05187610164284706,
-0.05357857793569565,
0.031673360615968704,
-0.012279295362532139,
0.04981742054224014,
0.03971613943576813,
-0.03342137485742569,
0.015892699360847473,
-0.036262087523937225,
-0.032744400203228,
-0.031... | does not balance, explain why not. Hint: Double-check your calculations, and if the accounting
equation change still does not balance, search for notes in the company’s files about prior period
adjustments, which will often explain why balances may differ.
i. Provide the web link to the company’s Form 10-K to allow accurate verification of your answers.
TP7.
3.5 Visit the website of the US Securities and Exchange Commission (SEC) (https://www.sec.gov/
edgar/searchedgar/companysearch.html). Search for the latest Form 10-K for a company you would like to.
When you are choosing, make sure the company sells a product (has inventory on the Balance Sheet, and Cost
of Goods Sold on the Income Statement). Submit a short memo:
A.
B.
Include the name and ticker symbol of the company you have chosen.
Follow the financial statement progression from the Income Statement to the Retained Earnings | {"file_name": "FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "title": "Principles of Accounting, Volume 1: Financial Accounting", "creationdate": "2019-04-24T10:32:54-05:00", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "producer": "Prince 11 (www.princexml.com)", "moddate": "2020-08-05T15:26:11-05:00", "file_size_mb": 156.7, "batch_upload": true, "uploaded_via": "batch_uploader", "file_type": ".pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "total_pages": 1055, "upload_timestamp": "2026-02-07T07:23:08.167529"} |
4738b7f9-3190-4243-bf72-2942e10b8102 | [
-0.00011155423271702603,
0.08715856820344925,
-0.020328368991613388,
-0.021382205188274384,
0.03156470134854317,
0.07703583687543869,
0.07715722918510437,
0.03801713138818741,
0.07162415236234665,
-0.0013803468318656087,
0.040939170867204666,
-0.012632534839212894,
-0.022496124729514122,
-... | A.
B.
Include the name and ticker symbol of the company you have chosen.
Follow the financial statement progression from the Income Statement to the Retained Earnings
Statement to the Balance Sheet. Find the net income amount from the Income Statement and identify
where it appears on the Statement of Retained Earnings (or the Statement of Stockholders’ Equity).
C. On the statement found for instruction (A), find the ending retained earnings balance, and identify
where it appears on the Balance Sheet for year-end.
D. Provide the web link to the company’s Form 10-K to allow accurate verification of your answers.
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 3 Analyzing and Recording Transactions
209
TP8.
3.6 Analyze Trusty Company’s trial balance and the additional information provided to determine the
following:
A. what is causing the trial balance to be out of balance | {"title": "Principles of Accounting, Volume 1: Financial Accounting", "batch_upload": true, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_size_mb": 156.7, "total_pages": 1055, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader", "creationdate": "2019-04-24T10:32:54-05:00", "moddate": "2020-08-05T15:26:11-05:00", "creator": "DocBook XSL Stylesheets V1.79.1", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_name": "FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "file_type": ".pdf", "producer": "Prince 11 (www.princexml.com)"} |
5ca60afb-f2d5-41e7-833c-3f1be37bc3a6 | [
-0.027919866144657135,
0.09298129379749298,
-0.010847113095223904,
-0.04420601576566696,
-0.011175635270774364,
-0.028984704986214638,
0.008739413693547249,
0.02069944329559803,
0.04082893207669258,
0.04142698273062706,
0.04719920456409454,
-0.022467346861958504,
0.023707417771220207,
-0.0... | 209
TP8.
3.6 Analyze Trusty Company’s trial balance and the additional information provided to determine the
following:
A. what is causing the trial balance to be out of balance
B. any other errors that require corrections that are identified during your analysis
C.
the effect (if any) that correcting the errors will have on the accounting equation
A review of transactions revealed the following facts:
• A service fee of $18,000 was earned (but not yet collected) by the end of the period but was accidentally
not recorded as revenue at that time.
• A transposition error occurred when transferring the account balances from the ledger to the trial
balance. Salaries expense should have been listed on the trial balance as $64,500 but was inadvertently
recorded as $46,500.
• Two machines that cost $9,000 each were purchased on account but were not recorded in company
accounting records.
210
Chapter 3 Analyzing and Recording Transactions | {"file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_name": "FinancialAccounting-OP.pdf", "batch_upload": true, "uploaded_via": "batch_uploader", "producer": "Prince 11 (www.princexml.com)", "creationdate": "2019-04-24T10:32:54-05:00", "creator": "DocBook XSL Stylesheets V1.79.1", "file_size_mb": 156.7, "total_pages": 1055, "title": "Principles of Accounting, Volume 1: Financial Accounting", "upload_timestamp": "2026-02-07T07:23:08.167529", "moddate": "2020-08-05T15:26:11-05:00", "file_type": ".pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf"} |
a0ff1532-da03-405f-b588-489f89bc89d3 | [
0.007243641652166843,
0.05830269679427147,
0.042422156780958176,
-0.024157395586371422,
-0.029824789613485336,
-0.014432371594011784,
-0.012292577885091305,
0.037004414945840836,
-0.0072798398323357105,
0.022281063720583916,
0.00440742215141654,
-0.01254289597272873,
0.028857022523880005,
... | recorded as $46,500.
• Two machines that cost $9,000 each were purchased on account but were not recorded in company
accounting records.
210
Chapter 3 Analyzing and Recording Transactions
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
4
The Adjustment Process
Figure 4.1 Mark’s Dry-Cleaning Business. (credit: modification of “Dry Cleaning” by Donald West/Flickr, CC BY
2.0)
Chapter Outline
4.1 Explain the Concepts and Guidelines Affecting Adjusting Entries
4.2 Discuss the Adjustment Process and Illustrate Common Types of Adjusting Entries
4.3 Record and Post the Common Types of Adjusting Entries
4.4 Use the Ledger Balances to Prepare an Adjusted Trial Balance
4.5 Prepare Financial Statements Using the Adjusted Trial Balance
Why It Matters
As we learned in Analyzing and Recording Transactions, upon finishing college Mark Summers wanted to start | {"uploaded_via": "batch_uploader", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00", "batch_upload": true, "title": "Principles of Accounting, Volume 1: Financial Accounting", "producer": "Prince 11 (www.princexml.com)", "upload_timestamp": "2026-02-07T07:23:08.167529", "file_name": "FinancialAccounting-OP.pdf", "total_pages": 1055, "file_type": ".pdf", "file_size_mb": 156.7, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "creationdate": "2019-04-24T10:32:54-05:00"} |
df78b4c8-cf4f-424d-8967-76400d56b4da | [
-0.029284991323947906,
0.08832299709320068,
0.06431104242801666,
-0.029842620715498924,
0.02699962630867958,
0.013611472211778164,
0.019906261935830116,
0.02414673939347267,
-0.03696342930197716,
0.02693597413599491,
0.06870723515748978,
0.03664793446660042,
-0.0056704990565776825,
-0.0449... | 4.5 Prepare Financial Statements Using the Adjusted Trial Balance
Why It Matters
As we learned in Analyzing and Recording Transactions, upon finishing college Mark Summers wanted to start
his own dry-cleaning business called Supreme Cleaners. After four years, Mark finished college and opened
Supreme Cleaners. During his first month of operations, Mark purchased dry-cleaning equipment and
supplies. He also hired an employee, opened a savings account, and provided services to his first customers,
among other things.
Mark kept thorough records of all of the daily business transactions for the month. At the end of the month,
Mark reviewed his trial balance and realized that some of the information was not up to date. His equipment
and supplies had been used, making them less valuable. He had not yet paid his employee for work
completed. His business savings account earned interest. Some of his customers had paid in advance for their | {"uploaded_via": "batch_uploader", "creationdate": "2019-04-24T10:32:54-05:00", "file_name": "FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "creator": "DocBook XSL Stylesheets V1.79.1", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "total_pages": 1055, "moddate": "2020-08-05T15:26:11-05:00", "producer": "Prince 11 (www.princexml.com)", "batch_upload": true, "file_type": ".pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_size_mb": 156.7, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf"} |
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