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Payment of a dividend increases both cash and stockholders' equity of the distributing business.

A) True
B) False

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A debit is a negative entry.

A) True
B) False

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Several terms which represent components of a bookkeeping system are listed below.For each term,write a brief explanation of how that component is used in a bookkeeping system.Space is provided for your answer immediately below each term. Several terms which represent components of a bookkeeping system are listed below.For each term,write a brief explanation of how that component is used in a bookkeeping system.Space is provided for your answer immediately below each term.

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Brief explanations o...

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Land is purchased on credit.For this transaction,identify the effect on the accounting equation.


A) Assets increase and liabilities increase.
B) Assets increase and owners' equity increases.
C) Liabilities increase and owners' equity decreases.
D) Liabilities decrease and assets decrease.

E) A) and B)
F) B) and D)

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Morton & Associates Use the following five transactions for Morton & Associates,Inc.to answer the question(s) . Morton & Associates Use the following five transactions for Morton & Associates,Inc.to answer the question(s) .   See the transactions to Morton & Associates. The journal entry to record the May 9 transaction will include a credit of $1,220 to A) Furniture and Supplies B) Cash C) Accounts Payable D) Administrative Expenses See the transactions to Morton & Associates. The journal entry to record the May 9 transaction will include a credit of $1,220 to


A) Furniture and Supplies
B) Cash
C) Accounts Payable
D) Administrative Expenses

E) B) and C)
F) None of the above

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Services are provided for customers who pay for the services immediately.For this transaction,identify the effect on the accounting equation.


A) Assets increase and liabilities increase.
B) Assets increase and stockholders' equity increases.
C) Liabilities increase and stockholders' equity decreases.
D) Liabilities decrease and assets decrease.

E) A) and C)
F) None of the above

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A bill is received for electric service;the charge for the electricity is recorded,but payment will be made later.For this transaction,identify the effect on the accounting equation.


A) Assets increase and liabilities increase.
B) Assets increase and stockholders' equity increases.
C) Liabilities increase and stockholders' equity decreases.
D) Liabilities decrease and assets decrease.

E) A) and B)
F) None of the above

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Which of the following statements is true?


A) An entry in a general ledger account can be traced to the trial balance by referring to the page listed in the posting reference column of that ledger account.
B) The posting of an amount recorded in the general journal can be verified by referring to the account number listed in the posting reference column on that line in the general journal.
C) Business transactions are recorded first in the general ledger;then that information is transferred to the general journal.
D) No explanation is needed for each entry in the general journal.

E) B) and C)
F) A) and D)

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Under the double-entry system of accounting,every transaction is entered in at least two accounts on opposite sides of T accounts.

A) True
B) False

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The normal balance of revenue is a(n)____________________.

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Squidly Products sold and delivered modems to Detail Solutions for $6,600 to be paid by Detail Solutions in three equal installments over the next three months.The journal entry made by Squidly to record this transaction will include:


A) A credit to Cash for $6,600.
B) A debit to Accounts Receivable for $6,600.
C) A debit to Accounts Receivable for $2,200.
D) A debit to Sales Revenue for $6,600.

E) B) and C)
F) A) and B)

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The record used to accumulate monetary information for each individual asset,liability,stockholders' equity,revenue,and expense item is a(an)


A) Account
B) General Journal
C) General Ledger
D) Chart of Accounts

E) C) and D)
F) A) and D)

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The correct term for the process of transferring amounts from a book of original entry to specific assets,liabilities,revenues,expenses,and stockholders' equity items is


A) Double-entry system
B) Posting
C) Credit
D) Journalizing

E) A) and C)
F) C) and D)

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The general journal is often used to record repetitive transactions.

A) True
B) False

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Which of the following accounts is increased by a debit entry?


A) Common Stock (Capital Stock)
B) Equipment
C) Unearned Subscription Revenue
D) Notes Payable

E) C) and D)
F) All of the above

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Under the cost principle,assets are always carried at their current market value.

A) True
B) False

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The ____________________ principle says that,with a few exceptions,assets are not carried at market values,but at their original cost.

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A trial balance is the listing of each account and its balance at a specific point in time.

A) True
B) False

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The normal balance of the Dividends account is a credit.

A) True
B) False

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An external event involves interaction between an entity and its environment.

A) True
B) False

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