Intermediate Accounting 7th Spiceland SOLUTIONS MANUAl and test bank

Intermediate Accounting, 7/e SOLUTIONS MANUAl and test bank  David Spiceland, University of Memphis

James F. Sepe, Santa Clara University
Mark W. Nelson, Cornell University

ISBN: 007802532x
Copyright year: 2013

Intermediate Accounting with Annual Report 7e David Spiceland James Sepe Mark Nelson  SM

http://www.mediafire.com/view/n7hesmqv76ihudh/ch3_final(2).doc

test bank ch2 Key
 

1.	Owners' equity can be expressed as assets minus liabilities.    TRUE

AACSB: Reflective Thinking AICPA BB: Critical Thinking Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-01 Analyze routine economic events-transactions-and record their effects on a companys financial position using the accounting equation format. Spiceland - Chapter 02 #1 Topic: Analyze Routine Economic Events Using the Accounting Equation

2.	Debits increase asset accounts and decrease liability accounts.    TRUE

AACSB: Reflective Thinking AICPA BB: Critical Thinking Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-02 Record transactions using the general journal format. Spiceland - Chapter 02 #2 Topic: Record Transactions Using the General Journal

3.	Balance sheet accounts are referred to as temporary accounts because their balances are always changing.    FALSE

AACSB: Reflective Thinking AICPA BB: Critical Thinking Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-02 Record transactions using the general journal format. Spiceland - Chapter 02 #3 Topic: Record Transactions Using the General Journal

4.	After an unadjusted trial balance is prepared, the next step in the accounting processing cycle is the preparation of financial statements.    FALSE

AACSB: Reflective Thinking AICPA BB: Critical Thinking Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-03 Post the effects of journal entries to general ledger accounts and prepare an unadjusted trial balance. Spiceland - Chapter 02 #4 Topic: Post and Prepare an Unadjusted Trial Balance

5.	Adjusting journal entries are required to comply with the realization and matching principles.    TRUE

AACSB: Reflective Thinking AICPA BB: Critical Thinking Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-04 Identify and describe the different types of adjusting journal entries. Spiceland - Chapter 02 #5 Topic: Identify and Describe Adjusting Entries

6.	Accruals occur when the cash flow precedes either revenue or expense recognition.    FALSE

AACSB: Reflective Thinking AICPA BB: Critical Thinking Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-04 Identify and describe the different types of adjusting journal entries. Spiceland - Chapter 02 #6 Topic: Identify and Describe Adjusting Entries

7.	The adjusted trial balance contains only permanent accounts.    FALSE

AACSB: Reflective Thinking AICPA BB: Critical Thinking Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-05 Record adjusting journal entries in general journal format; post entries; and prepare an adjusted trial balance. Spiceland - Chapter 02 #7 Topic: Record, Post, and Prepare an Adjusted Trial Balance

8.	The income statement summarizes the operating activity of a firm at a particular point in time.    FALSE

AACSB: Reflective Thinking AICPA BB: Critical Thinking Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-06 Describe the four basic financial statements. Spiceland - Chapter 02 #8 Topic: Describe the Four Basic Financial Statements

9.	The balance sheet can be considered a change or flow statement.    FALSE

AACSB: Reflective Thinking AICPA BB: Critical Thinking Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-06 Describe the four basic financial statements. Spiceland - Chapter 02 #9 Topic: Describe the Four Basic Financial Statements

10.	The statement of cash flows summarizes transactions that caused cash to change during a reporting period.    TRUE

AACSB: Reflective Thinking AICPA BB: Critical Thinking Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-06 Describe the four basic financial statements. Spiceland - Chapter 02 #10 Topic: Describe the Four Basic Financial Statements

11.	The statement of shareholders' equity discloses the changes in the temporary shareholders' equity accounts.    FALSE

AACSB: Reflective Thinking AICPA BB: Critical Thinking Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-06 Describe the four basic financial statements. Spiceland - Chapter 02 #11 Topic: Describe the Four Basic Financial Statements

12.	The post-closing trial balance contains only permanent accounts.    TRUE

AACSB: Reflective Thinking AICPA BB: Critical Thinking Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-07 Explain the closing process. Spiceland - Chapter 02 #12 Topic: Explain the Closing Process

13.	The closing process brings all temporary accounts to a zero balance and updates the balance in the retained earnings account.    TRUE

AACSB: Reflective Thinking AICPA BB: Critical Thinking Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-07 Explain the closing process. Spiceland - Chapter 02 #13 Topic: Explain the Closing Process

14.	A reversing entry at the beginning of a period for salaries would include a debit to salaries expense.    FALSE

AACSB: Reflective Thinking AICPA BB: Critical Thinking Blooms: Remember Difficulty: 2 Medium Learning Objective: 02-Appendix 2B Reversing Entries. Spiceland - Chapter 02 #14 Topic: Reversing Entries

15.	The sale of merchandise on account would be recorded in a sales journal.    TRUE

AACSB: Reflective Thinking AICPA BB: Critical Thinking Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-Appendix 2C Subsidiary Ledgers and Special Journals. Spiceland - Chapter 02 #15 Topic: Subsidiary Ledgers and Special Journals

16.	The payment of cash to a supplier would be recorded in a purchases journal.    FALSE

AACSB: Reflective Thinking AICPA BB: Critical Thinking Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-Appendix 2C Subsidiary Ledgers and Special Journals. Spiceland - Chapter 02 #16 Topic: Subsidiary Ledgers and Special Journals

17.	The accounting equation can be stated as:    A.  A + L - OE = 0. B.  A - L + OE = 0. C.  -A + L - OE = 0. D.  A - L - OE = 0.

AACSB: Reflective Thinking AICPA BB: Critical Thinking Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-01 Analyze routine economic events-transactions-and record their effects on a companys financial position using the accounting equation format. Spiceland - Chapter 02 #17 Topic: Analyze Routine Economic Events Using the Accounting Equation

18.	Examples of external transactions include all of the following except:    A.  Paying employees salaries. B.  Purchasing equipment. C.  Depreciating equipment. D.  Collecting a receivable.

AACSB: Reflective Thinking AICPA BB: Critical Thinking Blooms: Remember Difficulty: 2 Medium Learning Objective: 02-01 Analyze routine economic events-transactions-and record their effects on a companys financial position using the accounting equation format. Spiceland - Chapter 02 #18 Topic: Analyze Routine Economic Events Using the Accounting Equation

19.	Examples of internal transactions include all of the following except:    A.  Writing off an uncollectible account. B.  Recording the expiration of prepaid insurance. C.  Recording unpaid wages. D.  Paying wages to company employees.

AACSB: Reflective Thinking AICPA BB: Critical Thinking Blooms: Remember Difficulty: 2 Medium Learning Objective: 02-01 Analyze routine economic events-transactions-and record their effects on a companys financial position using the accounting equation format. Spiceland - Chapter 02 #19 Topic: Analyze Routine Economic Events Using the Accounting Equation

20.	XYZ Corporation receives $100,000 from investors for issuing them shares of its stock. XYZ's journal entry to record this transaction would include a:    A.  Debit to investments. B.  Credit to retained earnings. C.  Credit to capital stock. D.  Credit to revenue.

AACSB: Analytic AICPA FN: Reporting Blooms: Analyze Difficulty: 2 Medium Learning Objective: 02-01 Analyze routine economic events-transactions-and record their effects on a companys financial position using the accounting equation format. Spiceland - Chapter 02 #20 Topic: Analyze Routine Economic Events Using the Accounting Equation

21.	Incurring an expense for advertising on account would be recorded by:    A.  Debiting liabilities. B.  Crediting assets. C.  Debiting an expense. D.  Debiting assets.

AACSB: Analytic AICPA FN: Reporting Blooms: Analyze Difficulty: 2 Medium Learning Objective: 02-01 Analyze routine economic events-transactions-and record their effects on a companys financial position using the accounting equation format. Spiceland - Chapter 02 #21 Topic: Analyze Routine Economic Events Using the Accounting Equation

22.	A sale on account would be recorded by:    A.  Debiting revenue. B.  Crediting assets. C.  Crediting liabilities. D.  Debiting assets.

AACSB: Analytic AICPA FN: Reporting Blooms: Analyze Difficulty: 2 Medium Learning Objective: 02-02 Record transactions using the general journal format. Spiceland - Chapter 02 #22 Topic: Record Transactions Using the General Journal

23.	Mary Parker Co. invested $15,000 in ABC Corporation and received capital stock in exchange. Mary Parker Co.'s journal entry to record this transaction would include a:    A.  Debit to investments. B.  Credit to retained earnings. C.  Credit to capital stock. D.  Debit to expense.

AACSB: Analytic AICPA FN: Reporting Blooms: Analyze Difficulty: 2 Medium Learning Objective: 02-02 Record transactions using the general journal format. Spiceland - Chapter 02 #23 Topic: Record Transactions Using the General Journal

24.	Hughes Aircraft sold a four-passenger airplane for $380,000, receiving a $50,000 down payment and a 12% note for the balance. The journal entry to record this sale would include a:    A.  Credit to cash. B.  Debit to cash discount. C.  Debit to note receivable. D.  Credit to note receivable.

AACSB: Analytic AICPA FN: Reporting Blooms: Analyze Difficulty: 2 Medium Learning Objective: 02-02 Record transactions using the general journal format. Spiceland - Chapter 02 #24 Topic: Record Transactions Using the General Journal

25.	Somerset Leasing received $12,000 for 24 months rent in advance. How should Somerset record this transaction?    A.  B.  C.  D.

AACSB: Analytic AICPA FN: Reporting Blooms: Analyze Difficulty: 2 Medium Learning Objective: 02-02 Record transactions using the general journal format. Spiceland - Chapter 02 #25 Topic: Record Transactions Using the General Journal

26.	Davis Hardware Company uses a perpetual inventory system. How should Davis record the sale of merchandise, costing $620 and sold for $960 on account?    A.  B.  C.  D.

AACSB: Analytic AICPA FN: Reporting Blooms: Analyze Difficulty: 3 Hard Learning Objective: 02-02 Record transactions using the general journal format. Spiceland - Chapter 02 #26 Topic: Record Transactions Using the General Journal

27.	Ace Bonding Company purchased merchandise inventory on account. The inventory costs $2,000 and is expected to sell for $3,000. How should Ace record the purchase?    A.  B.  C.  D.

AACSB: Analytic AICPA FN: Reporting Blooms: Analyze Difficulty: 2 Medium Learning Objective: 02-02 Record transactions using the general journal format. Spiceland - Chapter 02 #27 Topic: Record Transactions Using the General Journal

28.	Which of the following accounts has a debit balance?    A.  Accounts payable. B.  Accrued taxes. C.  Accumulated depreciation. D.  Advertising expense.

AACSB: Reflective Thinking AICPA BB: Critical Thinking Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-03 Post the effects of journal entries to general ledger accounts and prepare an unadjusted trial balance. Spiceland - Chapter 02 #28 Topic: Post and Prepare an Unadjusted Trial Balance

29.	An example of a contra account is:    A.  Depreciation expense. B.  Accounts receivable. C.  Sales revenue. D.  Accumulated depreciation.

AACSB: Reflective Thinking AICPA BB: Critical Thinking Blooms: Remember Difficulty: 1 Easy Learning Objective: 02-03 Post the effects of journal entries to general ledger accounts and prepare an unadjusted trial balance. Spiceland - Chapter 02 #29 Topic: Post and Prepare an Unadjusted Trial Balance

30.	Making insurance payments in advance is an example of:    A.  An accrued receivable transaction. B.  An accrued liability transaction. C.  An unearned revenue transaction. D.  A prepaid expense transaction.

AACSB: Reflective Thinking AICPA BB: Critical Thinking Blooms: Create Difficulty: 1 Easy Learning Objective: 02-04 Identify and describe the different types of adjusting journal entries. Spiceland - Chapter 02 #30 Topic: Identify and Describe Adjusting Entries