Financial Accounting 11th Edition Harrison SOLUTIONS MANUAL(Harrison,Horngren,Thomas)

Financial Accounting 11th Edition Harrison SOLUTIONS
MANUAL(Harrison/Horngren/Thomas)




Financial Accounting, 11e (Harrison/Horngren/Thomas)
Chapter 2 Transaction Analysis

1 Learning Objective 2-1

1)A transaction is any event that has a financial impact on the business and that can
be measured reliably.
Answer: TRUE
Diff: 1 Var: 1
LO: 2-1
AACSB: Reflective Thinking
AICPA Bus Persp:
Legal/Regulatory AICPA
Functional: Measurement

2)Business events are recorded even if the financial impact cannot
be measured. Answer: FALSE
Diff: 1 Var: 1
LO: 2-1
AACSB: Reflective Thinking
AICPA Bus Persp:
Legal/Regulatory AICPA
Functional: Measurement

3)Transactions provide objective information about the financial impact of an
exchange on an entity. Answer: TRUE
Diff: 1 Var: 1
LO: 2-1
AACSB: Reflective Thinking
AICPA Bus Persp:
Legal/Regulatory AICPA
Functional: Measurement

4)Which of the following is NOT a business transaction?




1

,A) A company buys goods on account.
B)A company sells land for cash.
C) A company fired 10 percent of the employees due to lackluster sales.
D) A company borrows money from the
bank. Answer: C
Diff: 2 Var: 1
LO: 2-1
AACSB: Analytical Thinking
AICPA Bus Persp: Strategic/Critical
Thinking AICPA Functional:
Measurement




2

,5)Which of the following is a business transaction?
A) A company signs a contact for services to be provided during the first quarter of the
next fiscal year.
B)A company pays its employees a year-end bonus.
C) A company hires a new marketing manager.
D) A company applies for a mortgage that will be used to purchase a new
office building. Answer: B
Diff: 2 Var: 1
LO: 2-1
AACSB: Analytical Thinking
AICPA Bus Persp: Strategic/Critical
Thinking AICPA Functional:
Measurement

2 Learning Objective 2-2

1)The account is the basic summary device of
accounting. Answer: TRUE
Diff: 1 Var: 1
LO: 2-2
AACSB: Reflective Thinking
AICPA Bus Persp:
Legal/Regulatory AICPA
Functional: Measurement

2)An accounts receivable represents the promise of the business to
pay a debt. Answer: FALSE
Diff: 2 Var: 1
LO: 2-2
AACSB: Reflective Thinking
AICPA Bus Persp:
Legal/Regulatory AICPA
Functional: Measurement

3)Prepaid rent is an expense because the payment provides a future benefit of
the company. Answer: FALSE
Diff: 2 Var: 1
LO: 2-2
AACSB: Reflective Thinking
AICPA Bus Persp:
Legal/Regulatory AICPA
Functional: Measurement

4)Assets include cash, land, and accounts
payable. Answer: FALSE
Diff: 2 Var: 1
LO: 2-2
AACSB: Reflective Thinking
AICPA Bus Persp:
Legal/Regulatory
AICPA Functional: Measurement, Reporting




3

, 5)Cost of goods sold is an example of a revenue
account. Answer: FALSE
Diff: 2 Var: 1
LO: 2-2
AACSB: Reflective Thinking
AICPA Bus Persp:
Legal/Regulatory
AICPA Functional: Measurement, Reporting

6)An accrued liability is a liability for an expense that has not yet
been paid. Answer: TRUE
Diff: 2 Var: 1
LO: 2-2
AACSB: Reflective Thinking
AICPA Bus Persp:
Legal/Regulatory
AICPA Functional: Measurement, Reporting

7)A prepaid expense is an
asset. Answer: TRUE
Diff: 2 Var: 1
LO: 2-2
AACSB: Reflective Thinking
AICPA Bus Persp:
Legal/Regulatory
AICPA Functional: Measurement, Reporting

8)A record of all the changes in a particular asset during a period of time is found in a(n):
A) transaction.
B)trial balance.
C) prior period's balance sheet.
D) account.
Answer: D
Diff: 1 Var:
1 LO: 2-2
AACSB: Reflective Thinking
AICPA Bus Persp:
Legal/Regulatory AICPA
Functional: Measurement

9)All of the following accounts would be considered assets EXCEPT for:
A) Cash.
B)Retained Earnings.
C) Prepaid Expenses.
D) Notes
Receivable.
Answer: B
Diff: 2 Var: 1
LO: 2-2
AACSB: Reflective Thinking
AICPA Bus Persp:
Legal/Regulatory AICPA
Functional: Measurement




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