,DOWNLOAD THE Test Bank for Financial Accounting Information forDecis
v v v v v v v v v
ions 9th Edition Wildv v v
FinancialvAccounting,v9ev(Wild)
Chapterv2 FinancialvStatementsvandvthevAccountingvSystem
1) Thevfirstvstepvinvthevprocessingvofvavtransactionvisvtovanalyzevthevtransactionvandvsourcevd
ocuments.
2) Preparationvofvavtrialvbalancevisvthevfirstvstepvinvprocessingvavfinancialvtransaction.
3) Sourcevdocumentsvidentifyvandvdescribevtransactionsvandveventsventeringvthevaccountingvp
rocess.
4) Itemsvsuchvasvsalesvtickets,vbankvstatements,vchecks,vandvpurchasevordersvarevexamplesvofvavb
usiness'svsourcevdocuments.
5) Anvaccountvisvavrecordvofvincreasesvandvdecreasesvinvavspecificvasset,vliability,vequity,vrevenue,vo
rvexpensevitem.
6) Avcustomer'svpromisevtovpayvonvcreditvisvclassifiedvasvanvaccountvpayablevbyvthevseller.
7) Dividendsvpaidvtovstockholdersvarevavbusinessvexpense.
8) Anvunclassifiedvbalancevsheetvbroadlyvgroupsvaccountsvintovassets,vliabilities,vandvequity
9) Unearnedvrevenuesvarevclassifiedvasvliabilities.
10) Dividendsvdistributedvtovstockholdersvshouldvbevtreatedvasvanvexpensevofvthevbusiness.
11) Whenvavcompanyvprovidesvservicesvforvwhichvcashvwillvnotvbevreceivedvuntilvsomevfuturevd
ate,vthevcompanyvshouldvrecordvthevamountvbilledvasvaccountsvreceivable.
12) Dividendsvalwaysvdecreasevequity.
13) Expensesvalwaysvdecreasevequity.
14) Revenuesvalwaysvincreasevequity.
15) Stockholdervinvestmentsvalwaysvdecreasevequity.
16) Unearnedvrevenuevisvavliabilityvthatvisvsettledvinvthevfuturevwhenvavcompanyvdeliversvitsvp
roductsvorvservices.
17) Avcompany'svchartvofvaccountsvisvavlistvofvallvthevaccountsvusedvandvincludesvanvidentificationvn
umbervassignedvtoveachvaccount.
18) Anvaccount'svbalancevisvthevdifferencevbetweenvthevtotalvdebitsvandvtotalvcreditsvforvtheva
ccount,vincludingvanyvbeginningvbalance.
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HillvEducation.vAllvrightsvreserved.vNovreproductionvorvdistributionvwithoutvthevpriorvwrittenvconsentvofvMcGraw-
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,DOWNLOAD THE Test Bank for Financial Accounting Information forDecis
v v v v v v v v v
ions 9th Edition Wildv v v
19) Thevrightvsidevofvanvaccountvisvcalledvthevdebitvside.
20) Invavdouble-
entryvaccountingvsystem,vthevtotalvdollarvamountvdebitedvmustvalwaysvequalvthevtotalvdollarvamou
ntvcredited.
21) Increasesvinvliabilityvaccountsvarevrecordedvasvdebits.
22) Debitsvincreasevassetvandvexpensevaccounts.
23) Creditsvalwaysvincreasevaccountvbalances.
24) Creditingvanvexpensevaccountvdecreasesvit.
25) Avrevenuevaccountvnormallyvhasvavdebitvbalance.
26) Assetvaccountsvarevdecreasedvbyvdebits.
27) Debitvmeansvincreasevandvcreditvmeansvdecreasevforvallvaccounts.
28) Assetvaccountsvnormallyvhavevdebitvbalancesvandvrevenuevaccountsvnormallyvhavevcreditv
balances.
29) Thevdividendsvaccountvnormallyvhasvavdebitvbalance.
30) Avdebitventryvisvalwaysvanvincreasevinvthevaccount.
31) Avtransactionvthatvcreditsvanvassetvaccountvandvcreditsvavliabilityvaccountvmustvalsovaffectvonevo
rvmorevothervaccounts.
32) Avtransactionvthatvdecreasesvavliabilityvandvincreasesvanvassetvmustvalsovaffectvonevorvmorevo
thervaccounts.
33) Ifvinsurancevcoveragevforvthevnextvtwovyearsvisvpaidvforvinvadvance,vthevamountvofvthevp
aymentvisvdebitedvtovanvassetvaccountvcalledvPrepaidvInsurance.
34) ThevpurchasevofvsuppliesvonvcreditvshouldvbevrecordedvwithvavdebitvtovSuppliesvandvavcreditvtov
AccountsvPayable.
35) Ifvavcompanyvpurchasesvequipmentvpayingvcash,vthevjournalventryvtovrecordvthisvtransactionv
willvincludevavdebitvtovCash.
36) Ifvavcompanyvprovidesvservicesvtovavcustomervonvcredit,vthevcompanyvprovidingvthevservicevs
houldvcreditvAccountsvReceivable.
37) Whenvavcompanyvbillsvavcustomervforv$700vforvservicesvrendered,vthevjournalventryvtovrecordvt
2
Copyrightv2019v©vMcGraw-
HillvEducation.vAllvrightsvreserved.vNovreproductionvorvdistributionvwithoutvthevpriorvwrittenvconsentvofvMcGraw-
HillvEducation.
mynursytest.store
, DOWNLOAD THE Test Bank for Financial Accounting Information forDecis
v v v v v v v v v
ions 9th Edition Wildv v v
hisvtransactionvwillvincludevav$700vdebitvtovServicesvRevenue.
3
Copyrightv2019v©vMcGraw-
HillvEducation.vAllvrightsvreserved.vNovreproductionvorvdistributionvwithoutvthevpriorvwrittenvconsentvofvMcGraw-
HillvEducation.
mynursytest.store
v v v v v v v v v
ions 9th Edition Wildv v v
FinancialvAccounting,v9ev(Wild)
Chapterv2 FinancialvStatementsvandvthevAccountingvSystem
1) Thevfirstvstepvinvthevprocessingvofvavtransactionvisvtovanalyzevthevtransactionvandvsourcevd
ocuments.
2) Preparationvofvavtrialvbalancevisvthevfirstvstepvinvprocessingvavfinancialvtransaction.
3) Sourcevdocumentsvidentifyvandvdescribevtransactionsvandveventsventeringvthevaccountingvp
rocess.
4) Itemsvsuchvasvsalesvtickets,vbankvstatements,vchecks,vandvpurchasevordersvarevexamplesvofvavb
usiness'svsourcevdocuments.
5) Anvaccountvisvavrecordvofvincreasesvandvdecreasesvinvavspecificvasset,vliability,vequity,vrevenue,vo
rvexpensevitem.
6) Avcustomer'svpromisevtovpayvonvcreditvisvclassifiedvasvanvaccountvpayablevbyvthevseller.
7) Dividendsvpaidvtovstockholdersvarevavbusinessvexpense.
8) Anvunclassifiedvbalancevsheetvbroadlyvgroupsvaccountsvintovassets,vliabilities,vandvequity
9) Unearnedvrevenuesvarevclassifiedvasvliabilities.
10) Dividendsvdistributedvtovstockholdersvshouldvbevtreatedvasvanvexpensevofvthevbusiness.
11) Whenvavcompanyvprovidesvservicesvforvwhichvcashvwillvnotvbevreceivedvuntilvsomevfuturevd
ate,vthevcompanyvshouldvrecordvthevamountvbilledvasvaccountsvreceivable.
12) Dividendsvalwaysvdecreasevequity.
13) Expensesvalwaysvdecreasevequity.
14) Revenuesvalwaysvincreasevequity.
15) Stockholdervinvestmentsvalwaysvdecreasevequity.
16) Unearnedvrevenuevisvavliabilityvthatvisvsettledvinvthevfuturevwhenvavcompanyvdeliversvitsvp
roductsvorvservices.
17) Avcompany'svchartvofvaccountsvisvavlistvofvallvthevaccountsvusedvandvincludesvanvidentificationvn
umbervassignedvtoveachvaccount.
18) Anvaccount'svbalancevisvthevdifferencevbetweenvthevtotalvdebitsvandvtotalvcreditsvforvtheva
ccount,vincludingvanyvbeginningvbalance.
1
Copyrightv2019v©vMcGraw-
HillvEducation.vAllvrightsvreserved.vNovreproductionvorvdistributionvwithoutvthevpriorvwrittenvconsentvofvMcGraw-
HillvEducation.
mynursytest.store
,DOWNLOAD THE Test Bank for Financial Accounting Information forDecis
v v v v v v v v v
ions 9th Edition Wildv v v
19) Thevrightvsidevofvanvaccountvisvcalledvthevdebitvside.
20) Invavdouble-
entryvaccountingvsystem,vthevtotalvdollarvamountvdebitedvmustvalwaysvequalvthevtotalvdollarvamou
ntvcredited.
21) Increasesvinvliabilityvaccountsvarevrecordedvasvdebits.
22) Debitsvincreasevassetvandvexpensevaccounts.
23) Creditsvalwaysvincreasevaccountvbalances.
24) Creditingvanvexpensevaccountvdecreasesvit.
25) Avrevenuevaccountvnormallyvhasvavdebitvbalance.
26) Assetvaccountsvarevdecreasedvbyvdebits.
27) Debitvmeansvincreasevandvcreditvmeansvdecreasevforvallvaccounts.
28) Assetvaccountsvnormallyvhavevdebitvbalancesvandvrevenuevaccountsvnormallyvhavevcreditv
balances.
29) Thevdividendsvaccountvnormallyvhasvavdebitvbalance.
30) Avdebitventryvisvalwaysvanvincreasevinvthevaccount.
31) Avtransactionvthatvcreditsvanvassetvaccountvandvcreditsvavliabilityvaccountvmustvalsovaffectvonevo
rvmorevothervaccounts.
32) Avtransactionvthatvdecreasesvavliabilityvandvincreasesvanvassetvmustvalsovaffectvonevorvmorevo
thervaccounts.
33) Ifvinsurancevcoveragevforvthevnextvtwovyearsvisvpaidvforvinvadvance,vthevamountvofvthevp
aymentvisvdebitedvtovanvassetvaccountvcalledvPrepaidvInsurance.
34) ThevpurchasevofvsuppliesvonvcreditvshouldvbevrecordedvwithvavdebitvtovSuppliesvandvavcreditvtov
AccountsvPayable.
35) Ifvavcompanyvpurchasesvequipmentvpayingvcash,vthevjournalventryvtovrecordvthisvtransactionv
willvincludevavdebitvtovCash.
36) Ifvavcompanyvprovidesvservicesvtovavcustomervonvcredit,vthevcompanyvprovidingvthevservicevs
houldvcreditvAccountsvReceivable.
37) Whenvavcompanyvbillsvavcustomervforv$700vforvservicesvrendered,vthevjournalventryvtovrecordvt
2
Copyrightv2019v©vMcGraw-
HillvEducation.vAllvrightsvreserved.vNovreproductionvorvdistributionvwithoutvthevpriorvwrittenvconsentvofvMcGraw-
HillvEducation.
mynursytest.store
, DOWNLOAD THE Test Bank for Financial Accounting Information forDecis
v v v v v v v v v
ions 9th Edition Wildv v v
hisvtransactionvwillvincludevav$700vdebitvtovServicesvRevenue.
3
Copyrightv2019v©vMcGraw-
HillvEducation.vAllvrightsvreserved.vNovreproductionvorvdistributionvwithoutvthevpriorvwrittenvconsentvofvMcGraw-
HillvEducation.
mynursytest.store
