Test Bank For Fundamental Financial Accounting Concepts 9th Edition By Thomas Edmonds – Test Bank

Quiz Collection For Essential Monetary Accounting Ideas ninth Version By Thomas Edmonds

Chapter 01 An Overview of Accounting Reply Sheet
Concise Answer Inquiries
Illustrate how each incident influences the facets of monetary statements. Employ the subsequent characters to annotate your response in the designated field below each constituent. You are not required to input figures.

1. Walker Co. issued standard stock for $150,000 cash.

Answer: (I) (N) (I) (N) (N) (N) (I)

Learning Purpose: 01-02

Learning Stage: 2 Moderate

Subject Area: Recording Corporate Events Under the Accounting Equation AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Blooms: Analyze

Guidance: Issuing standard stock is an asset inflow transaction that boosts the company’s assets (cash) and its shareholders’ equity (standard stock). It does not influence the income statement but is documented as a cash flow from financing activities in the cash flow statement.

2. Nguyen Co. borrowed $50,000 cash from MetropolitanBank.

Answer: (I) (I) (N) (N) (N) (N) (I)

Learning Purpose:01-08

Subject Area: Recording Corporate Events Under the Accounting Equation AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Blooms: Analyze Difficulty: 2 Moderate

Guidance: Borrowing cash is an asset inflow transaction that heightens a company’s assets (cash) and its liabilities (notes payable). It does not impact the income statement but is documented as a cash flow from financing activities in the cash flow statement.

3. Bell Co. provided consulting services for $20,000 cash.

Answer: (I) (N) (I) (I) (N) (I) (I)

Learning Purpose:01-08

Subject Area: Recording Corporate Events Under the Accounting Equation AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Blooms: Analyze Difficulty: 2 Moderate

Guidance: This constitutes an asset inflow transaction that enhances the company’s assets (cash). When a company offers services, it accrues revenue. Revenue boosts net income, which will amplify equity (retained earnings) at the close of the accounting period. This occurrence is documented as a cash flow from operating activities in the cash flow statement.

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