17. Purchasing supplies on account increases the balance of the Accounts Receivable account. FALSE The balance of Accounts Payable increases. AACSB: Reflective Thinking AICPA: FN Measurement Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 02-02 Analyze the impact of external transactions on the accounting equation. Topic: Effects of Transactions on the Basic Accounting Equation 18. Amounts owed from customers are recorded in the Accounts Receivable account. TRUE AACSB: Reflective Thinking AICPA: FN Measurement Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 02-02 Analyze the impact of external transactions on the accounting equation. Topic: Effects of Transactions on the Basic Accounting Equation 19. The two components of stockholders' equity are Debits and Credits. FALSE The two components of stockholders' equity are Common Stock and Retained Earnings. AACSB: Reflective Thinking AICPA: FN Measurement Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 02-02 Analyze the impact of external transactions on the accounting equation. Topic: Effects of Transactions on the Basic Accounting Equation
76. Assume that Sallisaw Sideboards, Inc. had a retained earnings balance of $10,000 on April 1, and that the company had the following transactions during April. Issued common stock for cash, $5,000. Provided services to customers on account, $2,000. Provided services to customers in exchange for cash, $900. Purchased equipment and paid cash, $4,300. Paid April rent, $800. Paid employees' salaries for April, $700. What was Sallisaw's retained earnings balance at the end of April? Beginning retained earnings $10,000 + Net income $1,400 - Dividends $0 = Ending retained earnings $11,400. Net Income = Revenue ($2,000 + $900) - Expenses ($800 + $700) = $1,400. AACSB: Analytical Thinking AICPA: FN Measurement Accessibility: Keyboard Navigation Blooms: Analyze Blooms: Understand Difficulty: 3 Hard Learning Objective: 02-02 Analyze the impact of external transactions on the accounting equation. Topic: Effects of Transactions on the Basic Accounting Equation
127. Daniel Dino Restaurant owes employees' salaries of $15,000. This would be recorded as: AACSB: Reflective Thinking AICPA: FN Measurement Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 02-04 Record transactions in a journal using debits and credits. Topic: Recording Transactions in a Journal 128. Jerome purchased a building for his business by signing a note to be repaid over the next ten years. Which of the following correctly describes how to record this transaction? AACSB: Reflective Thinking AICPA: FN Measurement Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 02-04 Record transactions in a journal using debits and credits. Topic: Recording Transactions in a Journal 129. Incurring an expense for advertising on account would be recorded by: AACSB: Reflective Thinking AICPA: FN Measurement Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 02-04 Record transactions in a journal using debits and credits. Topic: Recording Transactions in a Journal