Exercise 12.7 Cash dividends, stock dividends, and share splits L.O. 4

In recording an accounting transaction in a double-entry systema.the number of debit accounts must equal the number of credit ac

Elodia [21]

Answer:

c. The amount of the debits must equal the amount of the credits.

Explanation:

a. The number of debit accounts must equal the number of credit accounts.

An account means one record entry of a transaction. There may be more credit or more debit accounts, depending on the transactions.

b. There must always be entries made on both sides of the accounting equation.

Although this happens most often, it is not always true.

The Accounting Equation: Assets = Liabilities + Owner's Equity

The two sides are separated by the equal sign. There can be a transaction that's only on one side. Example:

I buy a chair for $50 cash. Only the furniture and cash accounts are affected, and they are both on the assets side.

c. The amount of the debits must equal the amount of the credits.

This must always be equal. When you increase an asset (debit), you will increase owner's equity (credit). When you decrease an asset (credit) you could either decrease owner's equity or liability (debit).

d. There must only be two accounts affected by any transaction.

This is untrue. Sometimes, three or more accounts can be affected. For example, if I buy a chair, giving $20 down payment and borrowing $30 from the bank. The three accounts affected are furniture (increase by $50), cash (decrease by $20), and bank loan (increase by $30).

4 0

3 years ago

What type of Businesses organization has limited liability ?

aleksandrvk [35]

Answer:

limited liability company or LLC is a hybrid business structure that provides the limited legal liability of a corporation and the operational flexibility of a partnership or sole proprietorship.

Explanation:

4 0

3 years ago

On November 28, 2021, Shocker receives a $2,250 payment from a customer for services to be rendered evenly over the next three m

Daniel [21]

Answer:

Dec 31, 2021

DR Deferred Revenue ...................................................$750

CR Service Revenue ...............................................................$750

Working

Service provided at end of November so only one month left in the year. Revenue earned is;

= 2,250/ 3 months

= $750

Dec 31, 2021

DR Advertising Expense ..................................................$750

CR Prepaid Adevertising............................................................$750

Working

Advertising is for 3 months and only one month has elapsed;

= 2,250/ 3 months

= $750

Dec 31, 2021

DR Salaries Expense ............................................................$6,500

CR Salaries Payable...........................................................................$6,500

Dec 31, 2021

DR Interest Expense .............................................................. $1,650

CR Interest Payable...............................................................................$1,650

Working

9% is payable on the note for the year.

This figure will be apportioned monthly and since 4 months were left when it was signed, the interest will be for 4 months

= 55,000 * 9% * 4/12 months

= $1,650

7 0

3 years ago

Choose the correct statements below regarding the transfer of financial assets such as receivables:

WARRIOR [948]

Answer:

The correct statement regarding the transfer of financial assets such as receivables:

b. II only.

Explanation:

The transfer is not regarded as payment for the debt. Therefore, a liability is recorded for the amount borrowed while the financial asset remains in the records of the transferor until the final settlement. Appropriate disclosures are made in the transferor's financial statements about the security on the financial assets.

5 0

3 years ago

Privatization and nationalization are a. Both risks faced by privately held firms. b. Similar trends. c. Opposing trends.

Alex_Xolod [135]

Answer:

C.

Explanation:

Privatization and nationalization are two words that have opposite meanings, which makes them antonyms. Privatization is the process by which a government-owned business or a publicly-owned business is transferred into private ownership. The idea may be that privatization leads to a more efficient institution. Nationalization is the process by which privately owned business is transferred into government or public ownership. The idea may be that the business is so important to the well-being of the public that it can not be trusted to private individuals, or it may be that the government is over-reaching. Nationalization is the process of transforming private assets into public assets by bringing them under the public ownership of a national government or state.Nationalization usually refers to private assets or assets owned by lower levels of government, such as municipalities, being transferred to the state .The opposites of nationalization are privatization and demutualization. When previously nationalized assets are privatized and subsequently returned to public ownership at a later stage, they are said to have undergone re-nationalization. Industries that are usually subject to nationalization include transport, communications, energy, banking, and natural resources. Therefore privatization and nationalization are opposing trends. C is correct .

6 0

3 years ago