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Exam 2: Analyzing Transactions

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Question 121

Multiple Choice

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The stockholders' equity will be reduced by all of the following except

A) revenues
B) expenses
C) dividends
D) all of these

E) C) and D)
F) B) and D)

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Question 122

Multiple Choice

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Which of the following applications of the rules of debit and credit is true?

A) decrease Prepaid Insurance with a credit and the normal balance is a credit
B) increase Accounts Payable with a credit and the normal balance is a debit
C) increase Equipment with a debit and the normal balance is a debit
D) decrease Cash with a debit and the normal balance is a credit

E) A) and C)
F) None of the above

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Question 123

Multiple Choice

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Faso Fabricating, Inc. and Spinoza Fabrication Corp. are in the same industry and are located in the same region of the country. They have condensed income statements as shown. Using horizontal analysis, calculate the percent change for sales for each company. Round percentages to one decimal place.

Which of the following stockholders' equity accounts follows the same debit and credit rules as liabilities?

The Unearned Revenues account is an example of a liability.

For each of the following accounts, indicate whether its normal balance is on the credit side or the debit side of the T account.a.Credit side b.Debit side -Common Stock

Which of the following describes the classification and normal balance of the fees earned account?

Even when a trial balance is in balance, there may be errors in the individual accounts.

When an owner invests assets in the business, the retained earnings account increases due to revenue being earned.

Nebraska Technologies has a condensed income statement as shown: REQUIRED: Prepare a horizontal analysis of Nebraska Technologies'income statements. Comment on the trends, both favorable and unfavorable.

Prepaid expenses are an example of an expense.

Prepare a journal entry on October 12 for the fees earned on account, $14,600. Omit explanation.

Which of the following entries records the receipt of cash from cash customers for services provided?

An overpayment error was discovered in computing and paying the wages of a Jamison Tree Trimming employee. When Jamison receives cash from the employee for the amount of the overpayment, which of the following entries will Jamison make?