Question: Listed as follows are descriptions of six
Listed as follows are descriptions of six transactions, followed by a table listing six unique combinations of financial statement effects (I is for increase, D is for decrease, and NE is for no effect). In the blank space to the left of each transaction description, place the appropriate letter from the table that indicates the effects of that transaction on the various elements of the financial statements. 1. _____ Issued capital stock in exchange for $50,000 cash. 2. _____ Billed clients $20,000 on account. 3. _____Placed a $300 advertisement in the local newspaper. The entire amount is due in 30 days. 4. _____ Collected $100 on account from clients. 5. _____ Recorded and paid a $12,000 dividend. 6. _____ Recorded and paid salaries of $15,000. 
Transcribed Image Text:
Transaction Revenuo Бxрenses Assets Llabilitles Owners' Equity а. NE NE b. NE D NE D C. NE NE D NE D. d. NE NE NE e. NE NE f. NE NE NE NE NE
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> (a) Why does the AS curve slope upward? (b) If the AS curve were more steeply sloped, how would the economy respond differently to aggregate demand shocks (shocks to
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> Between 2006 and the middle of 2008, oil prices rose sharply—from around $60 to more than $140 per barrel. By the end of 2008, however, oil prices had fallen even more sharply, to just over $40 per barrel. Think of these events as two separate shocks. (a
> It is common to blame some of the poor macroeconomic performance of the 1970s on the rise in oil prices. In the middle of the 1980s, however, oil prices declined sharply. Using the AS/AD framework, explain the macroeconomic consequences of a one- time ne
> This question asks you to use the FRED database to predict the fed funds rate using the chapter’s monetary policy rule. Of course, there are many possible inflation measures you could use. This question lets you consider two common ones. (a) The Fed like
> Consider the economy from exercise 4. Calculate the inflation rate for the 2020–2021 period using the GDP deflator based on the Laspeyres, Paasche, and chain- weighted indexes of GDP. Data from Exercise 4: Look back at Tab
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> What is the meaning of the term expenses? Does the payment of cash by a business indicate that an expense has been incurred? Explain.
> How do dividends affect owners’ equity? Are they treated as a business expense? Explain.
> What are some of the limitations of a trial balance?
> What is the meaning of the term revenue? Does the receipt of cash by a business indicate that revenue has been earned? Explain.
> Does net income represent a supply of cash that could be distributed to stockholders in the form of dividends? Explain.
> On May 26, Breeze Camp Ground paid KPRM Radio $500 cash for ten 30-second advertisements. Three of the ads were aired in May, five in June, and two in July. a. Apply the realization principle to determine how much advertising revenue KPRM Radio earned f
> Happy Trails, Inc., is a popular family resort just outside Yellowstone National Park. Summer is the resort’s busy season, but guests typically pay a deposit at least six months in advance to guarantee their reservations. The resort is currently seeking
> Visit the home page of PC Connection at the following Internet location: www.pcconnection. com Follow the “Investor Relations” link at the bottom of the company’s home page and access its most recent 10-K by following the link to “SEC Filings.” Locate th
> Wagner Excavating organized as a corporation on January 18 and engaged in the following transactions during its first two weeks of operation. Jan. 18 Issued capital stock in exchange for $400,000 cash. Jan. 22 Borrowed $100,000 from its bank by issuing
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> Record the following selected transactions in general journal form for Quantum Clinic, Inc. Include a brief explanation of the transaction as part of each journal entry. Oct. 1 The clinic issued 5,000 additional shares of capital stock to Doctor Soges
> Listed as follows in random order are the eight steps comprising a complete accounting cycle. Prepare a trial balance. Journalize and post the closing entries. Prepare financial statements. Post transaction data to the ledger. Prepare an adjuste
> Explain the effect of operating profitably on the balance sheet of a business entity.
> What requirement is imposed by the double-entry system in the recording of any business transaction?
> State briefly the rules of debit and credit as applied to asset accounts and as applied to liability and owners’ equity accounts.
> List some of the more analytical functions performed by professional accountants.
> Explain the rules of debit and credit with respect to transactions recorded in revenue and expense accounts.
> In what accounting period does the matching principle indicate that an expense should be recognized?
> When do accountants consider revenue to be realized? What basic question about recording revenue in accounting records is answered by the realization principle?
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> Listed as follows are eight technical accounting terms introduced in this chapter Realization principle Credit Time period principle Accounting period Matching principle Expenses Net income Accounting c
> Listed as follows are descriptions of six transactions, followed by a table listing six unique combinations of financial statement effects (I is for increase, D is for decrease, and NE is for no effect). In the blank space to the left of each transaction
> Listed are eight transactions the Foster Corporation made during November. a. Issued stock in exchange for cash. b. Purchased land. Made partial payment with cash and issued a note payable for the remaining balance. c. Recorded utilities expense for N
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> Transactions are first journalized and then posted to ledger accounts. In this exercise, however, your understanding of the relationship between the journal and the ledger is tested by asking you to study some ledger accounts and determine the journal en
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> A number of transactions of Claypool Construction are described as follows in terms of accounts debited and credited. 1. Debit Wages Expense; credit Wages Payable. 2. Debit Accounts Receivable; credit Construction Revenue. 3. Debit Dividends; credit C
> Satka Fishing Expeditions, Inc., recorded the following transactions in July. 1. Provided an ocean fishing expedition for a credit customer; payment is due August 10. 2. Paid Marine Service Center for repairs to boats performed in June. (In June, Satka
> Does the term debit mean increase and the term credit mean decrease? Explain.
> What relationship exists between the position of an account in the balance sheet equation and the rules for recording increases in that account?
> Baker Construction is a small corporation owned and managed by Tom Baker. The corporation has 21 employees, few creditors, and no investor other than Tom Baker. Thus, like many small businesses, it has no obligation to issue financial statements to credi
> The following transactions were carried out during the month of May by Hagen and Associates, a firm of design architects. For each of the five transactions, state whether the transaction represented revenue to the firm during the month of May. Give reaso
> Infosys Technologies, Inc., an Indian technology company, reported net income of $419 million this year. Analysts expect the company’s earnings to be $1.468 billion in five years. What is the expected growth rate in the company’s earnings?
> What is the appropriate decision rule for a firm considering undertaking a capital project? Give a real-life example?
> What ethical conflict does insider trading present?
> Describe what an information asymmetry is in a business transaction. Explain how the inequity associated with an information asymmetry might be, at least partially, solved through the market for goods or services?
> What are some ways to resolve a conflict of interest?
> How can a lack of business ethics negatively affect the performance of an economy? Give an example.
> What is an agency relationship, and what is an agency conflict? How can agency conflicts be reduced in a corporation?
> What is the appropriate goal of financial managers? How do managers’ decisions affect how successful the firm is in achieving this goal?
> All public companies must hire a certified public accounting firm to perform an independent audit of their financial statements. What exactly does the term audit mean?
> What is the primary responsibility of the board of directors in a corporation?
> You have an opportunity to invest $2,500 today and receive $3,000 in three years. What would be the return on your investment if you accepted this opportunity?
> What is a partnership, and what is the biggest disadvantage of this form of business organization? How can this disadvantage be avoided?
> What are the advantages and disadvantages of a sole proprietorship?
> What is a firm’s capital structure, and why is it important?
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> What is the difference between the expected rate of return and the required rate of return? What does it mean if they are different for a particular asset at a particular point in time?
> Suppose that you know the risk and the expected return for two stocks. Discuss the process you might utilize to determine which of the two stocks is a better buy. You may assume that the two stocks will be the only assets held in your portfolio?
> You may have heard the statement that you should not include your home as an asset in your investment portfolio. Assume that your house will comprise up to 75 percent of your assets in the early part of your investment life. Evaluate the implications of
> The CAPM is used to price the risk (estimate the expected return) for any asset. Our examples have focused on stocks, but we could also use CAPM to estimate the expected rate of return for bonds. Explain why?
> Which investment category included in Exhibit 7.3 has shown the greatest degree of risk in the United States since 1926? Explain why that makes sense in a world where the value of an asset in this investment category is likely to be more sensitive to cha
> The idea that we can know the return on a security for each possible outcome is overly simplistic. However, even though we cannot possibly predict all possible outcomes, this fact has little bearing on the risk-free return. Explain why?
> Megan Gaumer expects to need $50,000 for a down payment on a house in six years. How much does she need to invest today in an account paying 7.25 percent in order to have $50,000 in six years?
> The correlation between stocks A and B is 0.50, while the correlation between stocks A and C is –0.5. You already own stock A and are thinking of buying either stock B or stock C. If you want your portfolio to have the lowest possible risk, would you buy
> Explain the economic role of brokers and dealers. How does each make a profit?
> What are the three fundamental decisions the financial manager is concerned with, and how do they affect the firm’s balance sheet?
> Describe the cash flows between a firm and its stakeholders?
> Explain how compound interest differs from simple interest?
> Explain the difference between compounding and discounting?
> Explain the importance of a time line?
> You are planning to take a spring break trip to Cancun your senior year. The trip is exactly two years away, but you want to be prepared and have enough money when the time comes. Explain how you would determine the amount of money you will have to save
> Explain the phrase “a dollar today is worth more than a dollar tomorrow”?
