Answers to Study Guide Questions

CHAPTER 1
PART 1
1. 2. 3. 4. 5. T F F T T

True False
6. 7. 8. 9. 10. T T T T T

PART 2
1. 2. 3. 4. 5. 6. 7.

CompletionLanguage of Business
sole proprietorship liabilities creditor accounts transaction capital fundamental accounting equation 8. 9. 10. 11. 12. 13. chart of accounts equity Revenue withdrawal Accounts Receivable Expenses

PART 3

Classifying Accounts
Owners Equity S. Morton, Capital S. Morton, Drawing Revenue Income from Services Expenses Wages Expense Rent Expense Supplies Expense

Assets Office Equipment Building Cash Land Prepaid Insurance Neon Sign Liabilities Accounts Payable Mortgage Payable

PART 4
0. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Analyzing Transactions
Example: Owner invested cash Payment of rent Sales of services for cash Investment of equipment by owner Payment of insurance premium for two years Payment of wages Sales of services on account Withdrawal of cash by owner Purchase of supplies on account Collection from charge customer previously billed Payment made to creditor on account

A + + + + + +

OE

E +

+ + + + + + +

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