8

Additional Business Activities

In Chapter 8, students learn to record additional operating, investing, and financing activities—

including both cash and noncash transactions. This includes sales and purchases on account, borrowing

and investing transactions, as well as noncash debt for asset exchanges.

CHAPTER 8 QUESTIONS

1. A loan amortization schedule contains the payment amount and that portion which represents
interest expense and principal reduction.
2. To record the transfer of funds from one account to another in QuickBooks Accountant, just open
up one of the accounts, record the payment or deposit, and then place the other account name in
the account section of the transaction listing.
3. From the Vendors section of the home page, click the Vendors button, double-click the vendor
name, click the Additional Information tab, and then change terms from the drop-down list of
terms.
4. The standard payment terms include 1% 10 net 30, 2% 10 net 30, Consignment, Due on receipt, net
15, net 30, and net 60.
5. QuickBooks Accountant defaults to the accrual basis of accounting in which revenue is recognized
when a product is delivered or a service performed.
6. The Receive Inventory icon.
7. If the customer name already exists in your QuickBooks Accountant file, then you
(a) add a job name,
(b) enter time for an employee charging that time to a particular job name, and then
(c) create an invoice, using the Time/Costs button to assign time charged to a particular job
name. If the customer doesn’t currently exist in QuickBooks Accountant, you would of course
have to add a new customer first.
8. Whenever you enter a bill with a vendor name that is not part of the vendor list, QuickBooks
Accountant prompts you with a Vendor Not Found window. In this window, you can either quickly

111
112 Chapter 8

add this vendor or go through the regular setup process to add the vendor and all related
information.
9. Click the Pay Sales Tax icon from the home page, type the check date, type the Show sales tax due
through dates, type the starting check number, check the taxes you want to pay, and then click
OK.
10. Noncash investing and financing activities are standard investing and financing activities such as
capital contributions of non-cash assets, purchasing a long-term asset with borrowing, and
repayment of borrowing with no cash inflow or outflow. These types of transactions are usually
recorded in the QuickBooks Accountant accounting system using registers or journal entry
transactions.

CHAPTER 8 MATCHING

f Sales to a customer for which the company allows some time for the invoice to be paid.

h Used on invoices to specify how previous payments made by customers should be applied to an
invoice.

g A source document used to record sales on account.

a A schedule of the payments, including interest and principal, that are required to pay down a loan.

e Purchases from a supplier who allows the purchaser some time to pay the bill.

i Liabilities created when a company sells merchandise and collects sales taxes from a customer.

c Specify the discount, if any, and amount of time that customers have to pay an invoice.

b Used to move amounts from one bank account to another.

j Liabilities created when payroll taxes are withheld from an employee’s paycheck.

d Specify the discount, if any, and amount of time that companies have to pay a bill.
Chapter 8 113

CHAPTER 8 EXERCISES

1.
114 Chapter 8

2.
Chapter 8 115

3.
116 Chapter 8

4.
Chapter 8 117
118 Chapter 8

CHAPTER 8 ASSIGNMENTS

1. Adding More Information to Wild Water Sports

a.

b.
Chapter 8 119

c.
120 Chapter 8

d.
Chapter 8 121

e.
122 Chapter 8

f.
Chapter 8 123

2. Adding More Information: Central Coast Cellular

a.
124 Chapter 8

b.
Chapter 8 125

c.
126 Chapter 8

3. Adding More Information to Santa Barbara Sailing

a.
Chapter 8 127

b.
128 Chapter 8

c.
Chapter 8 129

d.
130 Chapter 8

CHAPTER 8 CASE PROBLEM 1: FOREVER YOUNG

1.
Chapter 8 131

2.
132 Chapter 8

3.
Chapter 8 133

4.
134 Chapter 8

5.

6.
Forever Young Ch 8
Chapter 8 135

CHAPTER 8 CASE PROBLEM 2: OCEAN VIEW FLOWERS

1.
136 Chapter 8

2.
Chapter 8 137

3.
138 Chapter 8

4.
Chapter 8 139

CHAPTER 8 CASE PROBLEM 3: ALOHA PROPERTIES

1.

Investments
140 Chapter 8

2.

3.
Chapter 8 141

4.