Professional Documents
Culture Documents
https://testbankfan.com/download/financial-accounting-canadian-2nd-edition-waybrig
ht-solutions-manual/
ACCOUNTING PRACTICE
Discussion Questions: Key Points
1. Assets are listed in order of liquidity, or closeness to cash.
2. When the company pays for something in advance that won’t be used up in this accounting
period, it would record a prepaid asset. In a sense, plant assets are a type of prepaid asset,
although it would not be classified as such. All prepaid assets would be used up, eventually.
That is, they all become expenses over time or with use. An example would be Prepaid Rent,
Prepaid Insurance, etc.
3. Revenue increases retained earnings. By definition, when revenue is increased as assets are
acquired (or liabilities reduced) as a result of activities relating to the company’s line of
business, the owners have a claim on those assets that are acquired. This ownership interest is
reflected in the Retained Earnings account.
4. Not all events are transactions. A transaction is an event that has a financial impact on a
company. In other words a transaction affects at least two accounts in the accounting
equation. If no accounts are affected then it is an event, not a transaction. Journal entries are
recorded for all transactions.
5. The normal balance of an account is the side that increases the account.
a. Debit
b. Debit
c. Credit
d. Credit
e. Debit
6. The bank is keeping its own books, not yours. When you give the bank cash or deposit your
paycheque, the bank needs to keep track of its liability to you. It is increasing its liability
account with a credit (the debit that it makes is to its own cash account).
7. A credit balance in the Cash account would indicate a negative cash balance. Negative cash
does not make sense. If a company overdraws its Cash account, it now has a liability to the
bank. Rather than showing a credit balance in its Cash account, it should show a credit
balance in a liability account. Sometimes, a negative “credit” cash balance is acceptable in
case the company had signed an overdraft agreement with its bank. Interest is usually
charged in such case on the amount overdrawn.
8. Journalizing is the process of recording a transaction in the journal. Posting is the process of
transferring the information from the journal to the appropriate amounts in the ledger or to t-
accounts.
9. False. A balanced trial balance is a necessary but not sufficient condition for accurate
financial statements. If a debit to Supplies is improperly recorded as a debit to Supplies
Expense, for example, the trial balance will balance but the financial statements will be
inaccurate.
10. The financial statement numbers generally come from the trial balance. However, the
numbers on the trial balance come from the general ledger. So, the numbers on the trial
balance really come from the general ledger.
2. c
3. e
4. g
5. d
6. f
7. a
1. Accounts Payable L
2. Cash A
3. Service Revenue R
4. Prepaid Rent A
5. Rent Expense E
6. Common Shares SE
1. R, 4
2. SE, 3
3. A, 1
4. E, 5
5. L, 2
6. SE, 3
7. E, 5
CR 2. Accounts Payable
CR 3. Service Revenue
DR 4. Office Furniture
CR 5. Common Shares
DR 6. Land
DR 7. Dividends
Cereal-gods, 12
Cosmogony, 36–64
[Contents]
Day-gods, 362–3
[Contents]
[Contents]
[Contents]
H
[Contents]
Interpretative Codices, 8
Itztli, 336–7
[Contents]
[Contents]
Monachism in Mexico, 9, 10
Nagualism, 18
Nahuatl language, 2
Nanahuatzin, a deity, 43
[Contents]
Omacatl, 352–3
[Contents]
P
[Contents]
[Contents]
[Contents]
[Contents]
Tecciztecatl, a moon-god, 43
Tonalamatl, the, a book of fate and fortune. See Appendix, 359 ff.;
nature of, 359–60;
day-signs of, 360–1;
in tabular form, 361–2;
day-gods of, 362–3;
gods of the “weeks,” 363;
“Lords of the Night,” or Acompañados, in, 364;
lords of the day-hours in, 365;
festivals included in the, 366;
recapitulation of information regarding the, 366;
solar calendar and the, 367;
names of the years, 368;
the calendar-round, 368–9;
the nemontemi, 369–70;
Venus period and the, 370;
bibliography of the, 373
Totemism, 17–18
[Contents]
[Contents]
[Contents]
[Contents]
[Contents]
[Contents]
This eBook is for the use of anyone anywhere at no cost and with almost no
restrictions whatsoever. You may copy it, give it away or re-use it under the terms
of the Project Gutenberg License included with this eBook or online at
www.gutenberg.org ↗️.
Metadata
Revision History
2023-07-23 Started.
Corrections
1.D. The copyright laws of the place where you are located also
govern what you can do with this work. Copyright laws in most
countries are in a constant state of change. If you are outside
the United States, check the laws of your country in addition to
the terms of this agreement before downloading, copying,
displaying, performing, distributing or creating derivative works
based on this work or any other Project Gutenberg™ work. The
Foundation makes no representations concerning the copyright
status of any work in any country other than the United States.
1.E.6. You may convert to and distribute this work in any binary,
compressed, marked up, nonproprietary or proprietary form,
including any word processing or hypertext form. However, if
you provide access to or distribute copies of a Project
Gutenberg™ work in a format other than “Plain Vanilla ASCII” or
other format used in the official version posted on the official
Project Gutenberg™ website (www.gutenberg.org), you must, at
no additional cost, fee or expense to the user, provide a copy, a
means of exporting a copy, or a means of obtaining a copy upon
request, of the work in its original “Plain Vanilla ASCII” or other
form. Any alternate format must include the full Project
Gutenberg™ License as specified in paragraph 1.E.1.
• You pay a royalty fee of 20% of the gross profits you derive from
the use of Project Gutenberg™ works calculated using the
method you already use to calculate your applicable taxes. The
fee is owed to the owner of the Project Gutenberg™ trademark,
but he has agreed to donate royalties under this paragraph to
the Project Gutenberg Literary Archive Foundation. Royalty
payments must be paid within 60 days following each date on
which you prepare (or are legally required to prepare) your
periodic tax returns. Royalty payments should be clearly marked
as such and sent to the Project Gutenberg Literary Archive
Foundation at the address specified in Section 4, “Information
about donations to the Project Gutenberg Literary Archive
Foundation.”
• You comply with all other terms of this agreement for free
distribution of Project Gutenberg™ works.
1.F.