S-A E 233(Communication)
A classmate is considering dropping his accounting class because he cannot understand the rules of debits and credits.
a.Can the student be successful in the course without an understanding of the rules of debits and credits?
b.Explain the rules of debits and credits in a way that will help him understand them.
GAAP QUESTIONS
1.The expanded accounting equation under GAAP is as follows
a.Assets = Liabilities + Common Stock + Retained Earnings ? Dividends ? Revenues ? Expenses.
b.Assets = Liabilities + Common Stock + Retained Earnings ? Dividends + Revenues ? Expenses
c.Assets + Liabilities = Common Stock + Retained Earnings ? Dividends + Revenues ? Expenses
d.Assets = Liabilities + Common Stock ? Retained Earnings ? Dividends + Revenues ? Expenses
2.A trial balance
a.will not balance if a correct journal entry is posted twice.
b.proves that all transactions have been recorded.
c.proves that transactions are recorded correctly.
d.is the same under GAAP and IFRS.
3.One difference between GAAP and IFRS is that
a.the limitations of a trial balance are different between GAAP and IFRS.
b.IFRS uses more fair value measurement than GAAP.
c.GAAP uses a different posting process than IFRS.
d.IFRS uses accruals accounting concepts and GAAP uses primarily the cash basis of accounting.
4.The general policy for using proper currency signs (dollar, yen, pound, etc) is the same for both GAAP and this textbook. This policy is as follows
a.Currency signs are shown in trial balances and financial statements.
b.Currency signs are shown for all compound journal entries.
c.Currency signs are only shown in the trial balances.
d.Currency signs only appear ledgers and journal entries