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For the following, match each financial statement with the accounts reported in it.

3.		Revenues and expenses.	A. Income statement
4.		Dividends.	B. Statement of stockholders'
5.		Assets and liabilities.	C. Balance sheet

For the following, match the appropriate accounting term or principle for the descriptions below.

		Accounting basis or Principle	Term
6.		The U.S. independent body that establishes financial accounting and reporting	A. Cashbasis
7.		The accounting basis that record revenues when earned and expenses with the related revenues.	B. Accrualbasis
8.		The rules of financial accounting.	C. Matching principle
9.		The accounting basis that records revenues when cash is received and records expenses	D. Revenuerecognition
10.		Recognize expenses in the same period as the revenues they help to generate.	E. GAAP
11.		Record revenue in the period in which we provide goods and services to customers.	F. FASB

12. The two categories of stockholders' equity usually found in the balance sheet of a corporation are:

Common stock and liabilities.

Assets and liabilities.

Common stock and retained earnings.

Revenues and expenses.

For the following, match each account classification with its example.

13.		Resources of the company.	A. Liabilities
14.		Creditors claim to resources.	B. Revenues
15.		Common stock issued to investors.	C. Dividends
16.		Payments made to stockholders.	D. Stockholders'
17.		Sales of products or services.	E. Assets
18.		Costs of selling products or services.	F. Expenses

For the following:

Indicate the account classifications: asset, liability, stockholders' equity, revenue, or expense.

Indicate the normal balance of the account: debit or credit.

	Account Classification	Normal Balance	Account
19.			Utilities Expense
20.			Prepaid Rent
21.			Salaries Payable
22.			Service Revenue
23.			Land
24.			Salaries Expense
25.			Accounts Payable
26.			Common Stock
27.			Accounts Receivable
28.			Deferred Revenue

Below are account balances for Huffman Corporation at the end of December.

Accounts	Balance
Cash	$ 5,200
Salaries expense	2,300
Retained earnings	2,500
Advertising expense	1,200
Equipment	12,400
Service revenue	9,400
Common stock	7,000
Accounts payable	2,200
Wages Expense	11,000

Compute Net Income: _______________________

A company received a $400 bill for newspaper advertising services performed earlier this month. The bill will be paid in 10 days. How would the transaction be recorded today?

Debit Advertising Expense $400, credit Accounts Payable $400.

Debit Accounts Payable $400, credit Advertising Expense $400.

Debit Accounts Payable $400, credit Cash $400.

Debit Advertising Expense $400, credit Cash $400.

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