A transaction that credits an asset account and credits a liability account must also affect one or more other accounts.

The revenue recognition principle is the basis for making adjusting entries that pertain to unearned and accrued revenues.

If a company uses $1,300 of its cash to purchase supplies, the effect on the accounting equation would be:

The cash basis of accounting recognizes revenues when cash payments from customers are received.

To include the personal assets and transactions of a business’s stockholders in the records and reports of the business would be in conflict with the:

A company’s balance sheet shows: cash $22,000, accounts receivable $16,000, office equipment $50,000, and accounts payable $17,000. What is the amount of stockholders’ equity?

An adjusting entry could be made for each of the following except:

A company’s chart of accounts is a list of all the accounts used and includes an identification number assigned to each account.

Frank Mockus is paid on a monthly basis. For the month of January of the current year, he earned a total of $5,210. FICA tax for Social Security is 6.2% on the first $118,500 of earnings each calendar year and the FICA tax for Medicare is 1.45% of all earnings. The FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee’s pay. The amount of Federal Income Tax withheld from his earnings was $885.70. What is the amount of the employer’s payroll taxes expenses for this employee?

A note that the maker is unable or refuses to pay at maturity is called a dishonored note.