Class Notes for Financial Accounting, 10th Edition

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1-1
Chapter 1: The Financial Statements
Learning Objectives
1. Explain why accounting is the language of business
2. Explain and apply underlying accounting concepts, assumptions, and principles
3. Apply the accounting equation to business organizations
4. Evaluate business operations through the financial statements
5. Construct financial statements and analyze the relationships among them
6. Evaluate business decisions ethically
Questions You Should Be Able To Answer
Learning Objective Question(s) Answer For practice
1. Explain why
accounting is
the language of
business
Why is accounting
considered the language of
business?
What are the ways
businesses can be
organized?
Accounting
communicates
economic
information. The
better you
understand
accounting, the
better you can
understand and
communicate in
business terms.
Proprietorship: sole
owner with personal
liability
Partnership: more
than one owner,
often with personal
liability
Corporation: more
than one owner, with
limited liability
S1-7, S1-8, S1-9
S1-3
2. Explain and
apply
underlying
concepts,
assumptions
and principles
of accounting
Explain the following
concepts, assumptions, and
principles:
(1) Entity assumption
(2) Continuity
assumption
(3) Historical cost
principle
(1) Each organization
is separate
(2) Entity will
remain in business
(3) Assets recorded
at actual cost
S1-4, S1-5,
S1-15

1-2
(4) Stable monetary
unit assumption
(4) Ignore effects of
inflation
3. Apply the
accounting
equation to
business
organizations
What is the fundamental
accounting equation?
What is:
(1) An asset?
(2) A liability?
(3) Stockholders’
(owners’) equity
What are some examples
of:
(1) Assets
(2) Liabilities
(3) Stockholders’
equity
(4) Revenue
(5) Expenses
Assets = Liabilities +
Stockholders’ Equity
(1) Economic
resources expected to
benefit the entity in
the future
(2) Economic
obligations, debts
(3) Claims held by
owners
Cash, accounts
receivable,
inventories, property
and equipment
Accounts payable,
notes payable
Common stock,
retained earnings
Sales, service
revenue
Cost of sales,
operating expenses
S1-1; S1-6
S1-8
S1-8
4. Evaluate
business
operations
through the
financial
statements
What information is shown
in the:
(1) Income statement
(2) Statement of
retained earnings
(3) Balance sheet
(4) Cash flow
statement
(1) Results of
operations (revenue –
expenses)
(2) What a company
did with its earnings
(3) Financial
position (assets =
liabilities +
stockholders’ equity)
(4) The sources of
cash inflow (receipts)
and outflow
(payments)
S1-7, S1-15

1-3
5. Construct
financial
statements and
analyze the
relationships
among them
What is the most logical
order of preparation of the
financial statements?
(1) Income
statement
(2) Statement of
retained earnings
(3) Balance sheet
(4) Statement of
cash flows
S1-10, S1-11,
S1-12, S1-13,
S1-14
6. Evaluate
business
decisions
ethically
What is the proper way to
evaluate business decisions
ethically?
(1) What is the
issue?
(2) Who are the
stakeholders?
(3) What are the
alternatives?
(4) What are the
consequences of the
decision?
S1-2
Chapter 1 Outline
I. Accounting – The Language of Business
A. Users of financial information
1. Individuals
2. Investors and creditors
3. Regulatory bodies
4. Nonprofit organizations
B. Financial accounting vs. management accounting
C. Organizing a business
1. Proprietorship
2. Partnership
3. Limited-liability company
4. Corporation
II. Underlying Accounting Concepts, Assumptions, and Principles
A. Financial Accounting Standards Board (FASB)/Generally Accepted
Accounting Principles (GAAP)
B. International Accounting Standards Board (IASB)/International Financial
Reporting Standard (IFRS)
C. Fundamental qualitative characteristics
1. Relevance
2. Faithful representation
D. Enhancing qualitative characteristics
1. Comparability
2. Verifiability

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1-4
3. Timeliness
4. Understandability
E. Cost/benefit
F. Entity assumption
G. Continuity (going-concern) assumption
H. Historical cost principle
I. Stable-monetary-unit assumption
III. Application of the Accounting Equation (Assets = Liabilities + Equity)
A. Assets – economic resources with future benefit
B. Liabilities – “outsider claims”
C. Owners’ equity – “insider claims”
1. Paid-in capital
2. Retained earnings
IV. Evaluate Business Operations Using the Financial Statements
A. The Income Statement (Revenues – Expenses = Net Income (Net Loss))
1. Revenues
2. Gains
3. Expenses
4. Losses
B. Statement of Retained Earnings (Beginning Retained Earnings + Net Income
– Dividends = Ending Retained Earnings)
C. Balance Sheet (Assets = Liabilities + Equity)
1. Assets
a. Current assets
b. Non-current assets
2. Liabilities
a. Current liabilities
b. Long-term liabilities
3. Stockholders’ equity
D. Statement of Cash Flows (Net cash flow from (Operating Activities + or –
Investing Activities + or – Financing Activities) + Beginning Cash balance =
Ending Cash balance)
V. Financial Statement Preparation and Analysis of Relationships Among Them
VI. Evaluate Business Decisions Ethically
A. The role of judgment
B. Economic factors
C. Legal factors
D. Ethical factors

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1-5
Chapter Activities
1. Chapter Opener
Chapter 1 spotlights The Gap, Inc. and details the products the corporation sells, its network of
stores, and financial information for the year ended January 28, 2012. Additionally, the section
introduces the terms “net sales” and “net income.” Discuss with the students the products that
The Gap sells and the prices related to those items. Visit www.gap.com and review pricing of
those particular products on the company’s website. Explain how these items, once sold, are
sales to the company. From the company’s website, you can also download the most current
annual report. Use this report to explain the flow of product sales to the financial statements, as
well as how that equates to net income.
Additionally, ask the students what information they would need from the financial statements if
they had $5,000 to invest. How would they decide if The Gap was a good investment?
2. Accounts Activity
On slips of paper, list accounts and distribute one slip of paper to each student. You can use the
following chart of accounts as an example:
Cash
Accounts Receivable
Inventory
Prepaid Rent
Office Supplies
Land
Automobiles
Buildings
Patents
Copyrights
Trademark
Accounts Payable
Income Taxes Payable
Interest Payable
Notes Payable
Salaries and Wages Payable
Bonds Payable
Common Stock
Retained Earnings
Sales Revenue
Interest Revenue
Rent Revenue

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1-6
Advertising Expense
Commissions Expense
Cost of Goods Sold
Depreciation Expense
Income Tax Expense
Insurance Expense
Interest Expense
Salary and Wage Expense
Supplies Expense
Dividends
Dividends Payable
Divide the room up into five areas: assets, liabilities, stockholders’ equity, revenues, and
expenses. Ask the students to move to their particular area of the room depending on what
account types they have been assigned. Quiz each student to confirm that he or she is in the
correct section of the room. Move the students accordingly if they are in the wrong section.
Repeat the exercise by dividing the room into a balance sheet section and an income statement
section. Again, quiz the students to confirm that they are in the correct area for that particular
financial statement and move them, if necessary.
Difficult Topics
• Statement of Cash Flows

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1-7
Chapter 1: Assignment Grid
(Will have an X if
available)
Assignment Topic(s) L.O. Estimated
Time
(minutes)
Level of
Difficulty
Excel
Templates
General
Ledger
Templates
S1-1 Apply the accounting
equation
3 5 Easy
S1-2 Evaluate business
decisions ethically
6 5 Easy
S1-3 Explain and differentiate
between business
organizations
1 10 Easy
S1-4 Explain underlying
accounting concepts,
assumptions, and
principles of accounting
2 5 Easy
S1-5 Apply underlying
accounting concepts,
assumptions, and
principles
2 5-10 Easy
S1-6 Apply the accounting
equation
3 5 Easy
S1-7 Explain accounting
language; evaluate
business operations
1,4 5 Easy
S1-8 Explain accounting
language
1 5-10 Easy
S1-9 Explain accounting
language
1 5 Easy
S1-10 Construct an income
statement
5 5 Easy
S1-11 Construct a statement of
retained earnings
5 5 Easy
S1-12 Construct a balance
sheet
5 10 Easy
S1-13 Construct a statement of
cash flows
5 10-15 Medium
S1-14 Explain accounting
language; construct
financial statements
1,5 10 Easy
S1-15 Apply accounting
concepts; evaluate
business activity
2,4 15-20 Easy

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1-8
Assignment Topic(s) L.O. Estimated
Time
(minutes)
Level of
Difficulty
Excel
Templates
General
Ledger
Templates
E1-16A Apply the accounting
equation; evaluate
business operations
3,4 10-15 Medium
E1-17A Apply the accounting
equation; evaluate
business operations
3,4 10-15 Medium
E1-18A Apply the accounting
equation; evaluate
business operations
3,4 10-20 Medium
E1-19A Identify financial
statement by type of
information
5 10-15 Medium
E1-20A Apply the accounting
equation; construct a
balance sheet
3,5 10-20 Medium
E1-21A Construct an income
statement and a
statement of retained
earnings
5 15-25 Medium
E1-22A Construct an income
statement and a
statement of retained
earnings
5 15-20 Medium X
E1-23A Construct a balance
sheet
5 15-20 Medium X
E1-24A Construct a statement of
cash flows
5 15-20 Medium
E1-25A Evaluate business
operations through the
financial statements
4 10-15 Medium
E1-26B Apply the accounting
equation; evaluate
business operations
3,4 10-15 Medium
E1-27B Apply the accounting
equation; evaluate
business operations
3,4 10-15 Medium
E1-28B Apply the accounting
equation; evaluate
business operations
3,4 10-20 Medium
E1-29B Identify financial
statement by type of
information
5 10-15 Medium

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1-9
Assignment Topic(s) L.O. Estimated
Time
(minutes)
Level of
Difficulty
Excel
Templates
General
Ledger
Templates
E1-30B Apply the accounting
equation; construct a
balance sheet
3,5 10-20 Medium
E1-31B Construct an income
statement and a
statement of retained
earnings
5 15-25 Medium X
E1-32B Construct an income
statement and a
statement of retained
earnings
5 15-20 Medium X
E1-33B Construct a balance
sheet
5 15-20 Medium
E1-34B Construct a statement of
cash flows
5 15-20 Medium
E1-35B Evaluate business
operations through the
financial statements
4 10-15 Difficult
Q1-36 to Q1-
50
Practice quiz questions All 10-20 Medium
P1-51A Apply the accounting
equation; evaluate
business operations
3,4 30 Medium
P1-52A Explain accounting
language; apply the
accounting equation;
evaluate business
operations; construct a
balance sheet
1,3,
4,5
20-25 Medium X
P1-53A Apply underlying
accounting concepts;
evaluate business
operations; construct a
balance sheet
2,4,5 20-25 Difficult
P1-54A Construct and analyze an
income statement, a
statement of retained
earnings, and a balance
sheet; evaluate business
operations
4,5 30-45 Medium X
P1-55A Construct a statement of
cash flows; evaluate
business operations
4,5 20 Medium

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1-10
Assignment Topic(s) L.O. Estimated
Time
(minutes)
Level of
Difficulty
Excel
Templates
General
Ledger
Templates
P1-56A Construct financial
statements
5 40-50 Medium
P1-57B Apply the accounting
equation; evaluate
business operations
3,4 30 Medium
P1-58B Explain accounting
language; apply the
accounting equation;
evaluate business
operations; construct a
balance sheet
1,3,
4,5
20-25 Medium X
P1-59B Apply underlying
accounting concepts;
evaluate business
operations; construct a
balance sheet
2,4,5 20-25 Difficult
P1-60B Construct and analyze an
income statement, a
statement of retained
earnings, and a balance
sheet; evaluate business
operations
4,5 30-45 Medium X
P1-61B Construct a statement of
cash flows; evaluate
business operations
4,5 20 Medium
P1-62B Construct financial
statements
5 40-50 Medium
Decision
Case 1
Explain accounting
language; evaluate
business operations
through financial
statements
1,4 30-40 Medium
Decision
Case 2
Correct errors; construct
financial statements;
evaluate business
operations through
financial statements
4,5 20-30 Medium
Ethical Issue Evaluate ethical
decisions
6 30-40 Medium
Focus on
Financials—
Amazon.com
Apply the accounting
equation; evaluate
business operations
3,4 20-30 Medium

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1-13
Name____________________________________ Date_________________
Section_______________
CHAPTER 1
10-MINUTE QUIZ
Circle the letter of the best response.
1. The equation for the Statement of Cash Flows is:
A. Net cash flow from (Operating Activities + or – Investing Activities + or – Financing
Activities) + Beginning Cash balance = Ending Cash balance
B. Net cash flow from (Operating Activities – Investing Activities – Financing
Activities) + Beginning Cash balance = Ending Cash balance
C. Net cash flow from (Operating Activities + Investing Activities + Financing
Activities) – Beginning Cash balance = Ending Cash balance
D. Net cash flow from (Operating Activities – Investing Activities + Financing
Activities) + Ending Cash balance = Beginning Cash balance
2. Which item is an asset?
A. Long-Term Debt
B. Accounts Payable
C. Accounts Receivable
D. Notes Payable
3. If total liabilities decreased by $75,000 and total assets decreased by $90,000 during the
same accounting time period, what happened to total owners’ equity during this period?
A. $15,000 increase
B. $15,000 decrease
C. $90,000 increase
D. $90,000 decrease
4. Assuming an entity will continue to operate long enough to sell its inventories and
convert any receivables to cash is:
A. Stable-monetary-unit assumption.
B. Entity assumption.
C. Continuity (going-concern) assumption.
D. Historical cost principle.
5. Which financial statement reports net income and dividends?
A. Income Statement
B. Statement of Retained Earnings
C. Balance Sheet
D. Statement of Cash Flows

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1-14
6. The __________________ states that assets should be recorded at their actual cost.
A. Stable-monetary-unit assumption
B. Continuity (going-concern) assumption
C. Entity assumption
D. Historical cost principle
7. Which financial statement reports revenues and expenses?
A. Income Statement
B. Statement of Retained Earnings
C. Balance Sheet
D. Statement of Cash Flows
8. Mr. Ronald Smith is the owner of a small business. He has decided to save money during
his initial years of operation by not hiring a professional accountant. He makes inflation
adjustments to accounting information to make it comparable over time. Which
accounting principle, concept, or assumption does this violate?
A. Stable-monetary-unit assumption
B. Continuity (going-concern) assumption
C. Entity assumption
D. Historical cost principle
9. Listed below are the account balances of the Arthur Frank Corporation:
Accounts Payable $ 75,000
Cash 100,000
Common Stock 500,000
Dividends 50,000
Land 60,000
Miscellaneous Expense 3,000
Service Revenue 250,000
Equipment 40,000
Note Payable due in 60 days 125,000
Long-Term Debt 13,000
Salary Expense 120,000
Total Liabilities are:
A. $100,000.
B. $338,000.
C. $278,000.
D. $213,000.

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2-1
Chapter 2: Transaction Analysis
Learning Objectives
1. Explain what a transaction is
2. Define “account” and list and differentiate between different types of accounts
3. Show the impact of business transactions on the accounting equation
4. Analyze the impact of business transactions on accounts
5. Record (journalize and post) transactions in the books
6. Construct and use a trial balance
Questions You Should Be Able To Answer
Learning Objective Question(s) Answer For practice
1. Explain what a
transaction is
What is a business
transaction?
A transaction is any
event that has a
financial impact on the
business and can be
measured reliably.
S2-3, S2-5
2. Define
“account,” and
list and
differentiate
between
different types
of accounts
What is an account?
Describe the following
accounts:
(1) Assets
(2) Liabilities
(3) Stockholders’
equity
(4) Revenues
An account, the basic
summary device of
accounting, is the
record of all the
changes in a particular
asset, liability, or
stockholders’ equity
during a period.
(1) Economic resources
that provide a future
benefit for a business
(2) Debts of the
business, due in cash or
goods/services
(3) The owners’ claims
to the assets of the
corporation, including
common stock and
retained earnings
(4) Increases in
stockholders’ equity
that result from
delivering goods or
services to customers
S2-1, S 2-12

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2-2
(5) Expenses
(6) Dividends
(5) Decreases in
stockholders’ equity
that result from costs of
operating a business
(6) Distributions to
shareholders, usually in
cash, from profitable
operations; dividends
decrease retained
earnings
3. Show the
impact of
business
transactions on
the accounting
equation
S2-4, S2-5,
S2-7
4. Analyze the
impact of
business
transactions on
accounts
What is the double-entry
system of accounting?
What is a T-account?
What are the rules of debit
and credit?
Every transaction
affects at least two
accounts
The letter, T; the name
of the account is written
on the top. Debit entries
are on the left side with
credit entries on the
right side of the T-
account.
Assets increase with a
debit and decrease with
a credit.
Liabilities and
stockholders’ equity
increase with a credit
and decrease with a
debit. (Note that the
rules are the opposite
on opposite sides of the
accounting equation.)
Revenues increase with
a credit and expenses
increase with a debit.
S2-4
S2-2, S2-3,
S2-13

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2-3
Dividends increase with
a debit. (Note that
revenues increase
retained earnings and
expenses and dividends
decrease retained
earnings.)
5. Record
(journalize and
post)
transactions in
the books
What is a journal?
What is the ledger?
What occurs during
posting?
A chronological record
of business
transactions; the first
place a transaction is
recorded
A grouping of the T-
accounts, along with
their balances
Transactions are posted
or copied from the
journal to the ledger
(always in that order).
A balance is calculated
for each account in the
ledger.
S2-6, S2-7,
S2-8
6. Construct and
use a trial
balance
What is a trial balance?
What does a trial balance
prove?
A list of all accounts
with their balances—
assets first, then
liabilities and
stockholders’ equity
(including revenue and
expense accounts).
Account balances are
listed in either the debit
column or the credit
column, and the
columns are totaled.
They should be equal.
That equal debits and
credits have been
recorded
S2-9, S2-10,
S2-11

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2-4
How can the trial balance
be used?
How can accounting errors
be detected?
To facilitate preparation
of financial statements
(although they will be
more accurate after
adjusting entries are
added in the next
chapter)
(1) Search for missing
amounts
(2) If the two columns
of the trial balance are
not equal, search for an
entry of that amount
(3) Divide the
difference between the
two columns by 9 to
determine if there is a
slide or transposition
error
Chapter 2 Outline
I. A Business Transaction
A. Any event that has a financial impact on the business and can be measured
reliably
B. Giving something
C. Receiving something in return
II. Account
A. Record of all the changes in a particular asset, liability, or stockholders’ equity
during a period
B. Categories
1. Assets (Examples: Cash, Accounts Receivable, Inventory)
2. Liabilities (Examples: Accounts Payable, Notes Payable, Accrued
Liabilities)
3. Stockholders’ (Owners’) Equity (Examples: Common Stock, Retained
Earnings, Dividends, Revenues, Expenses)
III. Transaction Examples
A. Impact on the accounting equation (the equation always stays in balance)
B. Impact on the financial statements
IV. Impact of Business Transactions on Accounts
A. Double-entry accounting system

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2-5
B. T-account:
ACCOUNT TITLE
Debit Credit
1. Debit – “left or left-hand side”
2. Credit – “right or right-hand side”
C. Rules of debit and credit
1. Debit – Increases in assets, expenses, and dividends; decreases in
liabilities, stockholders’ equity, and revenues
2. Credit – Increases in liabilities, stockholders’ equity, and revenues;
decreases in assets, expenses, and dividends
D. Balance = amount remaining in an account
E. Revenues (Examples: Sales Revenue, Legal Fees Earned, Service Revenue)
F. Expenses (Examples: Cost of Goods Sold, Salaries Expense, Utilities
Expense)
V. Record Transactions in the Books
A. Journal – A chronological record of transactions
B. Journalizing example:
Account and Explanation Debit Credit
Cash 50,000
Common Stock 50,000
Issued common stock
C. Ledger – Grouping of all the T-accounts, with their balances
D. Posting – Data must be copied from the journal to the ledger
E. Posting example:
Account and Explanation Debit Credit
Cash 50,000
Common Stock 50,000
Issued common stock
Cash Common Stock
50,000 50,000

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2-6
F. Flow of accounting data
VI. Construct and Use a Trial Balance
A. Analyzing accounts
B. Correcting accounting errors
C. Chart of accounts
D. Normal account balances:
E. Account formats
F. How to analyze transactions from T-accounts
Chapter Activities
1. Chapter Opener
Chapter 2 spotlights Whole Foods Market, Inc. and explains that the company is the world’s
leading retailer of natural and organically grown groceries. Have the students review Whole
Foods’ statement of operations at the company’s website (www.wholefoodsmarket.com.) and
discuss what items might make up the company’s net sales. Additionally, discuss the items that
could be included in the expense figures for the corporation. This could lead to a discussion
about how a company determines its net income or net loss.
2. Transactions Activity
Use the game Monopoly as an example of a business that would engage in transactions for a
particular period. Examples of transactions that a player of the game might encounter include:
1) Receive $1,500 in cash to be used as capital investment
2) Bank pays you a dividend of $50
3) Purchase Park Place for $35
Account Type
Normal
Balance Increase Decrease
Asset Debit Debit Credit
Liability Credit Credit Debit
Stockholders’
Equity Credit Credit Debit
Revenue Credit Credit Debit
Expense Debit Debit Credit
Common Stock Credit Credit Debit
Retained Earnings Credit Credit Debit
Dividends Debit Debit Credit

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2-7
4) Pay poor tax of $15
5) Purchase house for property on Park Place for $200
6) Pay rent on Baltic Avenue of $4
7) Receive for services $25
8) From sale of common stock, you get $45
9) Pay school tax of $150
10) Collect rent on Park Place of $175
11) Pay rent on Pennsylvania Railroad of $25
12) Pay Water Works $60
13) Mortgage Park Place for $175
Place the students into groups and use the chart of accounts below. Have the students put each of
the transactions in journal entry form.
Cash
Dividend Revenue
Common Stock
House
Investment Revenue
Land
Mortgage Payable
Rent Expense
Rent Revenue
Tax Expense
Service Revenue
Utilities Expense
Difficult Topics
• Rules of debit and credit

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2-8
Chapter 2: Assignment Grid
(Will have an X if
available)
Assignment Topic(s) L.O. Estimated
Time
(minutes)
Level of
Difficulty
Excel
Templates
General
Ledger
Templates
S2-1 Differentiate between
different types of
accounts
2 5 Easy
S2-2 Analyze the impact of
business transactions
on accounts
4 5 Easy
S2-3 Explain what a
transaction is; analyze
the impact of business
transactions on
accounts
1,4 5-10 Easy
S2-4 Show the impact of
business transactions
on the accounting
equation; Analyze the
impact of business
transactions on
accounts
3,4 5 Easy
S2-5 Explain what a
transaction is; show the
impact of business
transactions on the
accounting equation
1,3 5-10 Easy
S2-6 Record (journalize)
transactions
5 10 Medium
S2-7 Show the impact of
business transactions
on the accounting
equation; record
(journalize and post)
transactions in the
books
3,5 10-15 Easy
S2-8 Record (journalize and
post) transactions in
the books
5 10-15 Easy
S2-9 Construct and use a
trial balance
6 10 Medium X
S2-10 Use a trial balance 6 10 Easy X
S2-11 Use a trial balance 6 10 Medium

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2-9
Assignment Topic(s) L.O. Estimated
Time
(minutes)
Level of
Difficulty
Excel
Templates
General
Ledger
Templates
S2-12 Define accounting
terms
2 10 Medium
S2-13 Analyze the impact of
business transactions
on accounts
4 5 Medium
E2-14A Explain what a
transaction is; analyze
the impact of
transactions on
accounts
1,4 10-15 Easy
E2-15A Analyze the impact of
business transactions
on accounts
4 10-15 Easy
E2-16A Show the impact of
business transactions
on the accounting
equation
3 10-20 Medium
E2-17A Record (journalize)
transactions in the
books
5 10-15 Medium X
E2-18A Analyze the impact of
business transactions
on accounts; record
(post) transactions in
the books; construct
and use a trial balance
4,5,6 20-30 Easy
E2-19A Explain what a
transaction is; analyze
the impact of business
transactions on the
accounts; record
(journalize)
transactions
1,4,5 10-15 Medium
E2-20A Construct and use a
trial balance
6 10-20 Medium X
E2-21A Construct and use a
trial balance
6 15-25 Medium X
E2-22A Analyze the impact of
business transactions
on accounts
4 10-15 Medium

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2-10
Assignment Topic(s) L.O. Estimated
Time
(minutes)
Level of
Difficulty
Excel
Templates
General
Ledger
Templates
E2-23A Construct and use a
trial balance
6 10-20 Medium
E2-24B Explain what a
transaction is; analyze
the impact of
transactions on
accounts
1,4 10-15 Medium
E2-25B Analyze the impact of
transactions on
accounts
4 10-15 Easy
E2-26B Show the impact of
business transactions
on the accounting
equation
3 10-20 Medium
E2-27B Record (journalize)
transactions in the
books
5 10-20 Easy
E2-28B Analyze the impact of
business transactions
on accounts; record
(post) transactions in
the books; construct
and use a trial balance
4,5,6 20-30 Medium
E2-29B Explain what a
transaction is; analyze
the impact of business
transactions on
accounts; record
(journalize)
transactions in the
books
1,4,5 10-15 Medium
E2-30B Construct and use a
trial balance
6 10-20 Medium X
E2-31B Construct and use a
trial balance
6 15-25 Medium X
E2-32B Analyze the impact of
business transactions
on accounts
4 10-15 Medium
E2-33B Construct and use a
trial balance
6 10-20 Medium

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2-11
Assignment Topic(s) L.O. Estimated
Time
(minutes)
Level of
Difficulty
Excel
Templates
General
Ledger
Templates
E2-34 Explain what a
transaction is; analyze
the impact of business
transactions on
accounts; record
(journalize and post)
transactions in the
books; construct and
use a trial balance
1,4,
5,6
20-30 Medium
Q2-35 to
Q2-54
Quiz Exercises All 30-50 Medium
P2-55A Construct and use a
trial balance
6 15-30 Medium
P2-56A Show the impact of
business transactions
on the accounting
equation; analyze the
impact of business
transactions on
accounts
3,4 45-60 Medium
P2-57A Analyze the impact of
business transactions
on accounts; record
(journalize and post)
transactions in the
books
4,5 30-40 Medium
P2-58A Analyze the impact of
business transactions
on accounts; record
(journalize and post)
transactions in the
books; construct and
use a trial balance
4,5,6 50-60 Medium X
P2-59A Analyze the impact of
business transactions
on accounts; construct
and use a trial balance
4,6 40-50 Medium
P2-60B Construct and use a
trial balance
6 15-30 Medium

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2-12
Assignment Topic(s) L.O. Estimated
Time
(minutes)
Level of
Difficulty
Excel
Templates
General
Ledger
Templates
P2-61B Show the impact of
business transactions
on the accounting
equation; analyze the
impact of business
transactions on
accounts
3,4 45-60 Medium
P2-62B Analyze the impact of
business transactions
on accounts; record
(journalize and post)
transactions in the
books
4,5 30-40 Medium
P2-63B Analyze the impact of
business transactions
on accounts; record
(journalize and post)
transactions in the
books; construct and
use a trial balance
4,5,6 50-60 Medium
P2-64B Analyze the impact of
business transactions
on accounts; construct
and use a trial balance
4,6 40-50 Medium
E2-65 Analyze the impact of
business transactions
on accounts
4 20-40 Medium
E2-66 Analyze the impact of
business transactions
on accounts; construct
and use a trial balance
4,6 20-30 Medium
E2-67 Analyze the impact of
business transactions
on account
4 10-15 Medium
P2-68 Analyze the impact of
errors and compute
correct amounts
3,4,5 20 Medium

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2-13
Assignment Topic(s) L.O. Estimated
Time
(minutes)
Level of
Difficulty
Excel
Templates
General
Ledger
Templates
Decision
Case 1
Analyze the impact
of transactions on
business accounts;
construct and use a
trial balance; measure
net income or loss;
decide whether to
continue a business
4,6 40-50 Medium
Decision
Case 2
Analyze the impact
of transactions on
business accounts;
correct erroneous
financial statements;
decide whether to
expand a business
4 20-30 Medium
Ethical Issue
1
Scruffy’s Bar All 20-30 Medium
Ethical Issue
2
Academic Honesty All 20 Medium
Focus on
Financials-
Amazon.com
Record transactions;
compute net income
3,4 20-30 Medium
Focus on
Analysis-
Yum!
Brands, Inc.
Analyze financial
statements
4 20-30 Medium
Group
Project 1
Rock Concert All 45-60 Difficult
Group
Project 2
Local Business All 45-60 Difficult

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2-15
Name____________________________________ Date_________________
Section_______________
CHAPTER 2
10-MINUTE QUIZ
Circle the letter of the best response.
1. The journal is:
A. A listing of all open accounts and their balances.
B. A chronological record of transactions.
C. A listing of all accounts used to record the business transactions.
D. Not necessary to record transactions.
2. Which of the following accounts is decreased with a debit?
A. Accounts Payable
B. Equipment
C. Cash
D. Payroll Expense
3. Which of the following accounts is decreased with a credit?
A. Rent Revenue
B. Accounts Payable
C. Accounts Receivable
D. Service Revenue
4. The XYZ Company received $1,000 for a customer on account. The entry to record this
transaction is:
A. Cash 1,000
Accounts Payable 1,000
B. Cash 1,000
Accounts Payable 1,000
C. Accounts Receivable 1,000
Cash 1,000
D. Cash 1,000
Accounts Receivable 1,000
5. The ledger is:
A. A grouping of all T-accounts, with their balances.
B. An event that has an economic impact on the business.
C. Always expected to have a debit balance.
D. None of the above

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Class Notes for Financial Accounting, 10th Edition

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