Concept explainers
Types of Events
For each of the following events, identify whether it is an external event that would be recorded as a transaction (E), an internal event that would be recorded as a transaction (I), or not recorded (NR).
________________ 1. A vendor for a company’s supplies is paid an amount owed on account.
________________ 2. A customer pays its open account.
________________ 3. A new chief executive officer is hired.
________________ 4. The biweekly payroll is paid.
________________ 5.
________________ 6. A new advertising agency is hired to develop a series of newspaper ads for the company.
________________ 7. The advertising bill for the first month is paid.
________________ 8. The accountant determines the federal income taxes owed based on the income for the period.
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Financial Accounting: The Impact on Decision Makers
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