Internal events take place within the company, and external events take place outside the company. These events may or may not affect the accounts of the business. Hence each event is analysed to check whether it affects the accounts of the company. To identify: Eventis recorded as internal event, external event and not recorded.

Question

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Answer 1

Question

Chapter 3, Problem 3.1E

To determine

Concept Introduction:

Internal events take place within the company, and external events take place outside the company. These events may or may not affect the accounts of the business. Hence each event is analysed to check whether it affects the accounts of the company.

To identify: Eventis recorded as internal event, external event and not recorded.

Expert Solution & Answer

Explanation of Solution

1. A vendor for a company’s supplies is paid an amount owed on account.	(E) It is an external event because it includes a vendor that is an outsider to an organization. It is recorded in the accounts to record the payment made.
2. A customer pays its open account.	(E) It is an external event because it includes a customer that is an outsider to an organization. The event is recorded in the accounts to record the receipt from the customer.
3. A new chief executive officer is hired.	(NR) This is not a business transaction. This is just a business activity hence it is not recorded in the accounts.
4. The biweekly payroll is paid	(I) Payment of payroll is an internal event. This transaction is recorded in the accounts.
5. Depreciation on equipment is recognized.	(I) Depreciation is recorded on the assets of the business; hence it is an internal event. The event is recorded in the accounts to record the depreciation expense.
6. A new advertising agency is hired to develop a series of newspaper ads for the company.	(NR) Hiring an advertising agency does not indicate monetary business transaction. Hence it is not recorded in the accounts.
7. The advertising bill for the first month is paid.	(E) Payment of advertising bill is an external event. It is recorded in the books to record the expense.
8. The accountant determines the federal income taxes owed based on the income for the period.	(NR) Not recorded as the transaction. It is not recorded in books because it does not affect any account.

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Answer 2

Question

Chapter 3, Problem 3.1E

To determine

Concept Introduction:

Internal events take place within the company, and external events take place outside the company. These events may or may not affect the accounts of the business. Hence each event is analysed to check whether it affects the accounts of the company.

To identify: Eventis recorded as internal event, external event and not recorded.

Expert Solution & Answer

Explanation of Solution

1. A vendor for a company’s supplies is paid an amount owed on account.	(E) It is an external event because it includes a vendor that is an outsider to an organization. It is recorded in the accounts to record the payment made.
2. A customer pays its open account.	(E) It is an external event because it includes a customer that is an outsider to an organization. The event is recorded in the accounts to record the receipt from the customer.
3. A new chief executive officer is hired.	(NR) This is not a business transaction. This is just a business activity hence it is not recorded in the accounts.
4. The biweekly payroll is paid	(I) Payment of payroll is an internal event. This transaction is recorded in the accounts.
5. Depreciation on equipment is recognized.	(I) Depreciation is recorded on the assets of the business; hence it is an internal event. The event is recorded in the accounts to record the depreciation expense.
6. A new advertising agency is hired to develop a series of newspaper ads for the company.	(NR) Hiring an advertising agency does not indicate monetary business transaction. Hence it is not recorded in the accounts.
7. The advertising bill for the first month is paid.	(E) Payment of advertising bill is an external event. It is recorded in the books to record the expense.
8. The accountant determines the federal income taxes owed based on the income for the period.	(NR) Not recorded as the transaction. It is not recorded in books because it does not affect any account.

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Answer 3

Question

Chapter 3, Problem 3.1E

To determine

Concept Introduction:

Internal events take place within the company, and external events take place outside the company. These events may or may not affect the accounts of the business. Hence each event is analysed to check whether it affects the accounts of the company.

To identify: Eventis recorded as internal event, external event and not recorded.

Expert Solution & Answer

Explanation of Solution

1. A vendor for a company’s supplies is paid an amount owed on account.	(E) It is an external event because it includes a vendor that is an outsider to an organization. It is recorded in the accounts to record the payment made.
2. A customer pays its open account.	(E) It is an external event because it includes a customer that is an outsider to an organization. The event is recorded in the accounts to record the receipt from the customer.
3. A new chief executive officer is hired.	(NR) This is not a business transaction. This is just a business activity hence it is not recorded in the accounts.
4. The biweekly payroll is paid	(I) Payment of payroll is an internal event. This transaction is recorded in the accounts.
5. Depreciation on equipment is recognized.	(I) Depreciation is recorded on the assets of the business; hence it is an internal event. The event is recorded in the accounts to record the depreciation expense.
6. A new advertising agency is hired to develop a series of newspaper ads for the company.	(NR) Hiring an advertising agency does not indicate monetary business transaction. Hence it is not recorded in the accounts.
7. The advertising bill for the first month is paid.	(E) Payment of advertising bill is an external event. It is recorded in the books to record the expense.
8. The accountant determines the federal income taxes owed based on the income for the period.	(NR) Not recorded as the transaction. It is not recorded in books because it does not affect any account.

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Answer 4

Question

Chapter 3, Problem 3.1E

To determine

Concept Introduction:

Internal events take place within the company, and external events take place outside the company. These events may or may not affect the accounts of the business. Hence each event is analysed to check whether it affects the accounts of the company.

To identify: Eventis recorded as internal event, external event and not recorded.

Expert Solution & Answer

Explanation of Solution

1. A vendor for a company’s supplies is paid an amount owed on account.	(E) It is an external event because it includes a vendor that is an outsider to an organization. It is recorded in the accounts to record the payment made.
2. A customer pays its open account.	(E) It is an external event because it includes a customer that is an outsider to an organization. The event is recorded in the accounts to record the receipt from the customer.
3. A new chief executive officer is hired.	(NR) This is not a business transaction. This is just a business activity hence it is not recorded in the accounts.
4. The biweekly payroll is paid	(I) Payment of payroll is an internal event. This transaction is recorded in the accounts.
5. Depreciation on equipment is recognized.	(I) Depreciation is recorded on the assets of the business; hence it is an internal event. The event is recorded in the accounts to record the depreciation expense.
6. A new advertising agency is hired to develop a series of newspaper ads for the company.	(NR) Hiring an advertising agency does not indicate monetary business transaction. Hence it is not recorded in the accounts.
7. The advertising bill for the first month is paid.	(E) Payment of advertising bill is an external event. It is recorded in the books to record the expense.
8. The accountant determines the federal income taxes owed based on the income for the period.	(NR) Not recorded as the transaction. It is not recorded in books because it does not affect any account.

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Answer 5

Chapter 3, Problem 3.1E

To determine

Concept Introduction:

Internal events take place within the company, and external events take place outside the company. These events may or may not affect the accounts of the business. Hence each event is analysed to check whether it affects the accounts of the company.

To identify: Eventis recorded as internal event, external event and not recorded.

Expert Solution & Answer

Explanation of Solution

1. A vendor for a company’s supplies is paid an amount owed on account.	(E) It is an external event because it includes a vendor that is an outsider to an organization. It is recorded in the accounts to record the payment made.
2. A customer pays its open account.	(E) It is an external event because it includes a customer that is an outsider to an organization. The event is recorded in the accounts to record the receipt from the customer.
3. A new chief executive officer is hired.	(NR) This is not a business transaction. This is just a business activity hence it is not recorded in the accounts.
4. The biweekly payroll is paid	(I) Payment of payroll is an internal event. This transaction is recorded in the accounts.
5. Depreciation on equipment is recognized.	(I) Depreciation is recorded on the assets of the business; hence it is an internal event. The event is recorded in the accounts to record the depreciation expense.
6. A new advertising agency is hired to develop a series of newspaper ads for the company.	(NR) Hiring an advertising agency does not indicate monetary business transaction. Hence it is not recorded in the accounts.
7. The advertising bill for the first month is paid.	(E) Payment of advertising bill is an external event. It is recorded in the books to record the expense.
8. The accountant determines the federal income taxes owed based on the income for the period.	(NR) Not recorded as the transaction. It is not recorded in books because it does not affect any account.

Answer 6

Chapter 3, Problem 3.1E

To determine

Concept Introduction:

Internal events take place within the company, and external events take place outside the company. These events may or may not affect the accounts of the business. Hence each event is analysed to check whether it affects the accounts of the company.

To identify: Eventis recorded as internal event, external event and not recorded.

Expert Solution & Answer

Explanation of Solution

1. A vendor for a company’s supplies is paid an amount owed on account.	(E) It is an external event because it includes a vendor that is an outsider to an organization. It is recorded in the accounts to record the payment made.
2. A customer pays its open account.	(E) It is an external event because it includes a customer that is an outsider to an organization. The event is recorded in the accounts to record the receipt from the customer.
3. A new chief executive officer is hired.	(NR) This is not a business transaction. This is just a business activity hence it is not recorded in the accounts.
4. The biweekly payroll is paid	(I) Payment of payroll is an internal event. This transaction is recorded in the accounts.
5. Depreciation on equipment is recognized.	(I) Depreciation is recorded on the assets of the business; hence it is an internal event. The event is recorded in the accounts to record the depreciation expense.
6. A new advertising agency is hired to develop a series of newspaper ads for the company.	(NR) Hiring an advertising agency does not indicate monetary business transaction. Hence it is not recorded in the accounts.
7. The advertising bill for the first month is paid.	(E) Payment of advertising bill is an external event. It is recorded in the books to record the expense.
8. The accountant determines the federal income taxes owed based on the income for the period.	(NR) Not recorded as the transaction. It is not recorded in books because it does not affect any account.

Answer 7

Chapter 3, Problem 3.1E

To determine

Concept Introduction:

Internal events take place within the company, and external events take place outside the company. These events may or may not affect the accounts of the business. Hence each event is analysed to check whether it affects the accounts of the company.

To identify: Eventis recorded as internal event, external event and not recorded.

Answer 8

Expert Solution & Answer

Explanation of Solution

1. A vendor for a company’s supplies is paid an amount owed on account.	(E) It is an external event because it includes a vendor that is an outsider to an organization. It is recorded in the accounts to record the payment made.
2. A customer pays its open account.	(E) It is an external event because it includes a customer that is an outsider to an organization. The event is recorded in the accounts to record the receipt from the customer.
3. A new chief executive officer is hired.	(NR) This is not a business transaction. This is just a business activity hence it is not recorded in the accounts.
4. The biweekly payroll is paid	(I) Payment of payroll is an internal event. This transaction is recorded in the accounts.
5. Depreciation on equipment is recognized.	(I) Depreciation is recorded on the assets of the business; hence it is an internal event. The event is recorded in the accounts to record the depreciation expense.
6. A new advertising agency is hired to develop a series of newspaper ads for the company.	(NR) Hiring an advertising agency does not indicate monetary business transaction. Hence it is not recorded in the accounts.
7. The advertising bill for the first month is paid.	(E) Payment of advertising bill is an external event. It is recorded in the books to record the expense.
8. The accountant determines the federal income taxes owed based on the income for the period.	(NR) Not recorded as the transaction. It is not recorded in books because it does not affect any account.