2. An account is record in an accounting system where increases and decreases in a specific asset, liability, or equity item are recorded and stored 3. All receivables are classified as liability accounts and all pay ables are classified as asset accounts 4. Making revising entries is an optional step in the accounting cycle 5. Recording sales discounts and sales returns and allowances separ ately form sales gives useful information to managers for internal monitoring and decision making 6. During the accounting period, the assets increased by $4, 000 and the equity increased by $1,000. For the balance sheet equation to balance, the liabilities must increase by $5,000 7. Straight-line method of interest allocation is a method of amortization that allocates an equal amount of interest to each accounting period in the life of bonds 8. A shares investment is classified as a long-term investment if it is not marketable or, if marketable. it is not held as an available source of cash to meet the needs of current operations 9. Data from one or more direct competitors of the company under analysis are usually preferred for developing standards for comparisons 10. An investor need only use the dividend yield as a measure to evaluate the profitability of alternative share investments Part Il Multiple Choices (102.5=25 points) 1. Recording of financial transactions and events manually or electronically is a process a)bookkeeping b)information technology c)reporting d)auditing 2. The personal portable phone bill of James Bond, the owner of Double Zero Seven Company, was paid by issuing a check from the company' s checking account. No business calls had been made from James' personal potable phone. What account must be debited for this transaction a)James Bond, Capital2. An account is record in an accounting system where increases and decreases in a specific asset, liability, or equity item are recorded and stored. 3. All receivables are classified as liability accounts and all payables are classified as asset accounts. 4. Making revising entries is an optional step in the accounting cycle.. 5. Recording sales discounts and sales returns and allowances separately form sales gives useful information to managers for internal monitoring and decision making. 6. During the accounting period, the assets increased by $4,000 and the equity increased by $1,000. For the balance sheet equation to balance, the liabilities must increase by $5,000. 7. Straight-line method of interest allocation is a method of amortization that allocates an equal amount of interest to each accounting period in the life of bonds. 8. A shares investment is classified as a long-term investment if it is not marketable or, if marketable, it is not held as an available source of cash to meet the needs of current operations. 9. Data from one or more direct competitors of the company under analysis are usually preferred for developing standards for comparisons 10. An investor need only use the dividend yield as a measure to evaluate the profitability of alternative share investments. Part III: Multiple Choices (10*2.5= 25 points) 1. Recording of financial transactions and events manually or electronically is a process of: a) bookkeeping b) information technology c) reporting d) auditing 2. The personal portable phone bill of James Bond, the owner of Double Zero Seven Company, was paid by issuing a check from the company’s checking account. No business calls had been made from James’ personal potable phone. What account must be debited for this transaction? a) James Bond, Capital