Page 114 - Accounting Principles (A Business Perspective)

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c. What would you do if you were Larry? Describe in detail.
d. What do you think the real Larry did? Describe in detail.
Group project E In teams of two or three students, interview in person or by speakerphone a new staff

member who has worked for a CPA firm for only one or two years. Seek information on the advantages and
disadvantages of working for a CPA firm. Also, inquire about the nature of the work and the training programs
offered by the firm for new employees. As a team, write a memorandum to the instructor summarizing the results of
the interview. The heading of the memorandum should contain the date, to whom it is written, from whom, and the
subject matter.
Group project F With one or two other students and using library resources, write a report on the life of Luca
Pacioli, sometimes referred to as the father of accounting. Pacioli was a Franciscan monk who wrote a book on

double-entry accounting in 1494. Be careful to cite sources and treat direct quotes properly. (If you do not know
how to do this, ask your instructor.)
Using the Internet—A view of the real world
Visit the following website:
http://www.roberthalf.com
Click on Job Seekers. Read the information and write a memo to your instructor about your search and what you

learned about certain jobs in accounting.
Visit the following website:
http://www.sec.gov
Investigate this site for anything of interest. Write a memo to your instructor about your search.

Answers to self-test
True-false
False. Only the last five steps are performed at the end of the period. The first three steps are performed
throughout the accounting period.
True. The journal is the book of original entry. Any amounts appearing in a ledger account must have been
posted from the journal.
False. The left side of any account is the debit side.
False. These accounts are all increased by credits.
True. Since dividends reduce stockholders' equity, the Dividends account is increased by debits.

False. An entire journal entry may not have been posted, or a debit or credit might have been posted to the
wrong account.
Multiple-choice
c. An asset, Cash, is increased by a debit, and the Capital Stock account is increased by a credit.
b. Since the insurance covers more than the current accounting period, an asset is debited instead of an expense.
The credit is to Cash.
a. The receipt of cash before services are performed creates a liability, Unearned Delivery Fees. To increase a

liability, it is credited. Cash is debited to increase its balance.
b. Cash is increased by the debit, and Delivery Service Revenue is increased by the credit.
c. Dividends is increased by the debit, and Cash is decreased by the credit.

Accounting Principles: A Business Perspective 115 A Global Text