please show the step to solutions as possible as you can 18. On March 1, 2014, F
ID: 2540819 • Letter: P
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please show the step to solutions as possible as you can
18. On March 1, 2014, Freeze Company hires a new employee who will start to work on March 6. The employee will be paid on the last day of each month Should a journal entry be made on March 6? Why or why not? a. Yes, the company is now obligated to pay the employee, thus that event must be recorded. b. No, hiring an employee is an important event; however it is not an economic event that should be recorded. Yes, failure to record the event would cause the financial statements to be misleading. d. c. No, the financial position of the company has been changed, however, the dollar amount of the transaction is not yet lmown. 19. A debit to an asset account indicates a(n) a effor b. credit was made to a liability account. c. decrease in the asset. d. increase in the asset. 20. Debits increase both assets and liabilities. b. decrease both assets and liabilities c. increase assets and decrease liabilities d. decrease assets and increase liabilities. 21. Which of the following correctly identifies normal balances of accounts? Debit Credit Credit Debit Credit a. Assets Liabilities Common Stock b. Assets Liabilities Common Stock Revenues Debit Credit Credit Credit Credit c. Assets Credit Debit Debit Credit Debit Liabilities Common Stock d. Assets Debit Credit Credit Credit Debit Liabilities Common StockExplanation / Answer
Ans)
18) option (b)
19) option (d) increase in asset
20) Option (c) increase assets and decrease liabilities
21) option (d)
Assets - debit
liabilities - credit
common stock - credit
revenues - credit
expenses - debit
22) option (b) 300 debit balance
1200 - 900 = 300
23) option (A)
24) option (D)
25) option (d)
26) option (b)
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