Presented Below Are a List of Source Documents and a List

question 112

Essay

Presented below are a list of source documents and a list of transactions.Using the identification letters before each source document, indicate next to each transaction which source document serves as evidence for the recording of the transaction. A) Purchase invoice
B) Salesinvoice
C) Cash register tape
D) Check
E) Time card
F) Monthly statement
G) Promissory note
H) Stock certificate
Transactions
___    (1) Supplies are purchased on credit.
___    (2) Cash sales are made to customers.
___    (3) Land is acquired by signing an agreement to pay a stated amount plus interest in one year.
___    (4) Utilities expense is recorded for the current month.
___    (5) The weekly payroll is paid.
___    (6) Merchandise is sold to a customer on account.
___    (7) Payment is made for utility bills which were recorded earlier.
___    (8) Investors purchase additional shares of the company's stock directly from the company.

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Definitions:

Interest on Loans

The cost paid by a borrower to a lender for the use of borrowed money, typically expressed as an annual percentage rate.

Direct Method

A cash flow statement preparation method that lists specific cash inflows and outflows relating directly to operations.

Inventory Increase

Occurs when the ending inventory is greater than the beginning inventory, reflecting a net addition to stock through purchases or production.

Accounts Payable

Short-term liabilities of a business that are due to be paid to creditors within a specified period.