Several events are listed below. Indicate whether each event is an external event that should be recorded as a transaction, an internal event which should be recorded as a transaction, or an event which should not be recorded. Use the following identification codes for your answers E - External event to be recorded as a transaction I - Internal event to be recorded as a transaction NR - An event

Question

which should NOT be recorded _____ A) An order is placed with a supplier for merchandise. _____ B) Common stock is issued to investors. _____ C) Cash sales are made. _____ D) Raw materials are entered into production. _____ E) Federal income tax returns are prepared by the company's accountant. _____ F) Bills are received for utility expenses. _____ G) Payment is received from customers to whom merchandise had been sold on credit. _____ H) Money collected from cash and credit customers is deposited in the company's checking account at a local bank.
Fill in the blank(s) with correct word

Answer 1

NR A) An order is placed with a supplier for merchandise.

E B) Common stock is issued to investors.

E C) Cash sales are made.

I D) Raw materials are entered into production.

NR E) Federal income tax returns are prepared by the company's accountant.

E F) Bills are received for utility expenses.

E G) Payment is received from customers to whom merchandise had been sold on credit.

E H) Money collected from cash and credit customers is deposited in the company's checking account at a local bank.