Question

1. which of the following statements is true? a. only the effects of internal transactions must be recognized and recorded in the entitys accounting system. b. an internal event is a transaction between an entity and its environment. c. not all recognizable events are supported by a standard source document. d. only the effects of external events must be recognized, measured, and recorded in an entitys accounting system. monaco & associates use the following five transactions for monaco & associates, inc. to answer the question(s). october 1 bills are sent to clients for services provided in september in the amount of $800. 9 dravo co. delivers office furniture ($1,060) and office supplies ($160) to monaco leaving an invoice for $1,220. 15 payment is made to dravo co. for the furniture and office supplies delivered on october 9. 23 a bill for $430 for electricity for the month of september is received and will be paid on its due date in november. 31 salaries of $850 are paid to employees. 30. see the transactions to monaco & associates. the journal entry to record the october 1 transaction will include a debit of $800 to a. sales revenue b. accounts receivable c. cash d. retained earnings

Explanation:

For question 29:

• Option a is incorrect as both internal and external transactions must be recognized and recorded.
• Option b correctly defines an internal event.
• Option c is incorrect as recognizable events should generally be supported by source documents.
• Option d is incorrect as both internal and external events are recognized, measured and recorded.

For question 30: When bills are sent to clients for services provided, it creates an accounts - receivable as the company has earned revenue but not yet received cash. So a debit to Accounts Receivable is made.

Answer:

1. b. An internal event is a transaction between an entity and its environment.
2. b. Accounts Receivable