True or False A transaction is any event that has a financial impact on a company. An account balance is the monetary amount attributed to an account 8 10 . 2. An accounts payable represents the amount of money to be received in the 3. resulting from the sale of a product or service. An increase in expenses will decrease retained sarnings. 5. Examples of accrued expenses include salary. rent, and interest. 6. A company must recognize each accrued expense as it is incurred Under the perpetual method, the sale of inventory involves two transactions. The Hampstone Company buys 20,000 pieces of inventory (all identical) for $70.00 or $3.50 per unit. The company sells 20.000 units of this inventory for $5 each in cash. The company should increase cash for $100,000. decrease inventory for $70,000, and increas a gain for $30,000. 9. The Spitz Company buys 20.000 pieces of inventory (all Identical) for $70,000. $350 per unit. The company sells 8,000 units of this inventory for $5 each in cash. The amount gross profit to be recognized this year will be $12,000. . Assume the Torres Company buys inventory for $5,000. It then sells 30 percent of the inventory for $7.500. The amount of gross profit to be recognized this year will be $2,500. 11. The ancient Egyptians invented double-entry bookkeeping 12. Double-entry bookkeeping has been in use for over five hundred years. 13. The four steps of the accounting process in order are: Analyze, Record, Report, and Adjust. 14. T-accounts accumulate the individual transaction amounts for each account, providing a place for each balance to be monitored. 15. The balance of an expense account is increased with a credit. 16. Debits and credits must be equal for every transaction 17. A list of all recorded journal entries is recorded in the ledger, which is maintained by a company 18. A fisting of the account balances found in the ledger is known as a trial balance. 19. Revenue may not be recorded until cash is collected. 20. Assume a company buys inventory for $3,000 on credit. It then spends $400 on adver tising in order to sell it for $9,000. Of that amount, it collects $5,000 immediately and we