Intermediate Accounting 18th Edition Stice Test Bank
Intermediate Accounting 18th Edition Stice Test Bank
Intermediate Accounting 18th Edition Stice Test Bank
MULTIPLE CHOICE
2. A common business transaction that would not affect the amount of owners' equity is
a. signing a note payable to purchase equipment.
b. payment of property taxes.
c. billing of customers for services rendered.
d. payment of dividends.
ANS: A PTS: 1 DIF: Medium OBJ: LO 2
TOP: AICPA FN-Measurement MSC: AACSB Analytic
3. Failure to record the expired amount of prepaid rent expense would not
a. understate expense.
b. overstate net income.
c. overstate owners' equity.
d. understate liabilities.
ANS: D PTS: 1 DIF: Medium OBJ: LO 3
TOP: AICPA FN-Measurement MSC: AACSB Analytic
4. On June 30, a company paid $3,600 for insurance premiums for the current year and debited the
amount to Prepaid Insurance. At December 31, the bookkeeper forgot to record the amount expired.
The omission has the following effect on the financial statements prepared December 31:
a. overstates owners' equity.
b. overstates assets.
c. understates net income.
d. overstates both owners’ equity and assets.
ANS: D PTS: 1 DIF: Medium OBJ: LO 3
TOP: AICPA FN-Measurement MSC: AACSB Analytic
5. A chart of accounts is a
a. subsidiary ledger.
b. listing of all account titles.
c. general ledger.
d. general journal.
ANS: B PTS: 1 DIF: Easy OBJ: LO 2
TOP: AICPA FN-Measurement MSC: AACSB Analytic
6. Which of the following criteria must be met before an event should be recorded for accounting
purposes?
a. The event must be an arm's-length transaction.
8. Which of the following is an item that is reportable in the financial records of an enterprise?
a. The value of goodwill earned through business operations
b. The value of human resources
c. Changes in personnel
d. Changes in inventory costing methods
ANS: D PTS: 1 DIF: Medium OBJ: LO 1
TOP: AICPA FN-Reporting MSC: AACSB Reflective Thinking
Earned Collected
a. Yes Yes
b. Yes No
c. No Yes
d. No No
ANS: C PTS: 1 DIF: Easy OBJ: LO 3
TOP: AICPA FN-Measurement MSC: AACSB Analytic
10. The debit and credit analysis of a transaction normally takes place when the
a. entry is posted to a subsidiary ledger.
b. entry is recorded in a journal.
c. trial balance is prepared.
d. financial statements are prepared.
ANS: B PTS: 1 DIF: Easy OBJ: LO 2
TOP: AICPA FN-Measurement MSC: AACSB Reflective Thinking
13. Which of the following is not among the first five steps in the accounting cycle?
a. Record transactions in journals.
b. Record closing entries.
c. Adjust the general ledger accounts.
d. Post entries to general ledger accounts.
ANS: B PTS: 1 DIF: Easy OBJ: LO 1
TOP: AICPA FN-Measurement MSC: AACSB Reflective Thinking
14. A routine collection on a customer's account was recorded and posted as a debit to Cash and a credit to
Sales Revenue. The journal entry to correct this error would be
a. a debit to Sales Revenue and a credit to Accounts Receivable.
b. a debit to Sales Revenue and a credit to Unearned Revenue.
c. a debit to Cash and a credit to Accounts Receivable.
d. a debit to Accounts Receivable and a credit to Sales Revenue.
ANS: A PTS: 1 DIF: Medium OBJ: LO 2
TOP: AICPA FN-Measurement MSC: AACSB Analytic
16. Which of the following errors will be detected when a trial balance is properly prepared?
a. An amount that was entered in the wrong account
b. A transaction that was entered twice
c. A transaction that had been omitted
d. None of these
ANS: D PTS: 1 DIF: Medium OBJ: LO 3
TOP: AICPA FN-Measurement MSC: AACSB Analytic
17. The premium on a two-year insurance policy expiring on June 30, 2015, was paid in total on July 1,
2013. The original payment was debited to the insurance expense account. The appropriate journal
entry has been recorded on December 31, 2013. The balance in the prepaid asset account on December
31, 2013, should be
a. the same as the original payment.
b. higher than if the original payment had been initially debited to an asset account.
c. lower than if the original payment had been initially debited to an asset account.
d. the same as it would have been if the original payment had been initially debited to an
asset account.
ANS: D PTS: 1 DIF: Medium OBJ: LO 3
TOP: AICPA FN-Measurement MSC: AACSB Analytic
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and can even walk unmolested through the principal streets in
Dublin.”[174]
Shortly after, he wrote as follows to his brother Charles.
“A , August 8, 1752.
“D B ,—Some of our preachers here have
peremptorily affirmed, that you are not so strict as me; that
you neither practise, nor enforce, nor approve of, the rules of
the bands. I suppose, they mean those which condemn
needless self indulgence, and recommend the means of grace,
fasting in particular; which is well-nigh forgotten throughout
this nation. I think it would be of use, if you wrote without
delay, and explain yourself at large.
“They have, likewise, openly affirmed, that you agree with
Mr. Whitefield touching perseverance, at least, if not
predestination too. Is it not highly expedient, that you should
write explicitly and strongly on this head likewise?
“Perhaps the occasion of this latter affirmation was, that
both you and I have often granted an absolute, unconditional
election of some, together with a conditional election of all
men. I did incline to this scheme for many years; but of late I
have doubted it more and more: First, because all the texts
which I used to think supported it, I now think, prove either
more or less; either absolute reprobation and election, or
neither. Secondly, because I find this opinion serves all the ill
purposes of absolute predestination; particularly that of
supporting infallible perseverance. Talk with any that holds it,
and so you will find.
“On Friday and Saturday next is our little conference at
Limerick. We join in love.”[175]
No one reading Charles Wesley’s hymns will, for a moment, entertain
the accusation, that he sympathised with the Calvinian tenets of his
friend Whitefield; and yet, remembering, that he and the Countess of
Huntingdon were now living in terms of the most intimate friendship;
and, that he was frequently preaching and administering the sacrament in
her ladyship’s house, it is not surprising, that such a report should have
become current. As to the other point, that Charles Wesley did not
approve of and enforce some of the rules of the society, we incline to
think, that this was true; and that there was already an amount of shyness
between the brothers, which soon afterwards threatened to become
something serious.
The Limerick conference (the first in Ireland) was held on the 14th
and 15th days of August. Oddly enough, there are in existence two
manuscripts, written by preachers present at the conference, and
containing its minutes and appointments. One of them, in my own
possession, was given by an aunt of Philip Guier, to the Rev. Samuel
Wood, who published a copy of it in the Irish Methodist Magazine for
1807. The other manuscript is in the handwriting of Jacob Rowell, and is
now possessed by Mr. John Steele, of Chester. It is from Rowell’s
manuscript that the editor of the new edition of the minutes, published in
1862, printed the minutes of the Limerick conference contained in that
volume.
From these important documents we learn, that there was a general
decay of the societies in Ireland, partly occasioned by the teaching of
antinomian and Calvinian doctrines; partly by the want of discipline; and
partly by the misbehaviour of preachers. All the itinerants present (ten in
number) declared, that they did not believe in the doctrine of absolute
predestination; but three of them added: “We believe there are some
persons absolutely elected; but we believe, likewise, that Christ died for
all; that God willeth not the death of any man; and that thousands are
saved that are not absolutely elected. We believe, further, that those who
are thus elected cannot finally fall; but we believe other believers may
fall, and that those who were once justified may perish everlastingly.”
Let Wesley’s letter to his brother be read in the light of this extract
from the Limerick minutes, and the one will help to explain the other. We
have here an instance of Wesley tolerating a difference in doctrine
among his preachers, so long as fundamental truths were not impugned.
This might be wise or it might not; but the fact itself is a fact worth
noticing.
It was resolved, however, that, in future, no man should be received as
a fellow labourer unless he thoroughly agreed to both Methodist doctrine
and discipline; and that, if any preacher revolted from this agreement,
letters should be sent to all the societies, disowning him.
It was, also, decided, that if a man was not able to preach twice a day,
he should be only a local preacher; that, of the two, it was better to give
up the evening preaching in a place than the morning; that the
congregations must constantly kneel in prayer, and stand both in singing
and while the text was read, and be serious and silent while the service
lasted, and when coming and going away. Persons not having band
tickets were not to be permitted to be present at the public meeting of the
bands, for this would make the tickets cheap, and would discourage
those who had them. Preachers were to be allowed £8, at least, and if
possible £10 a year for clothing; and £10 a year were to be allowed for
the support of each preacher’s wife. The preachers were to preach
frequently and strongly on fasting; and were to practise it every Friday,
health permitting. Next to luxury, they were to avoid idleness, and were
to spend one hour every day in private prayer.
Six preachers were admitted, one of whom was Philip Guier,
concerning whom we must say a word.
It is well known, that a number of Palatines, driven from Germany,
had settled in the neighbourhood of Ballingran; and that, though they
were in the first instance a sober, well conducted, and moral people, they
had, through having no minister of their own, and no German worship,
degenerated into an irreligious, drunken, swearing community. Amidst
this general degeneracy, Philip Guier breasted the wave, and, like
Milton’s Abdiel, proved faithful among the faithless. He was the master
of the German school at Ballingran; and it was in his school, that Philip
Embury (subsequently the founder of Methodism in the United States,
now a young man thirty-two years of age), had been taught to read and
write. By means of Guier, also, the devoted Thomas Walsh, of the same
age as Embury, had been enlightened, and prepared to receive the truth
as it is in Jesus. Philip Guier was made the leader of the infant society at
Limerick, and now, in 1752, was appointed to act as a local preacher
among the Palatines. He still kept his school, but devoted his spare hours
to preaching. The people loved the man, and sent him, if not money, yet
flour, oatmeal, bacon, and potatoes, so that Philip, if not rich, was not in
want. It is a remarkable fact, that, after the lapse of a hundred years, the
name of Philip Guier is as fresh in Ballingran as it ever was; for there,
even papists as well as protestants are accustomed to salute the
Methodist minister as he jogs along on his circuit horse, and to say,
“There goes Philip Guier, who drove the devil out of Ballingran!”[176]
Under the date of May 7, 1778, Wesley writes: “Two months ago, good
Philip Guier fell asleep, one of the Palatines that came over and settled in
Ireland, between sixty and seventy years ago. He was a father both to
this” [Newmarket] “and the other German societies, loving and
cherishing them as his own children. He retained all his faculties to the
last, and after two days’ illness went to God.”
After the conference at Limerick, Wesley proceeded to Cork, where he
examined the society, and found about three hundred, who were striving
to have a conscience void of offence toward God and man. At Kinsale,
he preached in a large, deep hollow, capable of containing two or three
thousand people, the soldiers of the fort, with their swords, cutting him a
place to stand upon. At Waterford, Thomas Walsh preached in Irish, and
Wesley in English, the rabble cursing, shouting, and hallooing most
furiously.
At length, after spending twelve weeks in Ireland, during which there
were not two dry days together, Wesley set sail for England; and, on
October 14, arrived safe at Bristol. Three weeks later, he came to
London, and here he continued the remainder of the year, preparing
books for the “Christian Library,” on which he had already lost more
than £200.
During this interval, Whitefield wrote as follows to Charles Wesley,
showing that distrust was creeping in among them:—
“L , December 22, 1752.
“M F ,—I have read and pondered your kind
letter. The connection between you and your brother has been
so close and continued, and your attachment to him so
necessary to keep up his interest, that I would not willingly,
for the world, do or say anything that may separate such
friends. I cannot help thinking, that he is still jealous of me
and my proceedings; but, I thank God, I am quite easy about
it. I have seen an end of all perfection. God knows how I love
and honour you, and your brother, and how often I have
preferred your interest to my own. This I shall continue to do.
More might be said, were we face to face.
“Yours, etc.,
“G W .”[177]
It is far from pleasant to end the year with a note of discord; but we
shall unfortunately have to hear more of this in future years.
In concluding the chapter with the usual list of Wesley’s publications
during the current year, there must be noticed:—
1. The continuation of his “Christian Library.” Twelve volumes had
been given to the public already; seven more were issued in 1752,
containing extracts from the writings of Thomas Manton, Isaac
Ambrose, Jeremy Taylor, Ralph Cudworth, Nathaniel Culverwell, John
Owen, and others.
2. “Some Account of the Life and Death of Matthew Lee.” 12mo, 24
pages.
3. “Serious Thoughts concerning Godfathers and Godmothers.” 12mo,
four pages. The tract was written at Athlone in Ireland, but was hardly
worth publishing. Of course, Wesley approves of godfathers and
godmothers; but acknowledges that baptism is valid without them.
4. “Predestination calmly Considered.” 12mo, 83 pages. We have
already seen, that three of the preachers, present at the Irish conference,
expressed their belief, that some persons are absolutely elected, but that
thousands are saved who are not elected. It was also rumoured, that
Charles Wesley inclined to Whitefield’s predestinarian views. Under
such circumstances, Wesley’s “Predestination calmly Considered” was a
needed and opportune production. He writes (page 6): “There are some
who assert the decree of election, and not the decree of reprobation. They
assert, that God hath, by a positive, unconditional decree, chosen some to
life and salvation; but not that He hath, by any such decree, devoted the
rest of mankind to destruction. These are they to whom I would address
myself first.” This is one of Wesley’s most cogent and exhaustive
pamphlets, written in a most loving spirit, and yet utterly demolishing
the Calvinistic theory. He shows conclusively, that no man can
consistently hold the doctrine of election without holding the cognate
doctrine of reprobation,—a doctrine wholly opposed to the plainest
teachings of holy Scripture, dishonouring to God, overthrowing the
scriptural doctrines of a future judgment, and of rewards and
punishments, and “naturally leading to the chambers of death.” It is
difficult to conceive how any one can read Wesley’s treatise, and still
remain a Calvinist. None of his Methodistic friends tried to answer it; but
Dr. John Gill, the pastor of a Baptist church in Southwark, published, in
the same year, the two following pamphlets:—“The Doctrine of the
Saints’ Final Perseverance, asserted and vindicated. In answer to a late
pamphlet, called Serious Thoughts on that subject.” 8vo, 59 pages. And,
“The Doctrine of Predestination stated and set in the Scripture light; in
opposition to Mr. Wesley’s Predestination Calmly Considered. With a
reply to the exceptions of the said writer to the Doctrine of the
Perseverance of the Saints.” 8vo, 52 pages. In the latter production, Dr.
Gill says, that Wesley, in noticing his former one, had “contented himself
with low, mean, and impertinent exceptions, not attempting to answer
one argument, and yet having the assurance, in the public papers, to call
this miserable piece of his, chiefly written on another subject, ‘A full
answer to Dr. Gill’s pamphlet on Final Perseverance.’” This, on the part
of Dr. Gill, was the wincing whine of a defeated man. It was not worthy
of him. Dr. Gill was now fifty-five years of age, and a man of vast
learning and research. Before his twentieth year, he had read all the
Greek and Latin authors that had fallen in his way, and had so studied
Hebrew as to be able to read the Old Testament in the original with
pleasure. Besides other works, he was the author of “A Body of
Divinity,” in three quarto volumes; and of “An Exposition of the Old and
New Testament,” in nine volumes, folio. The university of Aberdeen had
conferred upon him the degree of a doctor of divinity, “on account of his
great knowledge of the Scriptures, of the oriental languages, and of
Jewish antiquities, of his learned defence of the Scriptures against deists
and infidels, and the reputation gained by his other works”; but, in terse,
powerful, conclusive argument, John Gill was not a match for John
Wesley. He was a man of excellent moral character; but he was an ultra
Calvinist. He was a man of unwearied diligence, of laborious research, of
vast learning; but his immense mass of valuable materials were
comparatively useless, for he had neither talent to digest, nor skill to
arrange them. We think it was Robert Hall who not inaptly described his
voluminous productions as “a continent of mud.” He died in 1771.
5. Another of Wesley’s publications in 1752 was, “A Second Letter to
the Author of ‘The Enthusiasm of Methodists and Papists compared.’”
This was published in the month of January; and, at the same time, was
issued, “A Third Letter to the Author of the Enthusiasm of Methodists,”
etc. By Vincent Perronet, A.M.; price sixpence.”[178]
Lavington published the second part of his lampooning work in
1749;[179] and part third in 1751. Of Part II., Whitefield wrote, in a letter
to Lady Huntingdon, dated August 24, 1749:—“I have seen the bishop’s
second pamphlet, in which he serves the Methodists, as the Bishop of
Constance served John Huss, when he ordered painted devils to be put
round his head, before they burnt him. His preface to me is most virulent.
Everything I wrote, in my answer, is turned into the vilest ridicule. I
cannot see that it calls for any further answer from me. Mr. Wesley, I
think, had best attack him now, as he is largely concerned in this second
part.”[180]
Whitefield was not a match for an episcopal buffoon like Lavington;
and hence he hands him over to his trenchant friend Wesley. The preface,
of more than thirty pages, addressed to Whitefield, was full of banter;
and in Part II., following it, he is treated with the same coarse rudeness.
He and Wesley and the Methodist preachers in general are accused of
assuming “the ostentation of sanctified looks,” “fantastical oddities,”
“affectation of godly and Scripture phrases,” “and high pretensions to
inspiration.” “Their great swelling words of vanity, and proud boastings,
had been carried to a most immoderate and insufferable degree.” “They
were either innocent madmen, or infamous cheats.” As for Whitefield,
“no man ever so bedaubed himself with his own spittle. His first Account
of God’s Dealings with him was such a boyish, ludicrous, filthy, nasty,
and shameless relation of himself, as quite defiles paper, and is shocking
to decency and modesty. It is a perfect jakes of uncleanness.” Wesley had
“so fanaticised his own followers, and given them so many strong doses
of the enthusiastic tincture, as to turn their brains and deprive them of
their senses.” “The mountebank’s infallible prescriptions must be
swallowed, whatever be the consequence, though they die for it.” The
Methodists are charged with “the black art of calumny, with excessive
pride and vanity, with scepticisms and disbeliefs of God and Christ, with
disorderly practices, and inveterate broils among themselves, and with a
coolness for good works, and an uncommon warmth for some that are
very bad.” “In their several Answers and Defences, a strain of jesuitical
sophistry, artifice and craft, evasion, reserve, equivocation, and
prevarication, is of constant use.”
Lavington’s Part III., a volume in itself, is addressed “to the Reverend
Mr. Wesley”; who is made the almost exclusive object of its virulent
attack. He is told, that he is “an arrant joker, a perfect droll.” “Go on,”
says the ribald bishop, “and build chapels. One may be dedicated to the
god Proteus, famous for being a juggling wonder-monger, and turning
himself into all shapes; another to the god called Catius, because he
made men sly and cunning as cats. The people with whom you have to
do, you know, will adore you; for the same reason that the Egyptians did
their bull Apis; because renowned for miracles, and every hour changing
its colour.” He adds: “your Letter to the author of Enthusiasm is a
medley of chicanery, sophistry, prevarication, evasion, pertness,
conceitedness, scurrility, sauciness, and effrontery. Paper and time
should not be wasted on such stuff.” And this was all the answer his
lordship furnished.
We are afraid to make our pages, what Lavington has made his book,
“a perfect jakes of uncleanness,” by further quotations. Suffice it to say,
that the whole of this scurrility was anonymous.
No wonder that Wesley, in his answer, speaks of his calumniator as
“one that turns the most serious, the most awful, the most venerable
things into mere farce, and matter of low buffoonery”; one who treats
sacred topics with the “spirit of a merry-andrew.” He convicts him of the
most flagrant falsehood, and says, “I charge you with gross, wilful
prevarication, from the beginning of your book to the end”; and firmly,
but respectfully, sustains the charge. He writes:—
“I have now considered all the arguments you have brought
to prove, that the Methodists are carrying on the work of
popery. And I am persuaded, every candid man, who rightly
weighs what has been said, with any degree of attention, will
clearly see, not only, that no one of those arguments is of any
real force at all, but that you do not believe them yourself;
you do not believe the conclusion which you pretend to
prove; only you keep close to your laudable resolution of
throwing as much dirt as possible.”
Such was Wesley’s advice; his example, however, was often widely
different.
On March 19, Wesley and his wife set out from Bristol for the north of
England.
At Evesham, he preached in the town hall, where most of the
congregation were still and attentive, excepting some at the lower end,
who, he says, “were walking to and fro, laughing and talking, as if they
had been in Westminster Abbey.”
At Birmingham, he talked with Sarah B——, one of six wild
enthusiasts, who had disturbed the society, and, by their antinomian
blasphemy, shown themselves fit for Bedlam.
At Nantwich, he was “saluted with curses and hard names;” and soon
afterwards, the mob pulled down the chapel.[188]
At Davyhulme, he found, what he had never heard of in England, a
clan of infidel peasants. He writes: “a neighbouring alehouse keeper
drinks, and laughs, and argues into deism all the ploughmen and
dairymen he can light on. But no mob rises against him; and reason
good: Satan is not divided against himself.”
In the Manchester society, he found seventeen dragoons, who had
been in the same regiment with John Haime in Flanders; but they utterly
despised both John and his Master till they came to Manchester, where
they were “now a pattern of seriousness, zeal, and all holy conversation.”
At Chipping, when he was about to go into the pulpit of his friend, the
Rev. Mr. Milner, a man thrust himself before him, and said, “You shall
not go into the pulpit;” and by main strength pushed him back. Eight or