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Exam 2: Analyzing Transactions

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Question 51

True/False

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For a month's transactions for a typical medium-sized business,the accounts payable account is likely to have only credit entries.

A) True
B) False

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Question 52

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Which one of the statements below is not a purpose for the journal?

A) to show increases and decreases in accounts
B) to show a chronological order by date
C) to show a complete transaction in one place
D) to help locate errors

E) A) and D)
F) A) and C)

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Question 53

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An account is said to have a debit balance if

Randomly listed below are the steps for preparing a trial balance: 1 Verify that the total of the Debit column equals the total of the Credit column. 2 List the accounts from the ledger and enter their debit or credit balance in the Debit or Credit column of the trial balance. 3 List the name of the company,the title of the trial balance,and the date the trial balance is prepared. 4 Total the Debit and Credit columns of the trial balance. What is the proper order of these steps?

Record the following selected transactions for April in a two-column journal,identifying each entry by letter: a. Received $18,000 from sale of common stock. b. Purchased equipment for $27,000,paying $10,000 in cash and giving a note payable for the remainder. c. Paid $2,300 for rent for April. d. Purchased $1,500 of supplies on account. e. Recorded $9,800 of fees earned on account. f. Received $7,500 in cash for fees earned. g. Paid $1,200 to creditors on account. h .Paid wages of $3,425. i. Received $7,900 from customers on account. j. Recorded dividends of $1,875.

The order of the flow of accounting data is 1 record in the ledger,2 record in the journal,3 prepare the financial statements.

The process of recording a transaction in the journal is called journalizing.

A debit signifies a decrease in

Net income will result when

When an account receivable is collected in cash,the total assets of the business increase.

The classification and normal balance of the dividends account is

On December 1, JumpStart Company provides $2,800 in services to clients. a. Journalize this event as if the clients had paid cash at the time the services were rendered. b1. Journalize this event as if the clients had placed this on account. b2. Assume that the clients paid $1,200 of the amount on account on December 30. Journalize this transaction.

When a transposition error is made on the trial balance,the difference between the debit and credit totals on the trial balance will be

The process of transferring the data from the journal to the ledger accounts is called posting.

Office supplies were sold by Janer's Cleaning Service at cost to another repair shop,with cash received.Which of the following entries for Janer's Cleaning Service records this transaction?

Prepare a journal entry on October 12 for the fees earned on account, $14,600. Omit explanation.

The balance of an account is determined by

A trial balance determines the accuracy of the numbers.

Expenses result from using up assets or consuming services in the process of generating revenues.

Journalizing is the process of entering amounts in the ledger.