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1.
Accounts
are records of increases and decreases in individual financial statement items.
a. True
b. False
2. A chart of accounts is a listing
of accounts that make up the journal.
a. True
b. False
3. The chart of accounts should be
the same for each business.
a. True
b.
False
Accounts payable are accounts
that you expect will be paid to you.
c. True
d. False
4. Consuming goods and services in
the process of generating revenues results in expenses.
a. True
b. False
5. Prepaid expenses are an example
of an expense.
a. True
b. False
6.
The
Unearned Revenues account is an example of a liability.
a. True
b. False
7. The Drawings account is an
example of an expense.
a. True
b. False
8. Accounts in the ledger are
usually maintained in alphabetical order.
a. True
b. False
9.
Depending
on the account title, the right side of the account is referred to as the
credit side.
a. True
b. False
10. To determine the balance in an
account, always subtract credits from debits.
a. True
b. False
11. An account in its simplest form
has three parts to it: a title, an increase side, and a decrease side.
a. True
b. False
12.
The
T account got its name because it resembles the letter “T.”
a. True
b. False
13. The right hand side of a T
account is known as a debit and the left hand side is known as a credit.
a. True
b. False
14. Debiting the cash account will
increase the account.
a. True
b. False
15.
A
credit to the cash account will increase the account.
a. True
b. False
16. The cash account will always be
debited.
a. True
b. False
17. The recording of cash receipts
to the cash account will be done by debiting the account.
a. True
b. False
18.
The
recording of cash payments from the cash account is done by entering the amount
as a credit.
a. True
b. False
19. The balance of the account can
be determined by adding all of the debits, adding all of the credits, and
adding theamounts together.
a.
True
b. False
20. Liabilities are debts owed by
the business entity.
a. True
b. False
21.
The
accounts payable account is listed in the chart of accounts as an asset.
a. True
b. False
22.
A
drawing account represents the amount of withdrawals made by the owner.
a. True
b. False
23. Revenues are equal to the
difference between cash receipts and cash payments.
a. True
b. False
24.
Expenses
result from using up assets or consuming services in the process of generating
revenues.
a. True
b. False
25. Owner’s equity will be reduced
by the amount in the drawing account.
a. True
b. False
26. When an owner invests assets in
the business, the capital account increases due to revenue being earned.
a. True
b. False
27.
When
an account receivable is collected in cash, the total assets of the business
increase.
a. True
b. False
28.
When
an account payable is paid with cash, the owner's equity in the business
decreases.
a. True
b. False
29. For a month's transactions for a
typical medium-sized business, the salary expense account is likely to have
onlycredit entries.
a.
True
b. False
30.
A
debit is abbreviated as Db and a
credit is abbreviated as Cr.
a. True
b. False
31. When a business receives a bill
from the utility company, no entry should be made until the invoice is paid.
a. True
b. False
32. For a month's transactions for a
typical medium-sized business, the accounts payable account is likely to have
onlycredit entries.
a.
True
b. False
33.
Withdrawals
decrease owner's equity and are listed on the income statement as a deduction
from revenue.
a. True
b. False
34. The normal balance of revenue
accounts is a credit.
a. True
b. False
35. The normal balance of an expense
account is a credit.
a. True
b. False
36.
The
normal balance of the drawing account is a debit.
a. True
b. False
37. Expense accounts are increased
by credits.
a. True
b. False
38. The normal balance of a capital
account is a debit.
a. True
b. False
39.
Revenue
accounts are increased by credits.
a. True
b. False
40. Liability accounts are increased
by debits.
a. True
b. False
41. Journalizing transactions using
the double-entry bookkeeping system will eliminate fraud.
a. True
b. False
42.
Transactions
are listed in the journal chronologically.
a. True
b. False
43. Journalizing is the process of
entering amounts in the ledger.
a. True
b. False
44. The process of recording a
transaction in the journal is called journalizing.
a. True
b. False
45. Transactions are initially
entered into a record called a journal.
a. True
b. False
46.
The
double-entry accounting system records each transaction twice.
a. True
b. False
47. The increase side of an account
is also the side of the normal balance.
a. True
b. False
48. Journal entries include both
debit and credit accounts for each transaction.
a. True
b. False
49.
A
transaction that is recorded in the journal is called a journal entry.
a. True
b. False
50. Assets are increased with debits
and decreased with credits.
a. True
b. False
51. Liabilities are increased with
debits and decreased with credits.
a. True
b. False
52.
Debits
will increase Unearned Revenues and Revenues.
a. True
b. False
53. All owners’ equity accounts
record increases to the accounts with credits.
a. True
b. False
54. Journalizing always eliminates
fraudulent activity.
a. True
b. False
55.
Journal
entries can have more than two accounts as long as the debits equal the
credits.
a. True
b. False
56. Normal account balances are on
the increase side of the accounts.
a. True
b. False
57. The process of transferring the
data from the journal to the ledger accounts is called posting.
a. True
b. False
58.
The
post reference notation used in the ledger is the account number.
a. True
b. False
59. The post reference notation used
in the journal is the page number.
a. True
b. False
60. A notation in the post reference
column of the general journal indicates that the amount has been posted to
theledger.
a.
True
b. False
61. The order of the flow of
accounting data is (1) record in the ledger, (2) record in the journal, (3)
prepare thefinancial statements.
a.
True
b. False
62. The process of transferring the
debits and credits from the journal entries to the accounts is known as
posting.
a. True
b. False
63. Postings made to standard
account forms show a new balance after each entry.
a. True
b. False
64.
A
group of related accounts that make up a complete unit is called a trial
balance.
a. True
b. False
65. A trial balance determines the
accuracy of the numbers.
a. True
b. False
66. Even when a trial balance is in
balance, there may be errors in the individual accounts.
a. True
b. False
67. The totals at the bottom of the
trial balance and the totals at the bottom of the balance sheet both show
equality andbalancing, and therefore should be equal.
a.
True
b. False
68. A proof of the equality of
debits and credits in the ledger at the end of an accounting period is called a
balancesheet.
a.
True
b. False
69. If the trial balance is in
balance, it can be assumed that all journal entries were posted correctly and
no errors weremade.
a.
True
b. False
70.
Posting
a part of a transaction to the wrong account will cause the trial balance
totals to be unequal.
a. True
b. False
71. The erroneous arrangement of
digits, such as writing $45 as $54, is called a slide.
a. True
b. False
72. Journalizing a transaction with
both the debit and the credit for $69 instead of $96 will cause the trial
balance to beout of balance.
a.
True
b. False
73. The erroneous moving of an
entire number one or more spaces to the right or left, such as writing $85 as
$850, iscalled a transposition.
a.
True
b. False
74. Accounts
a. do not reflect money amounts
b. are not used by entities that
manufacture products
c. are records of increases and
decreases in individual financial statement items
d. are only used by large entities
with many transactions
75. Accounts are classified in the
ledger
a. chronologically
b. alphabetically
c. in accordance with their
appearance in the financial statements
d. so that accounts used most often
are listed first
76.
Which
of the following accounts is an owner's equity account?
a. Cash
b. Accounts Payable
c. Prepaid Insurance
d. Ross Morris, Capital
77. The gross increases in owner's
equity attributable to business activities are called
a. assets
b. liabilities
c. revenues
d. expenses
78. A chart of accounts is
a. the same as a balance sheet
b. usually a listing of accounts in
alphabetical order
c. usually a listing of accounts in
financial statement order
d. used in place of a ledger
79.
The
debit side of an account
a. depends on whether the account
is an asset, liability, or owner's equity
b. can be either side of the
account depending on how the accountant set up the system
c. is the right side of the account
d. is the left side of the account
80. An account is said to have a
debit balance if
a. the amount of the debits exceeds
the amount of the credits
b. there are more entries on the
debit side than on the credit side
c. there are more entries on the
credit side than on the debit side
d. the first entry of the
accounting period was posted on the debit side
81. Which side of the account
increases the cash account?
a. credit
b. neither a debit or a credit
c. debit
d. either a debit or a credit
82.
Which
statement(s) concerning cash is (are) true?
a. cash will always have more
debits than credits
b. cash will never have a credit
balance
c. cash is increased by debiting
d. all of the above
83. Which of the following is true
about T accounts?
a. The left side of a T account is
called the debit side.
b. The left side of a T account is
called the credit side.
c. The right side of a T account is
called the debit side.
d. Transactions are first recorded
in T accounts and then posted to the journal.
84. A cash payment is recorded in
the cash account as
a. neither a debit or a credit
b. a credit
c. a debit
d. either a debit or a credit
85.
The
balance of an account is determined by
a. adding all of the debits to all
of the credits
b. always subtracting the debits
from the credits
c. always subtracting the credits
from the debits
d. adding all of the debits, adding
all of the credits, and then subtracting the smaller sum from the larger sum
86. A debit may signify a(n)
a. decrease in asset accounts
b. decrease in liability accounts
c. increase in the capital account
d. decrease in the drawing account
87. A list of the accounts used by a
business is called the
a. journal
b. chart of accounts
c. T chart
d. debit listing
88.
In
the chart of accounts, the balance sheet accounts are normally listed in which
order?
a. liabilities, assets, owner’s
equity
b. assets, liabilities, owner’s
equity
c. owner’s equity, assets,
liabilities
d. assets, owner’s equity,
liabilities
89. In which order are the accounts
listed in the chart of accounts?
a. assets, expenses, liabilities,
owner’s equity, revenues
b. owner's equity, assets,
liabilities, revenues, expenses
c. assets, liabilities, owner’s
equity, revenues, expenses
d. assets, liabilities, revenues,
expenses, owner's equity
90. Which are the parts of the T account?
a. title, date, total
b. date, debit side, credit side
c. title, debit side, credit side
d. title, debit side, total
91.
The
chart of accounts is designed to
a. alphabetize the accounts to make
reading easier for financial statement users
b. organize accounts in order of
dollar amount to simplify the accounting information for users
c. summarize the transactions and
determine ending account balances
d. meet the information needs of a
company's managers and other users of its financial statements
92. Which group of accounts is comprised
of only assets?
a. Cash, Accounts Payable,
Buildings
b. Accounts Receivable, Revenue,
Cash
c. Prepaid Expenses, Buildings,
Patents
d. Unearned Revenues, Prepaid
Expenses, Cash
93.
Of
the following, which is trueabout assets?
a. Assets include both physical and
intangible items.
b. Assets include only physical
items.
c. Assets are the personal property
of the owner of the company.
d. Assets are the result of selling
products or services to customers.
94.
Which
of the following is notconsidered to be a liability?
a. Wages Payable
b. Accounts Receivable
c. Unearned Revenues
d. Accounts Payable
95.
Which
of the following statements is nottrue about liabilities?
a. Liabilities are debts owed to
outsiders.
b. Account titles of liabilities
often include the term “payable.”
c. Cash received before a service
is performed creates a liability.
d. Liabilities do not include wages
owed to employees of the company.
96.
The
owner’s equity will be reduced by all of the following except
a. revenues
b. expenses
c. withdrawals
d. all of these
97.
Expenses
can result from
a. increasing owner’s equity
b. consuming services
c. using up liabilities
d. purchasing assets
98. In the chart of accounts, each
account number has two digits. The first digit indicates the major account
group towhich the account belongs. Which of the following correctly identifies
the major account groups typicallyrepresented by the numbers 1 through 5?
a. 1Assets, 2Liabilities,
3Owner’s Equity, 4Expenses, 5Revenues
b. 1Assets, 2Liabilities,
3Owner’s Equity, 4Revenues, 5Expenses
c. 1Assets, 2Owner’s Equity, 3Revenues,
4Expenses, 5Drawing
d. 1Owner’s Equity, 2Drawing,
3Revenues, 4Expenses
99.
The
accounts in the ledger of Monroe Entertainment Co. are listed below. All accounts have normal balances.
|
Accounts
Payable
|
$1,500
|
Fees
Earned
|
$3,600
|
|
Accounts Receivable
|
1,800
|
Insurance Expense
|
1,300
|
|
Prepaid Insurance
|
2,000
|
Land
|
3,000
|
|
Cash
|
3,200
|
Wages Expense
|
1,400
|
|
Drawing
|
1,200
|
Capital
|
8,800
|
|
The total of all the assets
isa. $10,000
|
|
||
|
b.
$8,000
|
|||
|
c.
$9,700
|
|||
|
d.
$9,800
|
|||
100. The balance of an account is determined
by
a. adding all of the debits to all
of the credits
b. always subtracting the debits
from the credits
c. always subtracting the credits
from the debits
d. adding all of the debits, adding
all of the credits, and then subtracting the smaller sum from the larger sum
101.
Which
of the following types of accounts have a normal credit balance?
a. assets and liabilities
b. liabilities and expenses
c. revenues and capital
d. capital and drawing
102. Which of the following groups of
accounts have a normal debit balance?
a. revenues, liabilities, and
capital
b. capital and assets
c. liabilities and capital
d. assets and expenses
103.
Which
one of the statements below is nota 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
104.
A
credit may signify a
a. decrease in assets
b. decrease in liabilities
c. decrease in capital
d. decrease in revenue
105. A debit signifies a decrease in
a. assets
b. expenses
c. drawing
d. revenues
106. Which of the following applications
of the rules of debit and credit is true?
a. decrease Prepaid Insurance with
a credit and the normal balance is a credit
b. increase Accounts Payable with a
credit and the normal balance is a debit
c. increase Equipment with a debit
and the normal balance is a debit
d. decrease Cash with a debit and
the normal balance is a credit
107.
Which
of the following describes the classification and normal balance of the fees
earned account?
a. asset, credit
b. liability, credit
c. owner's equity, debit
d. revenue, credit
108. The classification and normal
balance of the accounts payable account is
a. an asset with a credit balance
b. a liability with a credit
balance
c. owner's equity with a credit
balance
d. revenue with a credit balance
109. The classification and normal
balance of the drawing account is
a. an expense with a credit balance
b. an expense with a debit balance
c. a liability with a credit
balance
d. owner's equity with a debit
balance
110.
Which
of the following accounts are debited to record increases?
a. assets and liabilities
b. drawing and liabilities
c. expenses and liabilities
d. assets and expenses
111. In which of the following types
of accounts are increases recorded by credits?
a. revenues and liabilities
b. drawing and assets
c. liabilities and drawing
d. expenses and liabilities
112. In which of the following types
of accounts are decreases recorded by debits?
a. assets
b. liabilities
c. expenses
d. drawing
113.
In
which of the following types of accounts are decreases recorded by credits?
a. liabilities
b. owner's equity
c. assets
d. revenues
114. A credit balance in which of the
following accounts would indicate a likely error?
a. Fees Earned
b. Salary Expense
c. Janet James, Capital
d. Accounts Payable
115. A debit balance in which of the
following accounts would indicate a likely error?
a. Salaries Expense
b. Notes Payable
c. Edgar Martin, Drawing
d. Supplies
116.
Which
of the following entries records the payment of an account payable?
a. debit Cash; credit Accounts
Payable
b. debit Accounts Receivable;
credit Cash
c. debit Cash; credit Supplies
Expense
d. debit Accounts Payable; credit
Cash
117. Which of the following entries
records the investment of cash by Taylor Thomas, owner of a proprietorship?
a. debit Taylor Thomas, Capital;
credit Accounts Receivable
b. debit Cash; credit Taylor
Thomas, Capital
c. debit Taylor Thomas, Drawing;
credit Cash
d. debit Cash; credit Taylor Thomas,
Drawing
118. Which of the following entries
records the payment of a bill for your insurance premium?
a. debit Prepaid Insurance; credit
Cash
b. debit Insurance Payable; credit
Accounts Receivable
c. debit Accounts Payable; credit
Cash
d. debit Cash; credit Prepaid
Insurance
119. Which of the following entries
records the withdrawal of cash by Sally Anderson, owner of a proprietorship,
forpersonal use?
a. debit Sally Anderson, Capital;
credit Cash
b. debit Sally Anderson, Drawing;
credit Cash
c. debit Salaries Expense; credit Cash
d. debit Salaries Expense; credit
Salaries Payable
120. Office supplies were sold by
Janer's Cleaning Service at cost to another repair shop, with cash
received. Which ofthe following entries
for Janer's Cleaning Service records this transaction?
a. Office Supplies, debit; Cash,
credit
b. Office Supplies, debit; Accounts
Payable, credit
c. Cash, debit; Office Supplies,
credit
d. Accounts Payable, debit; Office
Supplies, credit
121. Office supplies purchased by
Janer's Cleaning Service on account were returned. Which of the following entriesfor Janer's
Cleaning Service records this transaction?
a. Cash, debit; Office Supplies,
credit
b. Office Supplies, debit; Accounts
Receivable, credit
c. Accounts Payable, debit; Office
Supplies, credit
d. Office Supplies, debit; Accounts
Payable, credit
122. Cash was paid by Janer's
Cleaning Service to creditors on account.
Which of the following entries for Janer'sCleaning Service records this
transaction?
a. Cash, debit; Debbi Janer,
Capital, credit
b. Accounts Payable, debit; Cash,
credit
c. Accounts Receivable, debit;
Cash, credit
d. Accounts Payable, debit; Account
Receivable, credit
123. The process of initially
recording a business transaction is called
a. closing
b. posting
c. journalizing
d. balancing
124. Which of the following entries
records the acquisition of office supplies on account?
a. Office Supplies, debit; Cash,
credit
b. Cash, debit; Office Supplies,
credit
c. Office Supplies, debit; Accounts
Payable, credit
d. Accounts Receivable, debit;
Office Supplies, credit
125.
Which
of the following entries records the payment of insurance for the current
month?
a. Cash, debit; Insurance Expense,
credit
b. Insurance Expense, debit; Cash,
credit
c. Insurance Expense, debit;
Accounts Receivable, credit
d. Prepaid Insurance, debit; Cash,
credit
126. Which of the following entries
records the receipt of cash from clients on account?
a. Accounts Payable, debit; Fees
Earned, credit
b. Accounts Receivable, debit; Fees
Earned, credit
c. Accounts Receivable, debit;
Cash, credit
d. Cash, debit; Accounts
Receivable, credit
127. Which of the following entries
records the collection of cash from cash customers?
a. Fees Earned, debit; Cash, credit
b. Fees Earned, debit; Accounts
Receivable, credit
c. Cash, debit; Fees Earned, credit
d. Accounts Receivable, debit; Fees
Earned, credit
128. Which of the following entries
records the receipt of cash for two months' rent? The cash was received in
advanceof providing the service.
a. Prepaid Rent, debit; Rent
Revenue, credit.
b. Cash, debit; Unearned Rent,
credit.
c. Cash, debit; Prepaid Rent,
credit.
d. Cash, debit; Rent Expense
credit.
129. A client has a massage and asks
the company bookkeeper to mail her the bill.
The bookkeeper should make whichentry to record the invoice?
a. No entry until the cash is
received
b. Fees Earned, debit; Accounts
Receivable, credit
c. Cash, debit; Fees Earned, credit
d. Accounts Receivable, debit; Fees
Earned, credit
130. Which of the following
abbreviations is correct?
a. Debit “Dr”, Credit “Cd”
b. Debit “Db”, Credit “Cr”
c. Debit “Db”, Credit “Cd”
d. Debit “Dr”, Credit “Cr”
131.
Which
of the following is nota correct rule of debits and credits?
a. Assets, expenses, and
withdrawals are increased by debits.
b. Assets are decreased by credits
and have a normal debit balance.
c. Liabilities, revenues, and
owner’s equity are increased by credits.
d. The normal balance for revenues
and expenses is a credit.
132. Gently Laser Clinic purchased
laser equipment for $8,500, paid $2,250 down, with the remainder to be
paidlater. The correct entry would be
|
a.
Equipment
Cash
|
2,250
|
2,250
|
|
b.
Cash
|
2,250
|
|
|
Accounts Payable
Equipment
|
6,250
|
8,500
|
|
c.
Equipment Expense
|
8,500
|
|
|
Accounts PayableCash
|
|
2,250
6,250
|
|
d.
Equipment
Accounts
Payable
|
7,500
|
5,250
|
|
Cash
|
|
2,250
|
133. The is where a transaction
can first be found in the accounting records.
a. chart of accounts
b. income statement
c. balance sheet
d. journal
134. The process of recording a
transaction in the journal is called
a. ledgerizing
b. journalizing
c. posting
d. summarizing
135. Joshua Scott invests $40,000
into his new business. How would this
transaction be entered in the journal in goodform?
a.
Cash 40,000
Joshua Scott,
Capital 40,000Invested
cash in business.
b.
Cash 40,000
Joshua Scott, Capital 40,000Invested
cash in business
c.
Joshua
Scott, Capital 40,000
Cash 40,000
Invested cash in business
d.
Joshua
Scott, Loan 40,000
Cash 40,000
Invested cash in business
137.
|
May
|
23
|
Cash
|
|
22,000
|
|
|
|
|
Scott
Clark, Capital
|
|
|
22,000
|
|
|
|
Invest
cash in business.
|
|
|
|
The journal entry
will
a. increase Capital and decrease
Cash
b. increase Cash and decrease
Capital
c. increase Cash and increase
Capital
d. decrease Cash and decrease
Capital
138.
|
May
|
24
|
Land
|
|
105,000
|
|
|
|
|
Cash
|
|
|
105,000
|
|
|
|
Purchased
land for business.
|
|
|
|
What effects does this journal entry have on the accounts?
a. increase Cash and increase Land
b. increase Land and decrease Cash
c. decrease Cash and decrease Land
d. increase Cash and decrease Land
139.
|
March
|
10
|
Accounts
Payable
|
|
800
|
|
|
|
|
Cash
|
|
|
800
|
|
|
|
Paid
creditors on account.
|
|
|
|
What effects does this journal entry have on the accounts?
a. decrease Accounts Payable,
increase Cash
b. increase Cash, decrease Accounts
Payable
c. increase Accounts Payable,
increase Cash
d. decrease Accounts Payable,
decrease Cash
140. Which of the following accounts
would be increased with a credit?
a. Land; Accounts Payable; Drawing
b. Accounts Payable; Unearned
Revenue; Collins, Capital
c. Collins, Capital; Accounts
Receivable; Unearned Revenue
d. Cash; Accounts Receivable;
Collins, Capital
141.
In
accordance with the debit and credit rules, which of the following is true?
a. Debits increase assets.
b. Credits increase assets.
c. Debits increase both assets and
capital.
d. Credits increase both assets and
liabilities.
142. All of the following accounts
are increased with a debit except
a. Unearned Revenues
b. Land
c. Accounts Receivable
d. Cash
143. Which of the following owner’s
equity accounts follows the same debit and credit rules as liabilities?
a. expense accounts only
b. drawing accounts only
c. revenue accounts only
d. expense and drawing accounts
144.
The
payment for the monthly rent will require which of the following entries?
a. debit Cash and debit Rent
Expense
b. credit Cash and credit Rent
Expense
c. debit Rent Expense and credit
Cash
d. credit Rent Expense and debit
Cash
145.
Expenses
follow the same debit and credit rules as
a. revenues
b. the drawing account
c. the capital account
d. liabilities
146. Net income will result when
a. revenues (credits) > expenses
(debits)
b. revenues (debits) > expenses
(credits)
c. expenses (credits) = revenues
(debits)
d. revenues (credits) = expenses
(debits)
147.
Which
of the following will increase owner’s equity?
a. Expenses > revenues.
b. The owner draws money for
personal use.
c. Revenues > expenses.
d. Cash is received from customers
on account.
148.
Which
of the following situations increase owner’s equity?
a. Supplies are purchased on
account.
b. Services are provided on
account.
c. Cash is received from customers
on account.
d. Utility bill will be paid next
month.
149. Which of the following groups of
accounts are increased with a debit?
a. assets, liabilities, owner’s
equity
b. assets, drawing, expenses
c. assets, revenues, expenses
d. assets, liabilities, revenues
150.
Which
of the following groups of accounts increase with a credit?
a. capital, revenues, expenses
b. assets, capital, revenues
c. liabilities, capital, revenues
d. none of these
151.
Which
of the following is true regarding normal balances of accounts?
a. All accounts have a normal debit
balance.
b. The normal balance of all
accounts will have either a positive or negative balance.
c. Accounts that have a normal
debit balance will only have debit entries, never credit entries.
d. The normal balance is on the
increase side of the account.
152. Which of the following is nottrue
with a double-entry accounting system?
a. The accounting equation remains
in balance.
b. The sum of all debits is always
equal to the sum of all credits in each journal entry.
c. Each business transaction will
have two debits.
d. Every transaction affects at
least two accounts.
153.
|
March
|
6
|
Cash
|
|
2,500
|
|
|
|
|
Unearned
Fees
|
|
|
2,500
|
|
|
|
????????????.
|
|
|
|
What is the best explanation for this journal entry?
a. Received cash for services
performed.
b. Received cash for services to be
performed in the future.
c. Paid cash in advance for
services to be performed.
d. Performed services for which
cash is owed.
154.
|
April
|
14
|
Equipment
|
|
15,000
|
|
|
|
|
Cash
|
|
|
5,000
|
|
|
|
Note
Payable
|
|
|
10,000
|
|
|
|
????????????.
|
|
|
|
Which is the best explanation for this journal entry?
a. Purchased equipment; paid cash
of $5,000, with the remainder to be paid in the future.
b. Purchased equipment; paid cash
of $10,000, with the remainder to be received in the future.
c. Purchased equipment with cash.
d. Purchased equipment on account.
155. The process of transferring the
debits and credits from the journal entries to the accounts is called
a. sliding
b. transposing
c. journalizing
d. posting
156. The posting process will include
the transfer of which of the following data from the journal to the account?
a. date, amount (debit or credit)
b. date, amount (debit or credit),
journal page number
c. amount (debit or credit), account
number
d. date, amount (debit or credit)
account number
157. The Posting Reference columns
are used to trace transactions from the accounts to the journal. What will
beentered in the Posting Reference column of (1) the journal and (2) the
account?
a. (1) the amount of the debit or
credit and (2) the journal page number
b. (1) the journal page number and
(2) the date of the transaction
c. (1) the journal page number and
(2) the account number
d. (1) the account number and (2)
the journal page number
The chart of accounts for the Corning Company includes the
following:
|
Account
Name
|
Account Number
|
|
Cash
|
11
|
|
Accounts
Receivable
|
13
|
|
Prepaid
Insurance
|
15
|
|
Accounts
Payable
|
21
|
|
Unearned
Revenue
|
24
|
|
Corning,
Capital
|
31
|
|
Corning,
Drawing
|
32
|
|
Fees
Earned
|
41
|
|
Salaries
Expense
|
54
|
|
Rent
Expense
|
56
|
Page 3 of the journal contains the following entry:
|
Prepaid
Insurance
|
1,530
|
|
|
Cash
|
|
1,530
|
158. What is the posting reference
that will be found in the cash account?
a. 11
b. 15
c. 3
d. 13
159. What is the posting reference
that will be found in the prepaid insurance account?
a. 11
b. 15
c. 3
d. 13
160. What posting references will be
found in the journal entry?
a. 15, 11
b. 15, 3
c. 11, 3
d. 3, 15
161. The chart of accounts for the
Miguel Company includes the following:
|
Account
Name
|
Account Number
|
|
Cash
|
11
|
|
Accounts
Receivable
|
13
|
|
Prepaid
Insurance
|
15
|
|
Accounts
Payable
|
21
|
|
Unearned
Revenue
|
24
|
|
Miguel,
Capital
|
31
|
|
Miguel,
Drawing
|
32
|
|
Fees
Earned
|
41
|
|
Salaries
Expense
|
54
|
|
Rent
Expense
|
56
|
Page 3 of the journal contains the following transaction:
|
Cash
|
640
|
|
|
Fees
Earned
|
|
640
|
What posting references will be
found in the journal entry?
a. 41, 3
b. 3, 11
c. 11, 41
d. 11, 3
162. The chart of accounts for the
Miguel Company includes the following:
|
Account
Name
|
Account Number
|
|
Cash
|
11
|
|
Accounts
Receivable
|
13
|
|
Prepaid
Insurance
|
15
|
|
Accounts
Payable
|
21
|
|
Unearned
Revenue
|
24
|
|
Miguel,
Capital
|
31
|
|
Miguel,
Drawing
|
32
|
|
Fees
Earned
|
41
|
|
Salaries
Expense
|
54
|
|
Rent
Expense
|
56
|
Page 5 of the journal contains the following transaction:
|
Salaries
Expense
|
525
|
|
|
Cash
|
|
525
|
What is the posting reference that will be found in the
salaries expense account?
a. 5
b. 11
c. 54
d. 21
163. Proof that the dollar amount of
the debits equals the dollar amount of the credits in the ledger means
a. all
of the
information from the journal was correctly transferred to the ledger
b. all
accounts have
their correct balances in the ledger
c. only
the journal is
accurate; the ledger may be incorrect
d. only
that the debit
dollar amounts equal the credit dollar amounts
164. That the total dollar amount of
the debits equal the total dollar amount of the credits in the ledger accounts
can beverified through a(n):
a. chart of accounts
b. trial balance
c. income statement
d. balance sheet
165. 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 orCredit column of the trial balance.
(3)
List
the name of the company, the title of the trial balance, and the date the trial
balanceis prepared.
(4)
Total
the Debit and Credit columns of the trial balance.
What is the proper order of these steps?a. (3), (2), (4),
(1)
b. (2), (3), (4), (1)
c. (3), (2), (1), (4)
d. (4), (3), (2), (1)
166. A trial balance is prepared to
a. prove that there were no errors made
in recording transactions into the journal
b. prove that no errors were made
in posting to the ledger
c. prove that each account balance
is correct
d. discover errors that affect the
equality of debits and credits
167. The accounts in the ledger of
Monroe Entertainment Co. are listed below.
All accounts have normal balances.
|
Accounts
Payable
|
$1,500
|
Fees
Earned
|
$3,600
|
|
Accounts Receivable
|
1,800
|
Insurance Expense
|
1,300
|
|
Prepaid Insurance
|
2,000
|
Land
|
3,000
|
|
Cash
|
3,200
|
Wages Expense
|
1,400
|
|
Drawing
|
1,200
|
Capital
|
8,800
|
Prepare a trial balance.
The total of the debits isa. $13,900
b. $11,200
c. $12,700
d. $9,700
168. Of the following, which is an
internal report that will determine if debit balances equal credit balances in
theledger?
a.
chart
of accounts
b.
income
statement
c.
trial
balance
d.
account
reconciliation
169. An overpayment error was
discovered in computing and paying the wages of a Jamison Tree
Trimmingemployee. When Jamison receives
cash from the employee for the amount of the overpayment, which of thefollowing
entries will Jamison make?
a. Cash, debit; Wages Expense,
credit
b. Wages Payable, debit; Wages
Expense, credit
c. Wages Expense, debit, Cash,
credit
d. Cash, debit; Wages Payable,
credit
170. If the two totals of a trial
balance are not equal, it could be due to
a. failure to record a transaction
b. recording the same erroneous
amount for both the debit and the credit parts of a transaction
c. an error in determining the
account balances, such as a balance being incorrectly computed
d. recording the same transaction
more than once
171. When a transposition error is
made on the trial balance, the difference between the debit and credit totals
on thetrial balance will be
a. zero
b. twice the amount of the
transposition
c. one-half the amount of the
transposition
d. divisible by 9
172. Which of the following errors,
each considered individually, would cause the trial balance totals to be
unequal?
a. A transaction was not posted.
b. A payment of $67 for insurance
was posted as a debit of $76 to Prepaid Insurance and a credit of $76 toCash.
c. A payment of $4,450 to a
creditor was posted as a debit of $4,500 to Accounts Payable and a credit of
$450to Cash.
d. Cash received from customers on
account was posted as a debit of $720 to Cash and a credit of $720 toAccounts
Payable.
173. Which of the following errors
will cause the trial balance totals to be unequal?
a. posting the debit portion of a
journal entry incorrectly when the credit portion of the entry is correctly
posted
b. failure to record a transaction
or to post a transaction
c. recording the same transaction
more than once
d. recording the same erroneous
amount for both the debit and the credit parts of a transaction
174. The trial balance is out of
balance and the accountant suspects that a transposition or slide error
hasoccurred. What will the accountant do
to confirm this suspicion?
a. Determine the amount of the
error and look for that amount on the trial balance.
b. Determine the amount of the
error and divide by two, then look for that amount on the trial balance.
c. Determine the amount of the
error and refer to the journal entries for that amount.
d. Determine the amount of the
error and divide by nine. If the result is evenly divided, then this type of
error islikely.
175. The purchase of supplies on
account was recorded and posted as a debit to Supplies for $500 and a credit toAccounts
Receivable for $500. The correcting
entry would include a:
a.
credit
to Accounts Receivable for $500 b. credit
to Accounts Receivable for $1,000
c.
credit
to Accounts Payable for $500 d.
credit to Accounts Payable for $1,000
176. Which of the following is nota
useful step in finding errors on the trial balance?
a. Determine the difference between
debits and credits and look for the amount.
b. Determine the difference between
debits and credits and change any account to make the trial balancecorrect.
c. Determine the difference between
debits and credits, divide the amount by 2, and look for the amount.
d. Determine the difference between
debits and credits, divide the amount by 9, and if it divides evenly, look fora
transposition or slide error.
177. All of the following statements
regarding a horizontal analysis are true except:
a. A horizontal analysis is used to
compare an item in a current statement with the same item in priorstatements.
b. A horizontal analysis can be
performed on a balance sheet and income statement, but not on a statement
ofcash flows.
c. If fees earned in Year 1 are
$125,000 and fees earned in Year 2 are $143,750, a horizontal analysis
willindicate a 15% increase over this period.
d. When two statement s are
compared in horizontal analysis, the earlier statement is used as the base
forcomputing the amount and the percent of change.
178. McNally Industries has a
condensed income statement as shown.
|
|
Year 2
|
Year 1
|
|
Sales
|
$198,000
|
$165,500
|
|
Total
operating expenses
|
163,000
|
147,500
|
|
Net
income
|
35,000
|
18,000
|
Using horizontal analysis,
calculate the amount and percent change for sales. Round to one decimal place.
a. $32,500, 19.6% b. $18,000, 10.9%
c. $35,000, 17.7% d. $17,000, 9.4%
179. Richardson Company has a
condensed income statement as shown.
|
|
Year
2
|
Year
1
|
|
Sales
|
$150,000
|
$165,500
|
|
Total
operating expenses
|
133,000
|
147,500
|
|
Net
income
|
17,000
|
18,000
|
Using horizontal analysis,
calculate the amount and percent change for sales. Round to one decimal place.
a. $(17,000), (11.3%) b. $(15,500), (10.3%)
c. $(18,000), (10.9%) d. $(15,500), (9.4%)
180. The chart of accounts classifies
the accounts to make identification of the accounts easier. Describe the
numberingsystem businesses use in setting up the chart of accounts.
181. On January 1, Cassie Harris established
a catering service. Listed below are
accounts she would like to open inthe general ledger. List the accounts in the
order in which they should appear in the ledger and propose a two digitaccount
numbering scheme that is consistent with the rules of a proper chart of
accounts.
1.
Cash
2.
Supplies
3.
Equipment
4.
Accounts
Payable
5.
Cassie
Harris, Capital
6.
Wages
Expense
7.
Rent
Expense
8.
Truck
9.
Utilities
Expense
10.
Cassie
Harris, Drawing
11.
Truck
Expense
12.
Prepaid
Insurance
13.
Fees
Earned
14.
Miscellaneous
Expense
15.
Insurance
Expense
16.
Notes
Payable
17.
Accounts
Receivable
182. On January 31, the cash account
balance was $96,750. During January,
cash receipts totaled $305,000 and cashpayments totaled was $375,880. Determine the cash balance on January 1.
183. Organize the following accounts
into the usual sequence of a chart of accounts.
Miscellaneous ExpenseAccounts PayableAccounts ReceivableCash
Alecia Morris, CapitalFees Earned
Prepaid RentSalaries ExpenseUnearned Revenue
Alecia Morris, Drawing
184. Calculate the following:
(a)
Determine
the cash receipts for April based on the following data:
|
Cash
payments during April
|
$63,000
|
|
Cash account balance, April 1
|
25,500
|
|
Cash account balance, April 30
|
31,750
|
(b)
Determine
the cash received from customers on account during April based onthe following data:
Accounts receivable account
balance, April 1 $22,500
Accounts receivable account
balance, April 30 15,250
Fees billed to
customers during April 45,000
185. Selected accounts from the
ledger of Garrison Company appear below.
For each account, indicate the following:
(a) In the first column at the
right, indicate the nature of each account, using thefollowing abbreviations:
Asset - A Revenue - R
Liability - L Expense - E
None of the above - N
(b)
In
the second column, indicate the increase side of each account by insertingDr.
or Cr.
|
|
Account
|
Type of Account
|
Increase Side
|
|
(1)
|
Supplies
|
_______
|
________
|
|
(2)
|
Notes Receivable
|
_______
|
________
|
|
(3)
|
Fees Earned
|
_______
|
________
|
|
(4)
|
Garrison, Drawing
|
_______
|
________
|
|
(5)
|
Accounts Payable
|
_______
|
________
|
|
(6)
|
Salaries Expense
|
_______
|
________
|
|
(7)
|
Garrison, Capital
|
_______
|
________
|
|
(8)
|
Accounts Receivable
|
_______
|
________
|
|
(9)
|
Equipment
|
_______
|
________
|
|
(10)
|
Notes Payable
|
_______
|
________
|
|
186. All nine transactions for Dalton
Survey Company for September, the first month of operations, are recorded in
thefollowing T accounts:
|
Cash
|
|
Michael Dalton, Capital
|
||||||
|
(1)
|
20,000
|
(3)
|
7,500
|
|
|
|
(1)
|
20,000
|
|
(7)
|
6,900
|
(5)
|
2,600
|
|
|
|
|
|
|
(9)
|
4,700
|
(6)
|
5,500
|
|
|
|
|
|
|
|
|
(8)
|
2,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts Receivable
|
|
Michael Dalton, Drawing
|
||||||
|
(4)
|
4,900
|
(9)
|
4,700
|
|
(8)
|
2,000
|
|
|
|
Supplies
|
|
Fees Earned
|
||||||
|
(3)
|
7,500
|
|
|
|
|
|
(4)
|
4,900
|
|
|
|
|
|
|
|
|
(7)
|
6,900
|
|
Equipment
|
|
Operating Expense
|
||||||
|
(2)
|
4,500
|
|
|
|
(6)
|
5,500
|
|
|
|
Accounts Payable
|
|
|
||||||
|
(5)
|
2,600
|
(2)
|
4,500
|
|
|
|
|
|
Indicate the following for each debit and each credit:
(a)
The
type of account affected (asset, liability, capital, drawing, revenue,
orexpense).
(b)
The
effect on the account, using "+" for increase and "−" for
decrease.
Present your answers in the
following form:
Account Debited Account Credited
Transaction Type Effect Type Effect
187. On June 1, the cash account
balance was $96,750. During June, cash
receipts totaled $305,000 and the June 30balance was $75,880. Determine the cash payments made during June.
188. On September 1, Erika Company
purchased land for $47,500 cash. Provide the journal entry for this
transaction.
189. On October 10, Nikle Company
purchased supplies for $1,800 on account. On October 25, Nikle Company paid
theinvoice.
(a) Provide the journal entry for the purchase on account.
(b) Provide the journal entry for the payment of the
invoice.
190. On October 17, Nikle Company
purchased a building and a plot of land for $750,000. The building was valued
at
$500,000 while the land carried a value of $250,000. Nikle
paid $300,000 down in cash and signed a note payablefor the balance. Provide
the journal entry for this transaction.
191. On November 1, Nikle Company
made a cash payment of $200,000 on a note payable that was generated in thepurchase
of a building and land. Provide the journal entry for this transaction.
192. On January 7, Damien Lawson
invests $45,000 to initiate the operation of his business, JumpStart. Provide
thejournal entry for this transaction.
193. On January 8, Damien Lawson transfers
ownership of several pieces of office equipment to his new business,JumpStart.
When new, these items were worth $72,500. The fair market value of the
equipment is $60,000.Journalize this transfer.
194. On August 30, JumpStart incurred
the following expenses:
Payment to the landlord for
August rent - $2,300
Payment to the Gas
& Electric Company for August’s bill $525Payment of employee wages for
the last half of August - $1,750Payment of shopping center’s parking lot
cleaning fee $275
Journalize these payments as one compound journal entry.
- Measurement
BUSPROG: Analytic
195. On October 30, Damien Lawson
withdraws $3,330 from JumpStart for personal use. Journalize this event.
196. For the following, mark a “D” if
the following account normally has a debit balance and mark a “C” if the
followingaccount normally has a credit balance.
1. Notes Payable
2. Mortgage Payable
3. Drawing
4. Accounts Receivable
5. Capital
6. Rent Revenue
7. Unearned Income
8. Utility Expense
9. Automobiles
197. Several transactions are listed
below, with the accounting equation stated to the right side of each. Use
thefollowing identification codes to indicate the effects of each transaction
on the accounting equation. Write youranswers in the space provided under the
accounting equation. You need an identification code for eachelement ofthe accounting
equation. An example is given before the first transaction.
I-Increase D-Decrease NE-No Effect
|
|
|
Assets
|
=
|
Liabilities
|
+
|
Owner’s Equity
|
|
Example
|
John Smith invests in his new business by giving it his personal
drill press valued at $3,500.
|
I
|
|
NE
|
|
I
|
|
A)
|
Cash sales are made.
|
|
|
|
|
|
|
B)
|
Equipment is purchased on credit.
|
|
|
|
|
|
|
C)
|
Payment is made for the equipment purchased on credit in (B).
|
|
|
|
|
|
|
D)
|
The company sold excess supplies to another company on credit.
|
|
|
|
|
|
|
E)
|
Cash is collected from customers for accounts receivable
balances.
|
______
|
|
_____
|
|
______
|
198. Journalize
the following five transactions for Nexium & Associates, Inc. Omit explanations.
March 1 Bills are sent to clients for services
provided in February in theamount of $800.
9 Corner
Office, Inc. delivers office furniture ($1,060) and officesupplies ($160) to
Nexium leaving an invoice for $1,220.
15 Payment
is made to Corner Office, Inc. for the furniture andoffice supplies delivered
on March 9.
23 A
bill for $430 for electricity for the month of March is receivedand will be
paid on its due date in April.
31 Salaries of $850 are paid to employees.
199. Increases and decreases in
various types of accounts are listed below.
In each case, indicate by "Dr." or "Cr." (a)whether
the change in the account would be recorded as a debit or a credit and (b)
whether the normal balance of taccount is a debit or a credit.
(a) (b)
RecordedAsNormalBalance
(1)
Increase
in Denice Dickenson, Capital ________ _______
(2)
Increase
in Denice Dickenson, Drawing ________ _______
(3)
Decrease
in Accounts Receivable ________ _______
(4)
Increase
in Note Payable ________ _______
(5)
Increase
in Accounts Payable ________ _______
(6)
Decrease
in Supplies ________ _______
(7)
Decrease
in Salaries Expense ________ _______
(8)
Increase
in Accounts Receivable ________ _______
(9) Increase in Cash ________ _______
(10) Decrease in Land ________ _______
200. Record the following selected
transactions for April in a two-column journal, identifying each entry by
letter:
(a)
Received
$18,000 from Katie Long, owner.
(b)
Purchased
equipment for $27,000, paying $10,000 in cash and giving a notepayable 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
owner's withdrawal of $1,875.
201. On January 12, JumpStart Co.
purchased $870 in office supplies.
(a) Journalize this transaction as
if JumpStart paid cash.
(b) (1) Journalize this transaction
as if JumpStart placed it on account.
(b) (2) On January 18, JumpStart pays the amount due.
Journalize this event.
202. On November 10, JumpStart Co.
provides $2,900 in services to clients. At the time of service, the clients
paid $600in cash and put the balance on account.
(a) Journalize this event.
(b) On November 20, JumpStart Co.
clients paid an additional $900 on their accounts due. Journalize this event.
(c) Calculate the accounts
receivable balance on November 30.
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203. Prepare a journal entry for the
purchase of a truck on April 4 for $85,700, paying $15,000 cash and the
remainderon account. Omit explanation.
204. Journalize the following
selected transactions for January.
Explanations may be omitted.
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Jan.
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1
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Received
cash from the investment made by the owner, $14,000.
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2
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Received cash for providing accounting services,
$9,500.
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3
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Billed customers on account for providing
services, $4,200.
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4
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Paid advertising expense, $700.
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5
Received
cash from customers on account, $2,500.
6
Owner
withdraws $1,010.
7
Received
telephone bill, $900.
8
Paid
telephone bill, $900.
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Date
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Description
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Post Ref
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Debit
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Credit
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205. 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.(b)(1) Journalize this event as if the
clients had placed this on account.
(b)(2) Assume that the clients paid $1,200 of the amount on
account on December 30. Journalize this transaction.
206. Analyze the following
transactions as to their effect on the accounting equation.
(a)
The
company paid $725 to a vendor for supplies purchased previously on account.
(b)
The
company performed $850 of services and billed the customer.
(c)
The
company received a utility bill for $395 and will pay it next month.
(d)
The
owner of the company withdrew $145 of supplies for personal use.
(e)
The
company paid $315 in salaries to its employees.
(f)
The
company collected $730 of cash from its customers on account.
Some of the possible effects of a transaction on the
accounting equation are listed below:
(1)
Assets,
Dr.; Assets, Cr.
(2)
Assets,
Dr.; Owner's Equity, Cr.
(3)
Assets,
Dr.; Liabilities, Cr.
(4)
Assets,
Dr.; Revenue, Cr.
(5)
Liabilities,
Dr.; Assets, Cr.
(6)
Drawing,
Dr.; Assets, Cr.
(7)
Expense,
Dr.; Assets, Cr.
(8)
Expense,
Dr.; Liabilities, Cr.
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207. Prepare a journal entry on
October 12 for the fees earned on account, $14,600. Omit explanation.
208. Journalize
the five transactions for Mirmax Rentals described below.
August 1 Mirmax
purchases two new saws on credit at $425 each. Thesaws are added to Mirmax’s
rental inventory. Payment is duein 30 days.
8 Mirmax accepts advance deposits for
tool rentals of $125 thatwill be applied to the cash rental when the tools are
returned.
15 Mirmax receives a bill from Macon Utility Company for
$180. Payment is due
in 30 days.
20 Customers are charged $1,250 by
Mirmax for toolrentals. Payment is due
from the customers in 30 days.
31 Mirmax receives $600 in payments
from the customers thatwere billed for rentals on August 20.
209.
The
bookkeeper for Brockton Industries prepared the following journal entries and
posted the entries to the generalledger as indicated in the T accounts
presented. Assume that the dollar amounts and the descriptions of the
entriesare correct.
July 3 Accounts
Receivable 1,000
Service Revenue 1,000
Customers were billed for servicescompleted.
11
Cash 500
Accounts Receivable 500
Payment is received from a customerbilled for services on
July 3.
12
Office
Supplies 600
Accounts Payable 600
Purchased office supplies on credit;payment is due in 30
days.
25 Office Furniture 700
Cash 700
Payment is made for office furniturereceived on July 25.
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7/3
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1,000
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7/3
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1,000
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7/11
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500
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7/12
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600
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7/11
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500
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7/25
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700
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7/12
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600
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7/25
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700
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Required: If you assume that all journal entries have
been recorded correctly, use the above information to:
(1)
Identify
the postings to the general ledger that were made incorrectly.
(2) Describe how the each incorrect
posting should have been made.
210. State for each account whether
it is likely to have (a) debit entries only, (b) credit entries only, or (c)
both debit andcredit entries when recording business transactions during the
month. Also, indicate the normal balance
of eachaccount.
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1.
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Fees
Earned
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4.
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Supplies
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2.
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Utilities Expense
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5.
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Cash
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3.
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Accounts Payable
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6.
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Accounts Receivable
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211. On January 1, Merry Walker
established a catering service. Listed
below are accounts to use for transactions (a)through (d), each identified by a
number. Following this list are the
transactions that occurred during the first monthof operations. You are to indicate for each transaction the
accounts that should be debited and credited by placingthe account number(s) in
the appropriate box.
1.
Cash
2.
Accounts
Receivable
3.
Supplies
4.
Prepaid
Insurance
5.
Equipment
6.
Truck
7.
Notes
Payable
8.
Accounts
Payable
9.
Merry
Walker, Capital
10.
Merry
Walker, Drawing
11.
Fees
Earned
12.
Wages
Expense
13.
Rent
Expense
14.
Utilities
Expense
15.
Truck
Expense
16.
Miscellaneous
Expense
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Transactions
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Account(s)
Debited
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Account(s)
Credited
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a. Merry transferred cash froma personal bank
account to anaccount to be used for thebusiness.
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b. Paid rent for the period of January3 to the
end of the month.
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c. Purchased truck for $30,000 witha cash down
payment of $5,000and the remainder on a note.
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d. Purchased equipment on
account.
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212. On January 1, Merry Walker
established a catering service. Listed
below are accounts to use for transactions (a)through (e), each identified by a
number. Following this list are the
transactions that occurred in Walker’s firstmonth of operation. You are to indicate for each transaction the
accounts that should be debited and credited byplacing the account number(s) in
the appropriate box.
1.
Cash
2.
Accounts
Receivable
3.
Supplies
4.
Prepaid
Insurance
5.
Equipment
6.
Truck
7.
Notes
Payable
8.
Accounts
Payable
9.
Merry
Walker, Capital
10.
Merry
Walker, Drawing
11.
Fees
Earned
12.
Wages
Expense
13.
Rent
Expense
14.
Utilities
Expense
15.
Truck
Expense
16.
Miscellaneous
Expense
17.
Insurance
Expense
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Transactions
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Account(s)
Debited
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Account(s)
Credited
|
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a. Purchased supplies for cash.
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b. Paid the annual premiums onproperty and
casualty insurance.
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c. Received cash for a job previouslyrecorded
on account.
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d. Paid a creditor a portion of
theamount owed for equipmentpreviously purchased on account.
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e. Received cash for a completedjob.
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213. On January 1, Merry Walker
established a catering service. Listed
below are accounts to use for transactions (a)through (f), each identified by a
number. Following this list are the
transactions that occurred in Walker’s firstmonth of operations. You are to indicate for each transaction the
accounts that should be debited and credited byplacing the account number(s) in
the appropriate box.
1.
Cash
2.
Accounts
Receivable
3.
Supplies
4.
Prepaid
Insurance
5.
Equipment
6.
Truck
7.
Notes
Payable
8.
Accounts
Payable
9.
Merry
Walker, Capital
10.
Merry
Walker, Drawing
11.
Fees
Earned
12.
Wages
Expense
13.
Rent
Expense
14.
Utilities
Expense
15.
Truck
Expense
16.
Miscellaneous
Expense
17.
Insurance
Expense
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Transactions
|
Account(s)
Debited
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Account(s)
Credited
|
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a. Recorded jobs completed onaccount and sent
invoices tocustomers.
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b. Received an invoice for truckexpenses to be
paid in February.
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c. Paid utilities expense
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d. Received cash from customers
onaccount.
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e. Paid employee wages.
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f. Withdrew cash for personal use.
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214.
Listed
below are accounts to use for transactions (a) through (d), each identified by
a number. Following this listare the transactions. You are to indicate for each
transaction the accounts that should be debited and credited byplacing the
account number(s) in the appropriate box.
1.
Cash
2.
Accounts
Receivable
3.
Office
Supplies
4.
Land
5.
Interest
Receivable
6.
Building
7.
Accumulated
Depreciation - Building
8.
Depreciation
Expense - Building
9.
Accounts
Payable
10.
Interest
Payable
11.
Insurance
Payable
12.
Utilities
Expense
13.
Notes
Payable
14.
Prepaid
Insurance
15.
Service
Revenue
16.
Owner,
Capital
17.
Insurance
Expense
18.
Interest
Expense
19.
Office
Supplies Expense
20.
Unearned
Service Revenue
21.
Owner,
Drawing
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Transactions
|
Account(s)
Debited
|
Account(s)
Credited
|
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a. Utility bill is received;
payment willbe made in 10 days.
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b. Paid the utility bill
previouslyrecorded in transaction (a).
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c. Bought a three-year
insurancepolicy and paid in full.
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d. Received $7,000 from a
contract toperform accounting services over thenext two years.
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215. The following two situations are
independent of each other.
1.
On
June 1, the cash account balance was $45,750.
During June, cash payments totaled $243,910, and the June30 balance was
$53,200. Determine the cash receipts
during June and show your calculation.
2. On March 1, the supplies account
balance was $1,800. During March,
supplies of $2,450 were purchased,and $630 of supplies were on hand as of March
31. Determine the supplies expense for
March and show yourcalculation.
216. Journalize the entries to
correct the following errors:
(a)
A
purchase of supplies for $500 on account was recorded and posted as a debit
toSupplies for $200 and as a credit to Accounts Receivable for $200.
(b)
A
receipt of $2,500 from Fees Earned was recorded and posted as a debit to
FeesEarned for $2,500 and a credit to Cash for $2,500.
217. On November 30, Damien Lawson is
informed by his accountant that $550 of a transaction recording the purchaseof
office supplies was really office equipment. Prepare the journal entry to
correct this situation.
218. The following errors took place
in journalizing and posting transactions:
a.
A
withdrawal of $5,000 by Stan Norton, owner of the business, was recordedas a
debit to Office Expense and a credit to Cash.
b.
Accounts
receivable payment for $7,800 was recorded as a debit to Cash and acredit to
Fees Earned.
Journalize the entries to correct the errors. Omit the explanations.
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