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Exam 2: Analyzing Transactions

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Question 51

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Normal account balances are on the increase side of the accounts.

A) True
B) False

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Question 52

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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

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

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Question 53

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A group of related accounts that make up a complete unit is called a trial balance.

The stockholders' equity will be reduced by all of the following except

Journalize the entries to correct the following errors: a) A purchase of supplies for $500 on account was recorded and posted as a debit to Supplies 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 Fees Earned for $2,500 and a credit to Cash for $2,500.

Prepaid expenses are an example of an expense.

Prepare a trial balance, listing the following accounts in proper sequence. The accounts all normal balances) were taken from the ledger of Sophie Designs Co. on April 30. $\begin{array} { l r l r } \text { Accounts Payable } & \$ 4,100 & \text { Rent Expense } & \$ 11,500 \\\text { Accounts Receivable } & 3,450 & \text { Salary Expense } & 14,000 \\\text { Cash } & 6,700 & \text { Fees Earned } & 45,425 \\\text { Common Stock } & 17,800 & \text { Supplies } & 3,125 \\\text { Dividends } & 7,500 & \text { Supplies Expense } & 1,700 \\\text { Equipment } & 14,500 & \text { Utilities Expense } & 4,000 \\\text { Miscellaneous Expense } & 850 & &\end{array}$

Joshua Scott invests $40,000 into his new business. How would this transaction be entered in the journal in good form?

The Posting Reference columns are used to trace transactions from the accounts to the journal. What will be entered in the Posting Reference column of 1) the journal and 2) the account?

Debiting the cash account will increase the account.

Which of the following is not considered to be a liability?

Depending on the account title, the right side of the account is referred to as the credit side.

$\begin{array} { | c | l | c | l | l | l | } \hline \text { April } & 14 & \text { Equipment } & & 15,000 & \\\hline & & \text { Cash } & & & 5,000 \\\hline & & \text { Note Payable } & & & 10,000 \\\hline & & ? ? ? ? ? ? ? ? ? ? ? & & & \\\hline\end{array}$ Which is the best explanation for this journal entry?

The is where a transaction can first be found in the accounting records.

Exhibit 2-1 All nine transactions for Ralston Sports Co. for September, the first month of operations, are recorded in the following T accounts: -Refer to Exhibit 2-1. Prepare a trial balance, listing the accounts in their proper order.

If the trial balance is in balance, it can be assumed that all journal entries were posted correctly and no errors were made.

a) List the errors in the following trial balance. All accounts have normal balances. b)What would be the new totals of the trial balance after errors are corrected? What would be the balance of Accounts Receivable?

Which of the following groups of accounts are increased with a debit?

In which order are the accounts listed in the chart of accounts?

On January 1, Cassie Harris and other stockholders established a catering service. Listed below are accounts she would like to open in the general ledger. List the accounts in the order in which they should appear in the ledger and propose a two digit account numbering scheme that is consistent with the rules of a proper chart of accounts. 1. Cash 2. Supplies 3. Equipment 4. Accounts Payable 5. Common Stock 6. Wages Expense 7. Rent Expense 8. Truck 9. Utilities Expense 10. Dividends 11. Truck Expense 12. Prepaid Insurance 13. Fees Earned 14. Miscellaneous Expense 15. Insurance Expense 16. Notes Payable 17. Accounts Receivable