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Exam 2: Analyzing Transactions

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Question 121

True/False

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Journalizing transactions using the double-entry bookkeeping system will eliminate fraud.

A) True
B) False

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Question 122

Multiple Choice

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Several types of errors can be made during the journalizing and posting process. Match the following with their best description. -Balance entered on wrong side of account

A) Trial balance preparation errors
B) Account balance errors
C) Posting errors
Challenging

D) All of the above
E) B) and C)

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Question 123

Multiple Choice

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Proof that the dollar amount of the debits equals the dollar amount of the credits in the ledger means

Journal entries include both debit and credit accounts for each transaction.

All nine transactions for Dalton Survey Company for September, the first month of operations, are recorded in the following T accounts:​ ​ ​ ​ ​ Indicate the following for each debit and credit: (a)The type of account affected (asset, liability, capital, drawing, revenue, or expense). (b)The effect on the account, using "+" for increase and "−" for decrease.​Present your answers in the following form:

Which of the following entries records the payment of an account payable?

On January 1, Cassie Harris 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.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

For the following, mark a "D" if the following account normally has a debit balance and mark a "C" if the following account 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

Which group of accounts is comprised of only assets?

A credit may signify a

Accounts in the ledger are usually maintained in alphabetical order.

The balance of an account can be determined by adding all of the debits, adding all of the credits, and adding the amounts together.

Journalize the five transactions for Mirmax Rentals described below.

Office supplies purchased by Janer's Cleaning Service on account were returned. Which of the following entries for Janer's Cleaning Service records this transaction?

Set up T accounts for Cash; Accounts Receivable; Supplies; Accounts Payable; Clay Potter, Capital; Clay Potter, Drawing; Professional Fees; and Operating Expenses. (a)In the T accounts, record the following transactions of Potter Pool Services for June, identifying each entry by number: (1)Potter invested $12,500 cash in the business. (2)Purchased supplies on account, $6,250. (3)Paid operating expenses, $5,500. (4)Billed clients for fees, $7,440. (5)Received cash from cash clients, $4,700. (6)Paid creditors on account, $1,400. (7)Received $3,100 from clients on account. (8)Withdrew $1,500 cash for personal use. (b)Prepare a trial balance as of June 30 for Potter Pool Services. (c)Assuming that supplies expense (which has not been recorded) amounts to $1,500 for June, determine the following: (1)Net income for the month. (2)Owner's equity as of June 30.

Several types of errors can be made during the journalizing and posting process. Match the following with their best description. -Debit posted as credit, or vice versa

The normal balance of revenue accounts is a credit.

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 first month of operation. You are to indicate for each transaction the accounts that should be debited and credited by placing 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​