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Exam 2: Analyzing Transactions

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Question 31

True/False

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Journalizing a transaction with both the debit and the credit for $69 instead of $96 will cause the trial balance to be out of balance.

A) True
B) False

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Question 32

Multiple Choice

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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?

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

E) A) and B)
F) A) and C)

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Question 33

Multiple Choice

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Of the following,which is true about assets?

The process of transferring the debits and credits from the journal entries to the accounts is called

The normal balance of a stockholders' equity account is a debit.

The accounts in the ledger of Monroe Entertainment Co.are listed below.All accounts have normal balances. $\begin{array}{lclr}\text { Accounts Payable } & \$ 1,500 & \text { Fees Earned } & \$ 3,600 \\\text { Accounts Receivable } & 1,800 & \text { Insurance Expense } & 1,300 \\\text { Prepaid Insurance } & 2,000 & \text { Land } & 3,000 \\\text { Cash } & 3,200 & \text { Wages Expense } & 1,400 \\\text { Dividends } & 1,200 & \text { Common Stock } & 8,800\end{array}$ Prepare a trial balance.The total of the debits is

The T account got its name because it resembles the letter "T."

Journalize the following five transactions for Nexium & Associates,Inc.Omit explanations.

The bookkeeper for Brockton Industries prepared the following journal entries and posted the entries to the general ledger as indicated in the T accounts presented.Assume that the dollar amounts and the descriptions of the entries are correct. 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 each incorrect posting should have been made.

A chart of accounts is

The right hand side of a T account is known as a debit and the left hand side is known as a credit.

The gross increases in stockholders' equity attributable to business activities are called

Accounts are records of increases and decreases in individual financial statement items.

The chart of accounts classifies the accounts to make identification of the accounts easier.Describe the numbering system businesses use in setting up the chart of accounts.

Richardson Company has a condensed income statement as shown. $\begin{array}{|l|r|r|}\hline & \text { Year 2 } & {\text { Year } 1} \\\hline \text { Sales } & \$ 150,000 & \$ 165,500 \\\hline \text { Total operating expenses } & 133,000 & 147,500 \\\hline \text { Net income } & 17,000 & 18,000\\\hline\end{array}$ Using horizontal analysis,calculate the amount and percent change for sales.Round to one decimal place.

In the chart of accounts,each account number has two digits.The first digit indicates the major account group to which the account belongs.Which of the following correctly identifies the major account groups typically represented by the numbers 1 through 5?

Which of the following applications of the rules of debit and credit is true?

A trial balance is prepared to

For each of the following errors,considered individually,indicate whether the error would cause the trial balance tot to be unequal.If the error would cause the trial balance totals to be unequal,indicate whether the debit or credit total is higher and by how much. A.Payment of a cash dividend $6,800 was journalized and posted as a debit of $8,600 to Salaries Expense and a credit of $8,600 to Cash. B.A fee of $9,780 earned was debited to Accounts Receivable for $7,980 and credited to Fees Earned for $9,780. C.A payment of $3,000 to a creditor was posted as a credit of $3,000 to Accounts Payable and a credit of $3,000 to Cash.

Transactions are listed in the journal chronologically.