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Exam 2: Analyzing Transactions

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Question 101

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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

E) All of the above
F) A) and B)

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Question 102

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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.

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11 Cash
12 Accounts Receivable
13 Suppli...

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Question 103

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The chart of accounts for Corning Company includes the following: ​ Page 3 of the journal contains the following entry: -What is the posting reference that will be found in the prepaid insurance account?

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

On December 1,JumpStart 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)Journalize this event as if the clients had placed this on account.​ (c)Assume that the clients paid $1,200 of the amount on account on December 30.Journalize this transaction.

Which are the parts of the T account?

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.

For each of the following accounts, indicate whether its normal balance is on the credit side or the debit side of the T account. -John Smith,Capital

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

Transactions are initially entered into a record called a journal.

The erroneous arrangement of digits,such as writing $45 as $54,is called a slide.

Which of the following entries records the withdrawal of cash by Sally Anderson,owner of a proprietorship,for personal use?

Gently Laser Clinic purchased laser equipment for $8,500 and paid $2,250 down,with the remainder to be paid later.The correct entry would be

Revenue accounts are increased by credits.

The classification and normal balance of the accounts payable account are

Even when a trial balance is in balance,there may be errors in the individual accounts.

A notation in the Post.Ref.column of the general journal indicates that the amount has been posted to the ledger.

State for each account whether it is likely to have (a)debit entries only, (b)credit entries only,or (c)both debit and credit entries when recording business transactions during the month.Also,indicate the normal balance of each account.1.Fees Earned4.Supplies2.Utilities Expense5.Cash3.Accounts Payable6.Accounts Receivable

The process of initially recording a business transaction is called

A drawing account represents the amount of withdrawals made by the owner.