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Exam 2: Analyzing Transactions

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Question 91

Multiple Choice

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The accounts in the ledger of Monroe Entertainment Co. are listed below. All accounts have normal balances. Total assets are

A) $10,000
B) $8,000
C) $9,700
D) $9,800

E) None of the above
F) A) and B)

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Question 92

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The Unearned Revenues account is an example of a liability.

A) True
B) False

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Question 93

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The order of the flow of accounting data is 1) record in the ledger, 2) record in the journal, 3) prepare the financial statements.

Record the following selected transactions for April in a two-column journal, identifying each entry by letter: a) Received $18,000 from sale of common stock. b) Purchased equipment for $27,000, paying $10,000 in cash and giving a note payable 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 dividends of $1,875.

The accounts payable account is listed in the chart of accounts as an asset.

The totals at the bottom of the trial balance and the totals at the bottom of the balance sheet both show equality and balancing, and therefore should be equal.

A proof of the equality of debits and credits in the ledger at the end of an accounting period is called a balance sheet.

For a month's transactions for a typical medium-sized business, the salary expense account is likely to have only credit entries.

Which of the following entries records the collection of cash from cash customers?

Expenses follow the same debit and credit rules as

Several types of errors can be made during the journalizing and posting process. Match the following with their best description. -Balance entered in wrong column or omitted.

Assets are increased with debits and decreased with credits.

The classification and normal balance of the dividends account is

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 payable for the balance. Provide the journal entry for this transaction.

Which of the following groups of accounts have a normal debit balance?

Which of the following accounts are debited to record increases?

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

Which of the following errors could cause the trial balance totals to be unequal?

Consuming goods and services in the process of generating revenues results in expenses.

On June 1, the cash account balance was $96,750. During June, cash receipts totaled $305,000 and the June 30 balance was $75,880. Determine the cash payments made during June.