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Exam 2: Analyzing Transactions

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Question 81

Multiple Choice

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The chart of accounts for the Corning Corporation includes the following: On journal page 3, the following transaction was found: What is the posting reference that will be found in the Prepaid Insurance account?

A) 11
B) 15
C) 3
D) none of these

E) A) and B)
F) B) and D)

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Question 82

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

A) True
B) False

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Question 83

Multiple Choice

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

On October 30th, JumpStart paid its only stockholder, Damien Lawson, a $3,300 cash dividend. Journalize this event.

The normal balance of the dividends account is a debit.

An overpayment error was discovered in computing and paying the wages of a Jamison Tree Trimming employee. When Jamison receives cash from the employee for the amount of the overpayment, which of the following entries will Jamison make?

On October 17th, 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. Prepare the journal entry to record this transaction.

On September 1st, Erika Company purchased land for $47,500 cash. Prepare the journal entry to record this transaction.

The chart of accounts for Miguel Corporation includes the following: On journal page 3, the following transaction was found: $\begin{array}{|l|l|l|}\hline & 640 & \text { Cash } \\\hline 640 & & \text { FeesEarned } \\\hline\end{array}$ What are the posting references that will be found in the journal entry?

Prepare a journal entry on March 27 for the payment of $8,000 in dividends.

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

The balance of the account is determined by

In which of the following types of accounts are decreases recorded by credits?

The chart of accounts should be the same for each business.

In which of the following types of accounts are decreases recorded by debits?

Journal entries can have more than two accounts as long as the debits equal the credits.

A cash payment is recorded on the cash account as a

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, 2010.

Accounts payable are accounts that you expect will be paid to you.

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