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Exam 2: Analyzing Transactions

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Question 101

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

A) True
B) False

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Question 102

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Expenses can result from

A) increasing owner's equity
B) consuming services
C) using up liabilities
D) purchasing assets

E) A) and D)
F) A) and C)

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Question 103

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The process of transferring the debits and credits from the journal entries to the accounts is known as posting.

The posting process will include the transfer of which of the following data from the journal to the ledger?

Randomly listed below are the steps for preparing a trial balance: (1) Verify that the total of the Debit column equals the total of the Credit column. (2) List the accounts from the ledger and enter their debit or credit balance in the Debit or Credit column of the trial balance. (3) List the name of the company, the title of the trial balance, and the date the trial balance is prepared. (4) Total the Debit and Credit columns of the trial balance.​What is the proper order of these steps?

For each of the following errors, considered individually, indicate whether the error would cause the trial balance totals 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 withdrawal of $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.

Which of the following entries records the acquisition of office supplies on account?

Which of the following entries records the investment of cash by Taylor Thomas, owner of a proprietorship?

Journalizing is the process of entering amounts in the ledger.

On October 10, Nickle Company purchased supplies for $1,800 on account. On October 25, Nickle Company paid the invoice. (a) Provide the journal entry for the purchase on account. (b) Provide the journal entry for the payment of the invoice.

Depending on the account title, the right side of the account is referred to as the credit side.

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

Analyze the following transactions as to their effect on the accounting equation. (a)The company paid $725 to a vendor for supplies purchased previously on account. (b)The company performed $850 of services and billed the customer. (c)The company received a utility bill for $395 and will pay it next month. (d)The owner of the company withdrew $145 of supplies for personal use. (e)The company paid $315 in salaries to its employees. (f)The company collected $730 of cash from its customers on account.​Some of the possible effects of a transaction on the accounting equation are listed below​ Put the appropriate letter next to each transaction.

Which of the following entries records the receipt of cash for two months' rent? The cash was received in advance of providing the service.

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

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

Match each of the following accounts with its proper account group from the groups listed below. ​ -Patents

A debit signifies a decrease in

Prepare a journal entry for the purchase of a truck on April 4 for $85,700, paying $15,000 cash and the remainder on account. Omit explanation.

Journalize the following five transactions for Nexium & Associates, Inc. Omit explanations.Mar.1Bills are sent to clients for services provided in February in the amount of $800.9Corner Office, Inc. delivers office furniture ($1,060) and office supplies ($160) to Nexium leaving an invoice for $1,220.15Payment is made to Corner Office, Inc. for the furniture and office supplies delivered on March 9.23A bill for $430 for electricity for the month of March is received and will be paid on its due date in April.31Salaries of $850 are paid to employees.