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Exam 3: The Accounting Information System

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Question 111

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Which of the following are the same under both GAAP and IFRS?

A) The account.
B) Debit and credit rules.
C) Steps in the recording process.
D) All of these answer choices are correct.

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

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Question 112

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For each item below, indicate whether a debit or credit applies.

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Question 113

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Some of the following errors would cause the debit and credit columns of the trial balance to have unequal totals. For each of the four cases, state whether the error would cause unequal totals in the trial balance. If the error causes unequal totals, indicate the amount of difference between the columns and state whether the debit or credit is larger. Each case is to be considered independently of the others. 1. A collection on account of $400 was journalized and posted as a debit to Cash $400 and a credit to Service Revenue $400. 2. A $950 purchase of supplies on account was recorded as a debit of $950 to Equipment and a credit of $950 to Accounts Payable. 3. A purchase of equipment for $3,500 on account was not recorded. 4. A $270 receipt on account was recorded as a $720 debit to Cash and a $270 credit to Accounts Receivable.

Transactions are entered in the ledger accounts and then transferred to journals.

The account titles used in journalizing transactions need not be identical to the account titles in the ledger.

Under the double-entry system, revenues must always equal expenses.

Which of the following is not an example of a source document that provides evidence of a transaction?

A trial balance would only help in detecting which one of the following errors?

Describe the process of preparing a trial balance. What is the purpose of preparing a trial balance? If a trial balance does not balance, identify what might be the reasons why it does not balance. If the trial balance does balance, does that insure that the ledger accounts are correct? Explain.

An account will have a credit balance if the

If the sum of the debit column equals the sum of the credit column in a trial balance, it indicates

The classification and normal balance of the Dividends account is

If a company pays dividends of $10,000,

When a company has performed a service but has not yet received payment, it

Posting

Which accounts normally have debit balances?

Analyze the following transactions in terms of their effect on the basic accounting equation. Record each transaction by increasing (+) or decreasing (-) the dollar amount of each item affected. Indicate the new balance of each item after a transaction is recorded. (1) Issued stock to investors for $20,000 in cash. (2) Purchased supplies on credit for $700. (3) Billed customers $1,000 for services provided. (4) Paid for supplies purchased in transaction 2. (5) Paid dividends of $300 cash to stockholders. (6) Received half from customers billed in transaction 3. (7) Received and paid utility bill for $100.

Howard Company had a transaction that caused a $5,000 increase in both assets and total liabilities. This transaction could have been a(n)

A person who wants to determine the balance of a particular account should refer to the

Comstock Company provided consulting services and billed the client $2,500. As a result of this event