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Exam 2: Analyzing Transactions

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Question 101

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For the following, select a "A" if the following account normally has a debit balance and select a "B" if the following account normally has a credit balance.

Premises

Responses

Notes Payable

Credit

Mortgage Payable

Debit

Rent Revenue

Unearned Income

Drawing

Capital

Accounts Receivable

Automobiles

Utility Expense

Premises

Notes Payable

Mortgage Payable

Rent Revenue

Unearned Income

Drawing

Capital

Accounts Receivable

Automobiles

Utility Expense

Responses

Credit

Debit

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Correct Answer

Premises

Responses

Notes Payable

Mortgage Payable

Rent Revenue

Unearned Income

Drawing

Capital

Accounts Receivable

Automobiles

Utility Expense

Premises

Notes Payable

Mortgage Payable

Rent Revenue

Unearned Income

Drawing

Capital

Accounts Receivable

Automobiles

Utility Expense

Responses

Question 102

Multiple Choice

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Net income will result when

A) revenues (credits) > expenses (debits)
B) revenues (debits) > expenses (credits)
C) expenses (credits) = revenues (debits)
D) revenues (credits) = expenses (debits)

E) A) and B)
F) B) and C)

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Question 103

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Transactions are listed in the journal chronologically.

Owner's capital will be reduced by the amount in the drawing account.

The chart of account for the Corning Company includes some of the following accounts: $\begin{array}{|l|l|}\hline \text { Account Name } & \text { Account Number } \\\hline \text { Cash } & 11 \\\hline \text { Accounts Receivable } & 13 \\\hline \text { Prepaid Insurance } & 15 \\\hline \text { Accounts Payable } & 21 \\\hline \text { Unamed Revenue } & 24 \\\hline \text { Corning, Capital } & 31 \\\hline \text { Corning, Drawing } & 32 \\\hline \text { Fees Earned } & 41 \\\hline \text { Salaries Expense } & 54 \\\hline \text { Rent Expense } & 56 \\\hline & \\\end{array}$ On the journal page 3, the following transaction was found: $\begin{array} { | l | l | l | } \hline \text { Prepaid Insuranse } & 1,530 & \\\hline \text { Cash } & & 1,530 \\\hline & &\end{array}$ What is the post reference that will be found on the cash account?

Which of the following errors, each considered individually, would cause the trial balance totals to be unequal?

On January 12th, JumpStart Co. purchased $870 in office supplies. (a) Journalize this transaction as if JumpStart paid cash. (b) (1) Journalize this transaction as if JumpStart placed it on account. (b) (2) On January 18th, JumpStart pays the amount due. Journalize this event.

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

Which of the following owner's equity accounts follows the same debit and credit rules as liabilities?

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

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

On January 1, 2010, Cary Parsons established a catering service. Listed below are accounts to use for transactions (a) through (e), each identified by a number. Following this list are the transactions that occurred in Parsons' first month of operation. You are to indicate for each transaction the accounts that should be debited and credited by placing the account number(s) in the appropriate box.

Prepare a journal entry on October 12 for the fees earned on account, $14,600.

McMann Company has a condensed income statement as shown:: $\begin{array} { | l | l | l | } \hline & \mathbf { 2 1 4 } & \mathbf { 2 0 1 3 } \\\hline \text { Sales } & \$ 198,000 & \$ 165,500 \\\hline \text { Total operating expenses } & 163,000 & 147,500 \\\hline \text { Net income } & 35,000 & 18,000 \\\hline & & \\\end{array}$ Using horizontal analysis, calculate the amount and percent change for Sales. Round to one decimal place.

$\begin{array}{|l|l|l|l|l|l|}\hline \text { March } & 10 & \text { Accounts Payable } & & 800 & \\\hline & & \text { Cash } & & & 800 \\\hline & & \text { Paid creditors on account } & & & \\\hline & & & & & \\\hline\end{array}$ What effect does this journal entry have on the accounts?

Office supplies purchased by Ari's Alarm Service on account were returned. Which of the following entries for Ari's Alarm Service records this transaction?

All of the following occur with a double-entry accounting system except:

Randomly listed below are the steps for preparing a trial balance: What is the proper order of these steps?

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

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