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Exam 2: Analyzing and Recording Transactions

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Question 71

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What would be the account balance in the cash ledger account after the following transactions? $\begin{array} { | l | l | } \hline \text { Owner investment } & \$ 100,000 \\\hline \text { Purchased Supplies with cash } & \$ 20,000 \\\hline \text { Received bill for one month of rent} & \$ 2,200 \\\hline \text { Paid wages } & \$ 800 \\\hline \text { Billed customer for servicesperfomed services performed } & \$ 1,250 \\\hline\end{array}$

A) $124,250
B) $80,150
C) $78,250
D) $79,200
E) $80,450

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Question 72

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The journal is known as the book of final entry because financial statements are prepared from it.

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Question 73

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A revenue account normally has a debit balance.

Increases in assets are _______________,while increases in liabilities are _______________.

Management Services,Inc.provides services to clients.On May 1,a client prepaid Management Services $60,000 for 6-months contract in advance.Management Services' general journal entry to record this transaction will include a

The chart of accounts is a list of all the accounts used by a company and a corresponding identification number.

A company paid $2,500 cash to satisfy a previously recorded account payable.Set up the necessary T-accounts below and show how this transaction would be recorded directly in those accounts.

A balance column ledger account is:

List all the necessary steps for recording transactions.

A report that lists accounts and their balances,in which the total debit balances should equal the total credit balances is called a(n) :

Which of the following statements about the Cash account are true?

An asset created by prepayment of an expense is:

Josephine's Bakery had the following assets and liabilities at the beginning and end of the current year: $\begin{array}{|l|r|r|} \hline& \text { Assets } & \text { Liabilities } \\\hline \text { Beginning of the year } & \$ 114,000 & \$ 68,000 \\\hline \text { End of the year } & 135,000 & 73,000\\\hline\end{array}$ If the owners invested an additional $12,000 in the business during the year,but no dividends were paid,what was the amount of net income earned by Josephine's Bakery during the current year?

Unearned revenues are:

Of the following accounts,the one that normally has a credit balance is:

Match the accounts to the statement they appear on

Double-entry accounting is an accounting system:

Match the following definitions and terms by placing the number that identifies the best definition in the blank space next to the term.

Identify which of the following items would likely serve as a source document by marking an X in the appropriate column.The first one is done as an example $\begin{array}{|l|l|c|c|} \hline& & \text { Yes } & \text { No } \\\hline \text { Ex. } & \text { Credit card } & & \mathrm{X} \\\hline \text { a. } & \text { Credit card receipt } & & \\\hline \text { b. } & \text { Purchase order } & & \\\hline \text { c. } & \text { Invoice } & & \\\hline \text { d. } & \text { Balance sheet } & & \\\hline \text { e. } & \text { Bank statement } & & \\\hline \text { f. } & \text { Journal entry } & & \\\hline \text { g. } & \text { Electric power bill } & & \\\hline \text { h. } & \text { Employee earnings record } & & \\\hline\end{array}$

The journal is known as a book of original entry.