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Exam 2: Analyzing Transactions

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Question 121

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The balance of the account can be determined by adding all of the debits, adding all of the credits, and adding the amounts together.

A) True
B) False

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Question 122

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The right hand side of a T account is known as a debit and the left hand side is known as a credit.

A) True
B) False

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Question 123

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On January 1, Merry Walker and other stockholders established a catering service. Listed below are accounts to use for transactions a) through f), each identified by a number. Following this list are the transactions that occurred in Walker's first month of operations. You are to indicate for each transaction the accounts that should be debited and credited by placing the account numbers) in the appropriate box. 1. Cash 2. Accounts Receivable 3. Supplies 4. Prepaid Insurance 5. Equipment 6. Truck 7. Notes Payable 8. Accounts Payable 9. Common Stock 10. Dividends 11. Fees Earned 12. Wages Expense 13. Rent Expense 14. Utilities Expense 15. Truck Expense 16. Miscellaneous Expense 17. Insurance Expense $\begin{array} { | l | l | l | } \hline \text { Transactions } & \text { Accounts) Debited } & \text { Accounts) Credited } \\\hline \begin{array} { l } \text { a. Recorded jobs completed on } \\\text { account and sent invoices to } \\\text { customers. }\end{array} & & \\\hline \text { b. Received an invoice for truck } & & \\\text { expenses to be paid in February. } & & \\\hline \text { c. Paid utilities expense } & & \\\hline \begin{array} { l } \text { d. Received cash from customers on } \\\text { account. }\end{array} & & \\\hline \text { e. Paid employee wages. } & & \\\hline \text { f. Paid dividends to stockholders. } & & \\\hline\end{array}$

When an owner invests assets in the business, the retained earnings account increases due to revenue being earned.

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

Transactions are initially entered into a record called a journal.

All nine transactions for Dalton Survey Company for September, the first month of operations, are recorded in the following T accounts: ​ ​ ​ ​ ​ Indicate the following for each debit and each credit: a)The type of account affected asset, liability, equity, dividends, revenue, or expense). b)The effect on the account, using "+" for increase and "−" for decrease. ​ Present your answers in the following form:

A debit may signify an)

Which of the following applications of the rules of debit and credit is true?

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

Which of the following entries records the payment of dividends?

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?

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?

Journalizing a transaction with both the debit and the credit for $69 instead of $96 will cause the trial balance to be out of balance.

On October 30, JumpStart pays $3,330 in dividends to its stockholders. Journalize this event.

Cash was paid by Janer's Cleaning Service to creditors on account. Which of the following entries for Janer's Cleaning Service records this transaction?

A cash payment is recorded in the cash account as

Accounts are records of increases and decreases in individual financial statement items.

Organize the following accounts into the usual sequence of a chart of accounts. Miscellaneous Expense Accounts Payable Accounts Receivable Cash Common Stock Fees Earned Prepaid Rent Salaries Expense Unearned Revenue Dividends

Which of the following situations increase stockholders' equity?