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Exam 2: Analyzing Transactions

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Question 61

Multiple Choice

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In which of the following types of accounts are decreases recorded by debits?

A) assets
B) liabilities
C) expenses
D) dividends

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

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Question 62

Multiple Choice

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Accounts

A) do not reflect money amounts
B) are not used by entities that manufacture products
C) are records of increases and decreases in individual financial statement items
D) are only used by large entities with many transactions

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

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Question 63

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Several transactions are listed below, with the accounting equation stated to the right side of each. Use the following identification codes to indicate the effects of each transaction on the accounting equation. Write your answers in the space provided under the accounting equation. You need an identification code for each element of the accounting equation. An example is given before the first transaction.

That the total dollar amount of the debits equals the total dollar amount of the credits in the ledger accounts can be verified through an) :

When an account receivable is collected in cash, the total assets of the business increase.

Below is the unadjusted trial balance for Dawson Designs. REQUIRED: 1) Identify the errors in the trial balance. All accounts have normal balances. 2) Prepare a corrected trial balance.

An account in its simplest form has three parts to it: a title, an increase side, and a decrease side.

Which one of the statements below is not a purpose for the journal?

A chart of accounts is a listing of accounts that make up the journal.

A trial balance is prepared to

The chart of accounts for the Corning Company includes the following: $\begin{array} { | l | l | } \hline \text { Account Name } &{ \text { Account Number } } \\\hline \text { Cash } & 11 \\\hline \text { Accounts Receivable } & 13 \\\hline \text { Prepaid Insurance } & 15 \\\hline \text { Accounts Payable } & 21 \\\hline \text { Unearned Revenue } & 24 \\\hline \text { Common Stock } & 31 \\\hline \text { Dividends } & 32 \\\hline \text { Fees Earned } & 41 \\\hline \text { Salaries Expense } & 54 \\\hline \text { Rent Expense } & 56 \\\hline\end{array}$ Page 3 of the journal contains the following entry: $\begin{array} { | c | l | l | } \hline \text { Prepaid Insurance } & 1,530 & \\\hline \text { Cash } & & 1,530 \\\hline\end{array}$ -What is the posting reference that will be found in the cash account?

Which of the following groups of accounts increase with a credit?

On January 7, stockholders invest $45,000 to initiate the operation of a business, JumpStart. Provide the journal entry for this transaction.

$\begin{array} { | c | c | c | c | c | c | } \hline \text { March } & 6 & \text { Cash } & & 2,500 & \\\hline & & \text { Unearned Fees } & & & 2,500 \\\hline & & ? ? ? ? ? ? ? ? ? ? ? ? & & & \\\hline\end{array}$ What is the best explanation for this journal entry?

The following two situations are independent of each other. 1. On June 1, the cash account balance was $45,750. During June, cash payments totaled $243,910, and the June 30 balance was $53,200. Determine the cash receipts during June and show your calculation. 2. On March 1, the supplies account balance was $1,800. During March, supplies of $2,450 were purchased, and $630 of supplies were on hand as of March 31. Determine the supplies expense for March and show your calculation.

Stockholders' equity will be reduced by the amount in the dividends account.

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

The bookkeeper for Brockton Industries prepared the following journal entries and posted the entries to the general ledger as indicated in the T accounts presented. Assume that the dollar amounts and the descriptions of the entries are correct. Required: If you assume that all journal entries have been recorded correctly, use the above information to: 1) Identify the postings to the general ledger that were made incorrectly. 2) Describe how each incorrect posting should have been made.

A debit signifies a decrease in

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