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Exam 2: Analyzing Transactions

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Question 21

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Debiting the cash account will increase the account.

A) True
B) False

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Question 22

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Transactions are listed in the journal chronologically.

A) True
B) False

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Question 23

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Office supplies were sold by Janer's Cleaning Service at cost to another repair shop, with cash received. Which of the following entries for Janer's Cleaning Service records this transaction?

The process of transferring data from the journal to the ledger accounts is called posting.

Withdrawals decrease owner's equity and are listed on the income statement as a deduction from revenue.

A list of the accounts used by a business is called the

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

For each of the following accounts, indicate whether its normal balance is on the credit side or the debit side of the T account. -Accounts Receivable

Listed below are accounts to use for transactions (a) through (d), each identified by a number. Following this list are the transactions. 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. 1.Cash 2.Accounts Receivable 3.Office Supplies 4.Land 5.Interest Receivable 6.Building 7.Accumulated Depreciation-Building 8.Depreciation Expense-Building 9.Accounts Payable 10.Interest Payable 11.Insurance Payable 12.Utilities Expense 13.Notes Payable 14.Prepaid Insurance 15.Service Revenue 16.Owner, Capital 17.Insurance Expense 18.Interest Expense 19.Office Supplies Expense 20.Unearned Service Revenue 21.Owner, Drawing​ $\begin{array} { | l | l | l | } \hline \text { Transactions } & \text { Account(s) Debited } & \text { Account(s) Credited } \\\hline \text { a. Utility bill is received; payment will } & & \\\text { be made in } 10 \text { days. } & & \\\hline \text { b. Paid the utility bill previously } & & \\\text { recorded in transaction (a). } & & \\\hline \text { c. Bought a three-year insurance } & & \\\text { policy and paid in full. } & & \\\hline \text { d. Received } \$ 7,000 \text { from a contract to } & & \\\text { perform accounting services over the } & & \\\text { next two years. } & & \\\hline\end{array}$

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?

On November 30, Damien Lawson is informed by his accountant that $550 of a transaction recording the purchase of office supplies was really office equipment. Prepare the journal entry to correct this situation.

The normal balance of a capital account is a debit.

Journalize the following selected transactions for January. Explanations may be omitted.Jan.1Received cash from the investment made by the owner, $14,000.2Received cash for providing accounting services, $9,500.3Billed customers on account for providing services, $4,200.4Paid advertising expense, $700.5Received cash from customers on account, $2,500.6Owner withdrew $1,010.7Received telephone bill, $900.8Paid telephone bill, $900.​

A credit to the cash account will increase the account.

The unearned revenue account is an example of a liability.

The posting reference notation used in the journal is the page number.

Liability accounts are increased by debits.

Postings made to standard account forms show a new balance after each entry.

Consuming goods and services in the process of generating revenues results in expenses.

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