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Exam 2: Analyzing and Recording Transactions

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Question 81

Multiple Choice

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A record of the increases and decreases in a specific asset, liability, equity, revenue, or expense is a(n) :

A) Journal.
B) Posting.
C) Trial balance.
D) Account.
E) Chart of accounts.

F) All of the above
G) None of the above

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Question 82

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Items such as sales tickets, bank statements, checks, and purchase orders are source documents.

A) True
B) False

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Question 83

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Josephine's Bakery had the following assets and liabilities at the beginning and end of the current year: If Josephine invested an additional $12,000 in the business and withdrew $5,000 during the year, what was the amount of net income earned by Josephine's Bakery?

The following trial balance is prepared from the general ledger of Hal's Auto Repair. Because the trial balance did not balance, you decided to examine the accounting records. You found that the following errors had been made: 1. A purchase of supplies on account for $245 was posted as a debit to Supplies and as a debit to Accounts Payable. 2. An investment of $500 cash by the owner was debited to Hal Frederick, Capital and credited to Cash. 3. In computing the balance of the Accounts Receivable account, a debit of $600 was omitted from the computation. 4. One debit of $300 to the Hal Frederick, Withdrawals account was posted as a credit. 5. Office equipment purchased for $800 was posted to the Repair Equipment account. 6. One entire entry was not posted to the general ledger. The transaction involved the receipt of $125 cash for repair services performed for cash. Prepare a corrected trial balance for the Hal's Auto Repair as of October 31.

An account balance is:

A ___________________ is a record containing all accounts for a company along with their balances.

The debt ratio is used:

The third step in the analyzing and recording process is to post the information to ________________________.

Explain how accounts are used in recording information about transactions.

A column in journals and ledger accounts used to cross reference journal and ledger entries is the:

____________________________ and _____________________ are the starting points for the analyzing and recording process.

Dolly Barton began Barton Office Services in October and during that month completed these transactions: a. Invested $10,000 cash, and $15,000 of computer equipment. b. Paid $500 cash for an insurance premium covering the next 12 months. c. Completed a word processing assignment for a customer and collected $1,000 cash. d. Paid $200 cash for office supplies. e. Paid $2,000 for October's rent. Prepare journal entries to record the above transactions. Explanations are unnecessary.

Posting is the transfer of journal entry information to the ledger.

Which of the following statements is incorrect?

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

Inge Industries received $3,000 from a customer for services rendered and not previously recorded. Inge's general journal entry to record this transaction will be:

A company sends a $1,500 bill to a customer for delivery services rendered. Set up the necessary T-accounts below and show how this transaction would be recorded directly in those accounts.

An income statement reports the revenues earned less expenses incurred by a business over a period of time.

The _______________________ is a record containing all accounts used by a company.

During the month of February, Hoffer Company had cash receipts of $7,500 and cash disbursements of $8,600. The February 28 cash balance was $1,800. What was the January 31 beginning cash balance?