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Study Resources (Accounting)

3.7-1Pattie’s Event Planning Service records prepaid expenses as expenses when cash is paid out, and records                                           unearned revenues as revenues when cash is collected.  She then makes adjusting entries as needed to                                           bring her books up to the full accrual basis once a year.
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2.1-21Which of the following is NOT part of owner’s equity? A) Accounts receivable B) Capital C) Notes payable D) Both A and C 2.1-22A book holding all of the accounts is called the: A) ledger. B) journal. C) income statement. D) balance sheet. 2.1-23Which of the following is the detailed record of the changes in a particular asset, liability,.
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3.4-21Real Losers, a diet magazine, collected $360,000 in subscription revenue in May. Each subscriber               will receive an issue of the magazine for each of the next 12 months, beginning with the June issue. The               company uses the accrual method of accounting.  What is the balance in the Unearned.
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1.9-1The balance sheet of a business represents the account balances as of a particular date in time. 1.9-2By looking at a statement of owner’s equity, you can evaluate the effect of drawings on the ending                                           balance in owner’s equity.  1.9-3Beginning owner’s capital was $25,000. Ending owner’s capital is.
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4.3-9Beginning balance in Capital is $10,000.  Revenues are $200,000.  Expenses are $120,000.  Withdrawals                                           are $4,000. The ending balance in Capital is $90,000. 4.3-10Beginning balance in Capital is $80,000.  Revenues are $60,000.  Expenses are $75,000.  No withdrawals                                           were taken.  The ending balance in Capital is $65,000. 4.3-11Beginning.
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1.9-11Which of the following financial statements reports expenses in decreasing order of their amounts, with the largest expense first?   A) Statement of cash flows B) Income statement  C) Statement of owner’s equity D) Balance sheet  1.9-12Which of the following financial statements uses net income or net loss taken directly from the income.
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2.4-23A business borrows cash by signing a note payable. Which account is debited?  A) Notes payable B) Accounts payable  C) Accounts receivable D) Cash  2.4-24A business borrows cash by signing a note payable. Which account is credited?  A) Notes payable B) Accounts payable  C) Accounts receivable D) Cash  2.4-25A business repays the.
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3.4-11At January 1, Smith has a beginning balance in Prepaid insurance expense of $1,200.  Smith pays                                                         insurance premiums once a year, and his total premium is $4,800.  As of the end of February, the balance                                           in prepaid insurance is $2,000. 3.4-12At January 1, Smith.
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2.4-13A business renders services for $16,000 and collects cash from the customer. Which account is debited?  A) Cash  B) Accounts receivable  C) Service revenue  D) Accounts payable 2.4-14A business renders services for $16,000 and collects cash from the customer. Which account is credited?  A) Cash  B) Accounts receivable  C) Service.
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3.6-5Prepare an income statement for the year ended December 31, 2012 from the adjusted trial balance                                           below. Deavours Photography Adjusted Trial Balance               December 31, 2012 Accounts Debit Credit Cash $2,000 Prepaid insurance 2,000 Office supplies 600 Office equipment 16,000 Accumulated depreciation $3,000 Accounts payable 5,000 Salaries payable 900 Unearned service revenue 2,500 C. Devours, capital 7,450 C. Devours, drawing 5,600 Service revenue 15,350 Salaries expense 4,600 Depreciation expense 1,000 Supplies expense 400 Insurance expense 2,000 Totals $34,200 $34,200 3.6-6Prepare a statement of owner’s equity.
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3.2-5In accounting, the matching principle means to match which of the following? A)Revenues to liabilities B)Expenses to assets C)Expenses to revenues D)Expenses to liabilities 3.2-6The matching principle means which of the following? A)Revenues are subtracted from expenses. B)Expenses are subtracted from revenues. C)Assets are subtracted from liabilities. D)Liabilities are subtracted from expenses.  3.2-7The revenue principle guides accountants in.
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2.5-23The following transactions have been journalized and posted to the proper accounts. Prepare a trial                                           balance in good form. a.Edward Wilson invested $8,000 cash in his new landscaping business. b.The business paid the first month's rent with $300 cash. c.The business purchased equipment by paying $2,000 cash and.
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2.5-1In a trial balance, total debits are always equal to total credits.  2.5-2The trial balance is generally used only inside the business and is not published with the other financial                                           statements. 2.5-3A trial balance summarizes a ledger by listing all the accounts with their ending balances.  2.5-4Data.
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3.5-4The accountant for Wilson Consulting Company failed to make an adjusting entry to record $3,000 of                                           unearned service revenue that has now been earned. Which of the following is TRUE?  A) Total liabilities are overstated.  B) Total liabilities are understated.  C) Total assets are overstated.  D) Total.
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2.4-61A business is started by receiving $5,000 cash from the owner.  Please provide the journal entry (debits                                           first, credits second.) 2.4-62A business purchases land for $100,000 cash.  Please provide the journal entry (debits first, credits                                           second.) 2.4-63A business purchases supplies for $200 on account.  Please provide.
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4.1-31Please refer to the worksheet below.  Enter the following adjusting entry into the worksheet: At year-end, the company owes $180 of salaries to its staff that it has not paid yet. Trial Balance Adjustments Adjusted Trial Balance Income Statement Balance Sheet Account Title Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Cash $1,700 Accounts receivable 8,500 Supplies 100 Equipment 7,500 Accumulated depreciation $2,000 Accounts payable 1,200 Salary payable 800 Unearned revenue 600 Capital 3,400 Drawing 2,300.
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3.1-1Accrual accounting records transactions ONLY when cash is received or paid.  3.1-2The owner of Recipes.org purchases $2,000 of supplies on account. Under the accrual basis of                                                         accounting, no entry is made until the $2,000 is paid.  3.1-3In cash-basis accounting, revenue is recognized when cash is received.
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2.1-11Accountants first record transactions in the:  A) chart of accounts.  B) trial balance.  C) journal.  D) ledger. 2.1-12Which of the following accounts is an asset?  A) Salary expense  B) Accounts payable  C) Service revenue  D) Prepaid expenses  2.1-13Which of the following accounts is a liability?  A) Accounts payable  B) Prepaid.
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3.4-1To accrue revenue means that the cash receipt is recorded before the revenue is earned. 3.4-2Prepaid insurance is an asset account.  3.4-3Prepaid rent is an expense account.  3.4-4A contra account has two characteristics: (1) a contra account is paired with a companion account, and (2)                             a contra account's normal.
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4.1-11Which of the following is TRUE if the income statement debit column exceeds the income statement                                           credit column on a worksheet?  A) The company has a net loss.  B) The capital account increased during the period.  C) The company has net income.  D) Liabilities are greater than.
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3.4-61A business pays salaries of $140,000 on the first and fifteenth day of every month. Which of the                                                         following is the adjusting entry required on December 31, 2011?  A) A debit $140,000 to Salaries expense and a credit $140,000 to Salaries payable.  B) A debit $140,000.
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2.3-28The first step of journalizing an entry is to:  A) post the accounts to the ledger.  B) identify each account affected and its type.  C) determine whether each account is increased or decreased. D) record the transaction in the journal, including a brief explanation.  2.3-29Which of the following is the.
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3.4-31Adjusting entries NEVER involve: A) expenses. B) cash. C) liabilities. D) revenues. 3.4-32If an adjusting entry includes a debit to Rent expense, that would indicate that the payment of rent had                                           been previously recorded as a(n) ______ entry. A) prepaid expense B) depreciation C) accrued expense D) accrued revenue 3.4-33An entry that reflects.
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3.4-81Real Losers, a diet magazine, collected $360,000 in subscription revenue in May. Each subscriber will               receive an issue of the magazine for each of the next 12 months, beginning with the June issue. The               company uses the accrual method of accounting.  What adjusting entry is needed at June.
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3.4-71Hank’s Tax Planning Service started business in January, 2012.  He rented an office for $900 a month                                           starting January 1.  He prepaid the rentals through June 30.   He makes accrual adjustments monthly.   As                                           of April 30, Hank’s ledger shows a balance in Prepaid Rent.
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1.8-13Martin Supply Service received $1,000 cash from a customer which was owed to the business from the                                           previous month.  What is the effect of the cash receipt on the accounts of the business? A)  Accounts receivable decreases; Owner’s capital account decreases. B)  Cash account increases; Accounts receivable decreases. C)  Accounts.
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1.10-1The income statement shows whether or not a business can generate enough cash to pay its liabilities. 1.10-2The balance sheet shows whether or not a business is earning a profit. 1.10-3You can evaluate business performance in terms of profitability by analyzing which financial statement? A)  Income statement B)  Balance sheet  C)  Statement of cash.
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2.4-53The following entries were made by the accountant of Patel Pastries during its first month of                                                         operation: 1.James Patel, the owner, deposited $3,000 in the business's new checking account. 2.Patel Pastries paid the first month's rent of $400 in cash. 3.Patel Pastries purchased equipment by signing.
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4.1-21Please refer to the partially completed worksheet below:    Trial Balance Adjustments Adjusted Trial Balance Income Statement Balance Sheet Account Title Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Cash $1,700 $1,700 $1,700 Accounts receivable 8,500 $2,000 10,500 10,500 Supplies 100 $80 20 20 Equipment 7,500 7,500 7,500 Accumulated depreciation $2,000 240 $2,240 $2,240 Accounts payable 1,200 1,200 1,200 Salary payable 800 180 980 980 Unearned revenue 600 600 600 Capital 3,400 3,400 3,400.
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4.3-19Accumulated depreciation is a permanent account. 4.3-20Service revenue is a temporary account. 4.3-21Depreciation expense is a temporary account. 4.3-22Service revenue is a permanent account. 4.3-23Salary expense is a temporary account. 4.3-24Withdrawals is a permanent account. 4.3-25Capital is a permanent account. 4.3-26Where can closing entries be found?  A) In a company's general journal  B) On a company's statement.
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2.4-43Which of the following journal entries would be recorded if a business purchased $200 of supplies by                                           paying cash?  A)Cash200      Supplies 200 B)Accounts payable200      Supplies 200 C)Supplies200      Cash 200 D)Supplies200      Accounts payable 200 2.4-44A business purchased a building by.
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3.4-91A business hired a repairman to overhaul their plumbing system.  The repairman began working on                                           September 15 and finished the work on October 15.   The business agreed to pay him $4,000 when the                                           work was completed.  As of September 30, the work was 50%.
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1.9-24Alice Li started Li Design Consultants and invested $5,000 into the business.   On Dec. 12, she rendered                                           services to three clients “on account” with total revenues earned of $4,500.  She then incurred advertising                                           expense on four different websites and promised to pay a total.
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3.4-41The accountant for Noble Jewelry Repair Services forgot to make an adjusting entry for Depreciation                                           expense for the current year. What is the effect of this error on total assets?  A) Total assets are understated.  B) Total assets are not affected.  C) Total assets are overstated.  D).
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2.5-25At the end of a month, a business shows the following balances in its ledger.             Cash Accounts receivable       Supplies                         Land 5,000 1,200 200 20,000   Accounts payable          Capital    Service revenue                 Rent expense 1,300 1,000 35,500 4,500      Salary expense     Utility expense 6,000 900 Please use this data to prepare a trial balance. Account title Debit Credit .
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4.1-1The last two columns generally found on the right side of the worksheet are the income statement                                                         columns.  4.1-2Net income is entered as the balancing amount in the debit side of the income statement columns and                                           the credit side of the balance sheet.
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1.9-23On Jan. 1, 2012, William Kelly started Kelly’s Computer Service by investing $10,000.  On Jan. 3, the                                           business borrowed $10,000 from a creditor and executed a Note payable with the principal and interest to                                           be due in one year.  On Jan. 5, the business.
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2.4-33Which of the following journal entries would be recorded if a business purchased $200 of supplies on                                           account?  A)Accounts payable200      Supplies 200 B)Supplies200      Accounts payable 200 C)Supplies200      Cash 200 D)Cash200      Supplies 200 2.4-34Which of the following journal entries would.
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3.4-51 Active Education sells tickets in advance for their weekly productions and records the proceeds as                                           Unearned revenue.  At the end of each month, they make an adjusting entry to account for the tickets                                           used during the month (Ticket revenue.)  At March 1, the.
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2.4-34A business purchased $200 of supplies on account and recorded the following journal entry: Supplies 200      Accounts payable 200 Which of the following sets of ledger accounts reflect the posting of this transaction? Which of the following sets of ledger accounts reflect the posting of this transaction? A) Supplies 200 B) Supplies 200 C) Supplies 200 D) Supplies 200 Accounts payable 200 Accounts payable 200 Accounts payable 200 Accounts.
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4.2-5Using the following worksheet for Alcazar Service Co., please prepare a statement of owner’s equity. The data are for the year ended December 31, 2012. Trial Balance Adjustments Adjusted Trial Balance Income Statement Balance Sheet Account Title Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Cash $1,700 $1,700 $1,700 Accounts receivable 8,500 $2,000 10,500 10,500 Supplies 100 $80 20 20 Equipment 7,500 7,500 7,500 Accumulated depreciation $2,000 240 $2,240 $2,240 Accounts payable 1,200.
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3.6-8Below is the adjusted trial balance for Parsons Repair Service.  Please prepare the income statement for                                           the year ended December 31, 2012. Parsons Repair Service Adjusted Trial Balance               December 31, 2012 Accounts Debit Credit Cash $1,600 Accounts receivable 2,400 Prepaid rent 800 Supplies 200 Building 14,000 Accumulated  depreciation $2,000 Accounts payable 4,200 Salary payable 1,000 Unearned revenue 800 D. Parsons, capital 6,000 D..
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2.4-3When a business records an expense incurred, the expense account is always credited.  2.4-4When a business records revenue earned, the revenue account is always credited.  2.4-5An owner invests $20,000 in her new business by depositing the cash in the business's checking                                                         account. Which account is debited? .
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2.1-2A chart of accounts is the book holding all of the company's accounts.  2.1-3A trial balance is the list of all a company's accounts along with their account numbers.  2.1-4A journal is a chronological record of transactions.  2.1-5In a typical chart of accounts, liabilities appear before assets. 2.1-6A trial balance is.
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2.3-8A journal entry includes BOTH debit and credit amounts. 2.3-9In the accounting system, the first place that transactions are recorded is the ledger.  2.3-10Which of the following groups of accounts BOTH normally have a debit balance?  A) Assets and Expenses  B) Revenues and Expenses  C) Liabilities and Owner’s equity  D) Assets.
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3.3-2Blum Services has the following unadjusted balances at year-end. Cash$12,900 Prepaid insurance2,000 Office supplies1,300 Office equipment10,500 Accumulated depreciation—office equipment3,500 Accounts payable2,900 Salaries payable-0- Unearned service revenue4,500 A.L.Blum, capital11,750 A.L.Blum, drawing5,600 Service revenue13,350 Salary expense3,700 Depreciation expense-0- Supplies expense-0- Insurance expense -0- The following information is available to use in making adjusting entries. a.Office supplies on hand at year-end: $250 b.Prepaid insurance expired during the year:  $325.
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3.1-11Which of the following accounts does cash-basis accounting ignore? A) Payables B) Revenue C) Cash D) Expenses 3.1-12Which of the following entries would be recorded ONLY if a company is using the accrual method of                                           accounting?  A)Cash1,000      Accounts receivable 1,000 B)Salary expense1,000      Cash 1,000 C)Cash1,000      Service.
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2.3-18For Cash, the category of account and its normal balance are: A)Assets and a debit balance. B)Liabilities and a credit balance. C)Owner’s equity and a credit balance. D)Assets and a credit balance. 2.3-19For Capital, the category of account and its normal balance are: A)Owner’s equity and a credit balance. B)Assets and a debit balance. C)Liabilities and a credit.
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2.2-8Which of the following accounts decreases with a credit?  A) Cash  B) Capital  C) Accounts payable  D) Notes Payable 2.2-9Which of the following accounts increases with a debit?  A) Cash  B) Interest payable  C) Accounts payable  D) Capital 2.2-10Which of the following accounts decreases with a debit?  A) Notes payable  B).
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