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Study Resources (Accounting)

1 - 1 Accounting in Action Ex. 193 Magnolia Electric Car Cleaning has the following accounts: Accounts Receivable Notes Payable Accounts PayableOwner’s Capital CashOwner’s Drawing SuppliesEquipment Identify which items are(1)Assets (2)Liabilities (3)Owner's Equity Ex. 194 On June 1, 2014, Secretly Canadian Company prepared a balance sheet that shows the following: Assets (no cash)................................$100,000 Liabilities......................................45,000 Owner's Equity..................................55,000 Ex. 194(cont.) Shortly thereafter, all of the assets were sold for.
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2 - 1 The Recording Process 11.The drawing account is a subdivision of the owner's capital account and appears as an expense on the income statement. 12.Revenues are a subdivision of owner's capital. 13.Under the double-entry system, revenues must always equal expenses. 14.Transactions are entered in the ledger first and then they are analyzed in.
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2 - 1 The Recording Process MULTIPLE CHOICE QUESTIONS 38.An account consists of a.one part. b.two parts. c.three parts. d.four parts. 39.The left side of an account is a.blank. b.a description of the account. c.the debit side. d.the balance of the account. 40.Which one of the following is not a part of an account? a.Credit side b.Trial balance c.Debit side d.Title 41.An account is a part of the.
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2 - 1 The Recording Process Ex. 185 The transactions of Medina Information Service are recorded in the general journal below. You are to post the journal entries to the accounts in the general ledger. After all entries have been posted, you are to prepare a trial balance on the form provided. General JournalJ1 ——————————————————————————————————————————— DateAccount.
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1 - 1 Accounting in Action Ex. 208 For each of the following, describe a transaction that will have the stated effect on the elements of the accounting equation. (a)Increase one asset and decrease another asset. (b)Increase an asset and increase a liability. (c)Decrease an asset and decrease a liability. (d)Increase an asset and increase owner's equity. (e)Increase.
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2 - 1 The Recording Process 31.The double-entry system is a logical method for recording transactions and results in equal debits and credits for each transaction. 32.The normal balance of an expense is a credit. 33.The journal provides a chronological record of transactions. 34.The ledger is merely a bookkeeping device and therefore does not provide.
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2 - 1 The Recording Process 148.Posting of journal entries should be done in a.account number order. b.alphabetical order. c.chronological order. d.dollar amount order. 149.The chart of accounts is a a.list of accounts and their balances at a given time. b.device used to prove the mathematical accuracy of the ledger. c.listing of the accounts and the account numbers which identify.
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2 - 1 The Recording Process Ex. 184 Sigur Ros Company is a newly organized business. The list of accounts to be opened in the general ledger is as follows: Accounts PayablePrepaid Insurance Accounts ReceivablePrepaid Rent Accumulated Depreciation - Equip.Rent Expense CashSalaries and Wages Expense Depreciation ExpenseSalaries and Wages Payable EquipmentService Revenue Insurance ExpenseSupplies Owner’s CapitalSupplies Expense Owner’s Drawings Instructions Organize the accounts into.
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1 - 1 Accounting in Action SHORT-ANSWER ESSAY QUESTIONS S-A E  237 The accounting profession provides many career opportunities for individuals. Identify the major fields that exist in accounting and comment on the major functions performed by individuals in each of these areas. S-A E  238 The framework used to record and summarize the economic activities.
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2 - 1 The Recording Process 88.The usual sequence of steps in the transaction recording process is: a.journal  ?  analyze  ?  ledger. b.analyze  ?  journal  ?  ledger. c.journal  ?  ledger  ?  analyze. d.ledger  ?  journal  ?  analyze. 89.In recording business transactions, evidence that an accounting transaction has taken place is obtained from a.business documents. b.the Internal Revenue Service. c.the public.
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2 - 1 The Recording Process TRUE-FALSE STATEMENTS 1.A new account is opened for each transaction entered into by a business firm. 2.The recording process becomes more efficient and informative if all transactions are recorded in one account. 3.When the volume of transactions is large, recording them in tabular form is more efficient than using.
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2 - 1 The Recording Process 138.A trial balance would only help in detecting which one of the following errors? a.A transaction that is not journalized b.A journal entry that is posted twice c.Offsetting errors are made in recording the transaction d.A transposition error when transferring the debit side of journal entry to the ledger 139.An account.
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2 - 1 The Recording Process 68.Which of the following statements is not true? a.Expenses increase owner's equity. b.Expenses have normal debit balances. c.Expenses decrease owner's equity. d.Expenses are a negative factor in the computation of net income. 69.A credit to a liability account a.indicates an increase in the amount owed to creditors. b.indicates a decrease in the amount.
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2 - 1 The Recording Process Ex. 181 Transactions for Tom Petty Company for the month of October are presented below. Journalize each transaction and identify each transaction by number. You may omit journal explanations. 1.Invested $40,000 cash in the business. 2.Purchased land costing $28,000 for cash. 3.Purchased equipment costing $15,000 for $3,000 cash and the.
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1 - 1 Accounting in Action 141.Misra Company compiled the following financial information as of December 31, 2014: Revenues$340,000 Owner’s Capital (1/1/14)140,000 Equipment80,000 Expenses250,000 Cash90,000 Owner’s Drawings20,000 Supplies10,000 Accounts payable40,000 Accounts receivable70,000 Misra’s owner’s equity on December 31, 2014 is a.$90,000. b.$140,000. c.$210,000. d.$250,000. 142.Teamboo Company’s owner’s equity at the beginning of August 2014 was $750,000.  During the month, the company earned net income of $175,000 and.
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1 - 1 Accounting in Action EXERCISES Ex. 189 Below is a list of important abbreviations widely used in business. For each abbreviation give the full designation.               1.CPA___________________________________________               2.IRS____________________________________________               3.FBI____________________________________________               4.FASB__________________________________________               5.GAAP_________________________________________               6.SEC___________________________________________ Ex. 190 Determine the missing amount for each of the following.  Assets=Liabilities+Owner's Equity 1.(a)$55,000$95,0002.$125,000(b)$85,0003.$160,000$65,000(c) Ex. 191 For the items listed below, fill in the appropriate code.
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2 - 1 The Recording Process 48.The double-entry system requires that each transaction must be recorded a.in at least two different accounts. b.in two sets of books. c.in a journal and in a ledger. d.first as a revenue and then as an expense. 49.A credit is not the normal balance for which account listed below? a.Capital account b.Revenue account c.Liability.
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2 - 1 The Recording Process BE 164 Identify the impact on the accounting equation of the following transactions. 1.Purchased 36-month insurance policy for cash. 2.Purchased supplies on account. 3.Received utility bill to be paid at later date. 4.Paid utility bill previously accrued. BE 165 Journalize the following transactions for Xiu Xiu Company for June 2014, the company’s first.
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1 - 1 Accounting in Action Ex. 197 From the following list of selected accounts taken from the records of Ward Homeopathic Center, identify those that would appear on the balance sheet. a. Owner’s Capitalf.Accounts Payable b.Service Revenueg.Cash c.Landh.Rent Expense d.Salaries and Wages Expensei.Supplies e.Notes Payablej.Utilities Expense Ex. 198 Selected transactions for Mountain Goats Tree Service are listed below. 1. Made.
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2 - 1 The Recording Process 78.Chik Chik Company showed the following balances at the end of its first year: Cash$  6,000 Prepaid insurance9,400 Accounts receivable7000 Accounts payable5,600 Notes payable8,400 Owner’s Capital2,800 Owner’s Drawings1,400 Revenues44,000 Expenses35,000 What did Chik Chik Company show as total credits on its trial balance? a.$51,400 b.$60,800 c.$62,200 d.$70,200 79.Electrelane Company showed the following balances at the end of its first year: Cash$  4,000 Prepaid.
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1 - 1 Accounting in Action BRIEF EXERCISES BE 178 Match the following external users of financial accounting information with the type of decision that user will make with the information. a.Creditor b.Investor c.Regulatory Agency dInternal Revenue Service _______(1)Is the company operating within prescribed guidelines? _______(2)Is the company complying with tax laws? _______(3)Is the company able to pay its debts? _______(4)Is the.
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2 - 1 The Recording Process Ex. 175 During an accounting period, a business has numerous transactions affecting each of the following accounts. State for each account whether it is likely to have (a) debit entries only, (b) credit entries only, or (c) both debit and credit entries. ____(1)Advertising Expense_____(6)Owner’s Drawings ____(2)Service Revenue_____(7)Cash ____(3)Accounts Payable_____(8)Salaries and.
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2 - 1 The Recording Process Ex. 177 For each of the following accounts indicate (a) the type of account (Asset, Liability, Owner's Equity, Revenue, Expense), (b) the debit and credit effects, and (c) the normal account balance. Example 0.Casha.Asset account b.Debit increases, credit decreases c.Normal balance - debit                 Accounts                1.Accounts Payable              5.              Service Revenue 2.Accounts Receivable              6.              Insurance Expense 3.Owner’s.
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1 - 1 Accounting in Action BE 183 Classify each of these items as an asset (A), liability (L), or owner’s equity (OE). _____1.Accounts receivable _____2.Accounts payable _____3.Owner’s Capital _____4.Supplies _____5.Utilities expense _____6.Cash _____7.Notes payable _____8.Equipment BE 184 Identify the impact on the accounting equation of each of the following transactions. 1.Purchase office supplies on account. 2.Paid secretary weekly salary. 3.Purchased office furniture for cash. 4.Received monthly.
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2 - 1 The Recording Process Ex. 172 Selected transactions for A. Byrjun, a property manager, in her first month of business, are as follows. Jan. 2 Invested $15,000 cash in business. 3 Purchased used car for $5,200 cash for use in business. 9 Purchased supplies on account for $500. 11 Billed customers $2,100 for services performed. 16 Paid.
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1 - 1 Accounting in Action COMPLETION STATEMENTS 226.Accounting is an information system that identifies, _____________, and _____________ the economic events of an organization. 227.The mere recording of economic events is called ______________, and is just one part of the _______________ process. 228.The three major services rendered by a certified public accountant are ______________, ________________,.
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1 - 1 Accounting in Action 171.The internal control standards applicable to Sarbanes-Oxley apply to a.all U.S. and international companies. b.U.S. and international companies listed on U.S. exchanges. c.International companies listed on U.S. exchanges. d.U.S. companies listed on U.S. exchanges. 172.The concern about international companies adopting SOX-type standards centers on a.cost-benefit analysis. b.ethics issues. c.the governing authorities. d.comparability. 173.Financial accounting ethics violations.
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2 - 1 The Recording Process 21.Transactions are recorded in alphabetic order in a journal. 22.A journal is also known as a book of original entry. 23.The complete effect of a transaction on the accounts is disclosed in the journal. 24.The account titles used in journalizing transactions need not be identical to the account titles.
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2 - 1 The Recording Process BE 168 Prepare a trial balance from the ledger accounts of Black Diamond Express as of January 31, 2014. Accounts Payable$   1,100Rent Expense$   500 Accounts Receivable1,700Service Revenue3,000 Cash1,400Supplies200 Owner’s Capital2,000Salaries and Wages Expense1,300 Owner’s Drawings1,000 BE 169 Prepare a corrected trial balance for Stereolab Company. All accounts should have a normal balance. STEROELAB COMPANY Trial Balance For.
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2 - 1 The Recording Process 108.When journalizing, the reference column is a.left blank. b.used to reference the source document. c.used to reference the journal page. d.used to reference the financial statements. 109.On June 1, 2014 Ted Leo Le buys a copier machine for his business and finances this purchase with cash and a note. When journalizing.
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2 - 1 The Recording Process BRIEF Exercises BE 159 At June 1, 2014, Coquehcot Industries had an accounts receivable balance of $12,000. During the month, the company performed credit services of $30,000 and collected accounts receivable of $22,000. What is the balance in accounts receivable at June 30, 2014? BE 160 TNT has the following.
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2 - 1 The Recording Process 98.A journal provides a.the balances for each account. b.information about a transaction in several different places. c.a list of all accounts used in the business. d.a chronological record of transactions. 99.When three or more accounts are required in one journal entry, the entry is referred to as a a.compound entry. b.triple entry. c.multiple entry. d.simple.
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2 - 1 The Recording Process Exercises Ex. 170 The chart of accounts used by Notwist Copy Company is listed below. You are to indicate the proper accounts to be debited and credited for the following transactions by writing the account number(s) in the appropriate boxes. CHART OF ACCOUNTS 101Cash209Unearned Service Revenue 112Accounts Receivable301Owner’s Capital 125Supplies306Owner’s Drawings 157Equipment400Service Revenue 200Notes.
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1 - 1 Accounting in Action 131.The primary purpose of the statement of cash flows is to report a.a company's investing transactions. b.a company's financing transactions. c.information about cash receipts and cash payments of a company. d.the net increase or decrease in cash. 132.All of the financial statements are for a period of time except the a.income statement. b.owner's.
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2 - 1 The Recording Process 128.After journal entries are posted, the reference column a.of the general journal will be blank. b.of the general ledger will show journal page numbers. c.of the general journal will show "Dr" or "Cr". d.of the general ledger will show account numbers. 129.The explanation column of the general ledger a.is completed without exception. b.is.
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1 - 1 Accounting in Action S-A E  241 (Ethics) Joanna Newsom owns and operates Joanna's Burgers, a small fast food store, located at the edge of City College campus in Newton, Ohio. After several very profitable years, Joanna's Burgers began to have problems. Most of the problems were related to Joanna's expansion.
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1 - 1 Accounting in Action Ex. 202 The Constantine Company had the following assets and liabilities on the dates indicated. December 31 Total Assets Total Liabilities 2013 $480,000 $250,000 2014 $460,000 $220,000 2015 $590,000 $300,000 Constantine began business on January 1, 2013, with an investment of $100,000. Instructions From an analysis of the change in owner’s equity during the.
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1 - 1 Accounting in Action Ex. 205 Analyze the transactions of a business organized as a proprietorship described below and indicate their effect on the basic accounting equation. Use a plus sign (+) to indicate an increase and a minus sign (–) to indicate a decrease. Assets=Liabilities+Owner's Equity               1.Received cash for services rendered.____             .
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1 - 1 Accounting in Action Ex. 218 Prepare an income statement, an owner's equity statement, and a balance sheet for the accupuncture practice of Golda Bear, from the items listed below for the month of September. Owner’s Capital, September 1$47,000 Accounts payable7,000 Equipment35,000 Service revenue28,000 Owner’s Drawings6,000 Insurance expense4,500 Cash3,000 Utilities expense700 Supplies4,800 Salaries and wages expense9,000 Accounts receivable14,000 Rent expense5,000 GOLDA BEAR, ACCUPUNCTURIST Income Statement For.
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2 - 1 The Recording Process 118.On August 13, 2014, Swell Maps Enterprises purchased office equipment for $1,500 and office supplies of $200 on account. Which of the following journal entries is recorded correctly and in the standard format? a.Equipment1,500 Account Payable1,700 Supplies200 b.Equipment.1,500 Supplies200 Accounts Payable1,700 c.Accounts Payable1,700 Equipment1,500 Supplies200 d.Equipment1,500 Supplies200 Accounts Payable.1,700 119.Delta72 Company received a cash advance of $700 from a.
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1 - 1 Accounting in Action Ex. 215 The following information relates to Bonnie Billy Co. for the year 2014. Owner’s Capital, January 1, 2014 $ 67,000 Advertising expense $6,500 Drawings during 2014      6,000 Rent expense   9,500 Service revenue    65,500 Utilities expense   1,400 Salaries and wages expense    29,000 Instructions After analyzing the data, prepare.
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1 - 1 Accounting in Action Ex. 220 Listed below in alphabetical order are the balance sheet items of Rock Plaza Central Company at December 31, 2014. Prepare a balance sheet and include a complete heading. Accounts Payable$  24,000 Accounts Receivable15,000 Buildings51,000 Cash7,000 Owner’s Capital102,000 Land42,000 Equipment11,000 LO8   BT: AP   Difficulty: Medium   TOT: 5 min.   AACSB: Reflective Thinking   AICPA BB: Critical.
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1 - 1 Accounting in Action Ex. 212 There are ten transactions listed below. Match the transactions that have the identical effect on the accounting equation. You should end up with 5 matches. a.Receive cash from customers on account. b.Initial cash contribution by an owner. c.Pay cash to reduce an accounts payable. d.Purchase supplies for cash. e.Pay cash.
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2 - 1 The Recording Process 58.Which of the following is not true of the terms debit and credit? a.They can be abbreviated as Dr. and Cr. b.They can be interpreted to mean increase and decrease. c.They can be used to describe the balance of an account. d.They can be interpreted to mean left and right. 59.An.
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2 - 1 The Recording Process Ex. 179 Journalize the following business transactions in general journal form. Identify each transaction by number. You may omit explanations of the transactions.               1.The owner, Athena Lu, invests $40,000 in cash in starting a real estate office operating as a sole proprietorship.               2.Purchased $400 of supplies on.
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1 - 1 Accounting in Action MATCHING 236.Match the items below by entering the appropriate code letter in the space provided. A.CPAF.Corporation B.BudgetingG.Assets C.SECH.Equities D.ProprietorshipI.Expenses E.Economic Entity AssumptionJ.Transaction _____              1.Activities of an entity must be kept separate from its owner’s activities. _____              2.Consumed assets or services. _____              3.Ownership is limited to one person. _____              4.Offers expert accounting service to the general public. _____             .
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