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Ex. 180 Identify the accounts to be debited and credited for each of the following transactions. 1.The owner, O. Gulag, invested $8,000 cash in the business.2.Purchased supplies on account for $1,000.3.Billed customers $2,000 for services performed.4.Paid salaries of $1,200. Ex. 181 Transactions for Joan Jett Company for the month of October are presented below..
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EXERCISES Ex. 217 The balance sheets of Professional Painters include the following: 12/31/1612/31/15 Interest Receivable$0$4,800 Supplies3,3005,000 Salaries and Wages Payable5,9007,600 Unearned Service Revenue2,500-0- The income statement for 2016 shows the following: Interest Revenue$19,400 Service Revenue76,700 Supplies Expense6,700 Salaries and Wages Expense39,000 Instructions Calculate the following for 2016: 1.Cash received for interest. 2.Cash paid for supplies. 3.Cash paid for salaries and wages. 4.Cash received for revenue. .
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Ex. 178 For each transaction given, enter in the tabulation given below a "D" for debit and a "C" for credit to reflect the increases and decreases of the assets, liabilities, and owner’s equity accounts. In some cases there may be a "D" and a "C" in the same box. Transactions:               1.Owner.
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88.Accrued expenses are a.paid and recorded in an asset account before they are used or consumed. b.paid and recorded in an asset account after they are used or consumed. c.incurred but not yet paid or recorded. d.incurred and already paid or recorded. 89.Unearned revenues are a.cash received and a liability recorded before services are performed. b.revenue for.
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BRIEF EXERCISES BE 198 State whether each situation is a prepaid expense (PE), unearned revenue (UR), accrued revenue (AR) or an accrued expense (AE). 1.Unrecorded interest on savings bonds is $180. 2.Property taxes that have been incurred but that have not yet been paid or recorded amount to $500. 3.Legal fees of $1,200 were collected.
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58.Which of the following is in accordance with generally accepted accounting principles? a.Accrual-basis accounting b.Cash-basis accounting c.Both accrual-basis and cash-basis accounting d.Neither accrual-basis nor cash-basis accounting 59.The revenue recognition principle dictates that revenue should be recognized in the accounting records a.when cash is received. b.when the performance obligation is satisfied. c.at the end of the month. d.in the period.
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Ex 193 The bookkeeper for Darrel Johnston Auto Repair made a number of errors in journalizing and posting, as described below. 1. A debit posting of $600 to Accounts Payable was omitted. 2. A debit posting of $700 for Prepaid Insurance was debited to Insurance Expense. 3. A collection from a customer of $150 in.
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78.An adjusting entry a.affects two balance sheet accounts. b.affects two income statement accounts. c.affects a balance sheet account and an income statement account. d.is always a compound entry. 79.The preparation of adjusting entries is a.straight forward because the accounts that need adjustment will be out of balance. b.often an involved process requiring the skills of a professional. c.only.
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a31.To be faithfully representative, accounting information should predict future events, confirm prior expectations, and be reported on a timely basis. a32.Consistent use of the same accounting principles and methods is necessary for meaningful analysis of trends within a company. a33.Consistency in accounting means that a company uses the same accounting principles from.
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108.The balance in the Prepaid Rent account before adjustment at the end of the year is $24,000, which represents three months’ rent paid on December 1. The adjusting entry required on December 31 is to a.debit Rent Expense, $8,000; credit Prepaid Rent, $8,000. b.debit Rent Expense, $16,000; credit Prepaid Rent $16,000. c.debit Prepaid.
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S-A E 211  All recordable transactions are initially recorded in the journal. Discuss the contributions that the journal makes to the recording process. Solution 211 The journal makes several significant contributions to the recording process: (1) It discloses in one place the complete effects of a transaction; (2) It provides a chronological.
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98.Bichon Company purchased equipment for $6,720 on December 1. It is estimated that annual depreciation on the equipment will be $1,680. If financial statements are to be prepared on December 31, the company should make the following adjusting entry: a.Debit Depreciation Expense, $1,680; Credit Accumulated Depreciation, $1,680. b.Debit Depreciation Expense, $140; Credit.
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128.On January 1, 2015, Murphy Inc. purchased equipment for $38,400. The company is depreciating the equipment at the rate of $800 per month. At January 31, 2016, the balance in Accumulated Depreciation is a.$800. b.$9,600. c.$10,400. d.$28,000. 129.On January 1, 2016, Pulque Company purchased equipment for $51,000. The company is depreciating the equipment at the.
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MULTIPLE CHOICE QUESTIONS 48.Monthly and quarterly time periods are called a.calendar periods. b.fiscal periods. c.interim periods. d.quarterly periods. 49.The time period assumption states that a.a transaction can only affect one period of time. b.estimates should not be made if a transaction affects more than one time period. c.adjustments to the company’s accounts can only be made in the time.
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BE 207 Identify the impact on the balance sheet if the following information is not used to adjust the accounts. 1.Supplies consumed totaled $2,750. 2.Interest accrues on notes payable at the rate of $180 per month. 3.Insurance of $470 expired during the month. 4.Plant and equipment are depreciated at the rate of $1,450 per month. BE.
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COMPLETION STATEMENTS 194.An _______________ is a record of increases and decreases in specific assets, liabilities, and owner’s equity items.               195.The process of entering an amount on the left side of an account is called ____________ the account, and making an entry on the right side is called _________________ the account.               196.______________,.
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MATCHING 204.Match the items below by entering the appropriate code letter in the space provided. A.AccountF.Journal B.Normal account balanceG. Posting C.DebitH.Chart of accounts D.Revenue accountI.Trial balance E.Compound entryJ.Simple entry _____              1.An entry that involves three or more accounts. _____              2.Transferring journal entries to ledger accounts. _____              3.The side which increases an account. _____              4.A list of all the accounts used.
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Ex. 218 Hal Corp. prepared the following income statement using the cash basis of accounting: HAL CORP. Income Statement, Cash Basis For the Year Ended December 31, 2016 Service revenue (does not include $25,000 of services rendered on account because the collection will not be until 2017).............................$370,000 Expenses (does not include $15,000 of expenses on account.
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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, Mai Li, invests $40,000 in cash in starting a real estate office operating as a sole proprietorship.               2.Purchased $500 of supplies on credit.               3.Purchased equipment for.
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21.Unearned revenue is a prepayment that requires an adjusting entry when services are performed. 22.Asset prepayments become expenses when they expire. 23.A contra asset account is subtracted from a related account in the balance sheet. 24.If prepaid costs are initially recorded as an asset, no adjusting entries will be required in the future. 25.The.
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138.Tom See has performed $4,000 of CPA services for a client but has not billed the client as of the end of the accounting period. What adjusting entry must Tom make? a.Debit Cash and credit Unearned Service Revenue b.Debit Accounts Receivable and credit Unearned Service Revenue c.Debit Accounts Receivable and credit Service Revenue d.Debit.
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Ex. 174 For each of the following accounts, indicate the effects of (a) a debit and (b) the normal account balance.              1.Notes Payable              2.Prepaid Insurance              3.Salaries and Wages Expense              4.Service Revenue              5.Equipment              6.Owner’s Capital Ex. 175 During an accounting period, a business has numerous transactions affecting each of the following accounts. State for.
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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 Capital              7.              Notes Payable 4.Owner’s.
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11.Adjusting entries are not necessary if the trial balance debit and credit column balances are equal. 12.An adjusting entry always involves two balance sheet accounts. 13.Adjusting entries are often made because some business events are not recorded as they occur. 14.Adjusting entries are recorded in the general journal but are not posted to.
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S-A E  215(Ethics) Terry Bradshaw was appointed the manager of Steelers Properties, a recently formed company that manages residential rental properties. Linda Cohen is the accountant. She prepared a chart of accounts based on an analysis of the expenditures of the company. One of the largest expense categories is Travel and.
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Ex. 176 Eight transactions are recorded in the following T-accounts: CASHACCOUNTS RECEIVABLE (1)25,000(2)3,500(5)27,500              (7)22,500 (7)22,500(3)1,950 (4)5,100 (6)8,000 (8)3,300 SUPPLIESEQUIPMENT (3)1,950(2)13,500 OWNER’S CAPITALSERVICE REVENUE (1)25,000(5)27,500 ACCOUNTS PAYABLEOWNER’S DRAWINGS (6)8,000(2)10,000(8)3,300 SALARIES AND WAGES EXPENSE (4)5,100 Ex. 176(cont.) Indicate for each debit and each credit:  (a) whether an asset, liability, capital, drawing, revenue, or expense account was affected and (b) whether the account was increased (+) or (–) decreased. Answers.
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118.Boneta City College sold season tickets for the 2016 football season for $250,000. A total of 8 games will be played during September, October and November. In September, three games were played. The adjusting journal entry at September 30 a.is not required. No adjusting entries will be made until the end.
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148.Employees at Mango Corporation are paid $18,000 cash every Friday for working Monday through Friday. The calendar year accounting period ends on Tuesday, December 31. How much salaries and wages expense should be recorded three days later on January 2? a.$18,000 b.$7,200 c.$10,800 d.None, matching requires the weekly salary to be accrued on December.
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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 the order in which.
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178.The revenue recognition principle dictates that revenue be recognized in the accounting period a.before it is earned. b.after it is earned. c.in which the performance obligation is satisfied. d.in which it is collected. 179.An expense is recorded under the cash basis only when a.services are performed. b.it is earned. c.cash is paid. d.it is incurred. 180.For prepaid expense adjusting entries a.an.
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aBE 216 Presented below are the basic assumptions and principles underlying financial statements. a.Historical cost principled.Going concern assumption b.Economic entity assumptione.Monetary unit assumption c.Full disclosure principlef.Periodicity assumption Identify the basic assumption or principle that is described below. _____1.The economic life of a business can be divided into artificial time periods. _____2.The business will continue in operation long.
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Ex. 223 The adjusted trial balance of the Chula Vista Paving Company includes the following balance sheet accounts that frequently require adjustment. For each account, indicate (a) the type of adjusting entry (prepaid expenses, unearned revenues, accrued revenues, or accrued expenses) and (b) the related account in the adjusting entry. (a)(b) Balance Sheet.
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Ex. 191 The ledger accounts of the Flex Gym at June 30, 2016 are shown below: Accounts Payable$   9,800 Accounts Receivable7,050 Buildings63,000 Owner’s Capital71,800 Cash6,200 Equipment42,500 Notes Payable46,000 Supplies350 Owner’s Drawings8,500 Ex. 191(cont.) Instructions Prepare a trial balance with the ledger accounts arranged in the proper financial statement order. Include the appropriate heading. .
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Ex. 222 Buena Vista Social Club accumulates the following adjustment data at December 31. 1.Revenue of $1,600 collected in advance has been recognized. 2.Salaries of $600 are unpaid. 3.Prepaid rent totaling $500 has expired. 4.Supplies of $450 have been used. 5.Revenue recognized but unbilled total $750. 6.Utility expenses of $250 are unpaid. 7.Interest of $300 has accrued on.
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188.Accrual-basis accounting is allowed under a.GAAP but not IFRS. b.IFRS but not GAAP. c.both IFRS and GAAP. d.neither IFRS nor GAAP. 189.Cash-basis accounting is allowed under a.GAAP but not IFRS. b.IFRS but not GAAP. c.both IFRS and GAAP. d.neither IFRS nor GAAP. 190.The time period assumption is used under a.GAAP but not IFRS. b.IFRS but not GAAP. c.both IFRS and GAAP. d.neither IFRS nor.
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TRUE-FALSE STATEMENTS 1.Many business transactions affect more than one time period. 2.The time period assumption states that the economic life of a business entity can be divided into artificial time periods. 3.The time period assumption is often referred to as the expense recognition principle. 4.A company’s calendar year and fiscal year are always the.
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Ex. 188 The trial balance of Red House Painters shown below does not balance. RED HOUSE PAINTERS Trial Balance June 30, 2016 ———————————————————————————————————————————    Debit   Credit Cash..................................................$  2,780 Accounts Receivable......................................7,420 Supplies...............................................600 Equipment.............................................8,300 Accounts Payable........................................$  9,777 Owner’s Capital..........................................1,952 Owner’s Drawings........................................1,300 Service Revenue.........................................15,200 Salaries and Wages Expense................................3,800 Maintenance and Repairs Expense............................    1,600      Totals............................................$25,800$26,929 An examination of the ledger and journal reveals the following errors: 1.Each of the above listed accounts has.
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BE 211 The adjusted trial balance of Wallowa Ranch Inc. on December 31, 2016 includes the following accounts: Accumulated Depreciation, $8,000; Depreciation Expense, $2,000; Notes Payable $7,800; Interest Expense $250; Utilities Expense, $370; Rent Expense, $800; Service Revenue, $24,600; Salaries and Wages Expense, $6,800; Supplies, $250; Supplies Expense, $1,500; Salaries and.
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Ex. 219 Before month-end adjustments are made, the February 28 trial balance of Donner’s Pass Hotel contains revenue of $8,100 and expenses of $4,700. Adjustments are necessary for the following items: ?Depreciation for February is $1,500. ?Revenue recognized but not yet billed is $1,700. ?Accrued interest expense is $500. ?Revenue collected in advance that is.
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BE 213 The adjusted trial balance of Malt Company at December 31, 2016 includes the following accounts: Owner’s Capital $16,200; Owner’s Drawings $7,300; Service Revenue $37,000; Salaries and Wages Expense $12,000; Insurance Expense $2,100; Rent Expense $3,600; Supplies Expense $2,500; and Depreciation Expense $3,000. Prepare an owner’s equity statement for the.
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Ex. 186 The bookkeeper for Panda Bear Yard Service made a number of errors in journalizing and posting as described below: 1.A debit posting to accounts receivable for $500 was omitted. 2.A payment of accounts payable for $600 was credited to cash and debited to accounts receivable. 3.A credit to accounts receivable for $950.
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Ex. 185 The transactions of Molina 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 Titles and ExplanationRef.DebitCredit ——————————————————————————————————————————— 2016 Sept.1Cash27,000 Owner’s Capital27,000 (Invested.
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SHORT-ANSWER ESSAY QUESTIONS S-A E  205 An account is an important accounting record where financial information is stored until needed. Briefly explain (1) the nature of an account, (2) the different types of accounts, and (3) the manner in which an account is increased and decreased and its normal balance. S-A E 206 Your.
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68.Under accrual-basis accounting a.cash must be received before revenue is recognized. b.net income is calculated by matching cash outflows against cash inflows. c.events that change a company’s financial statements are recognized in the period they occur rather than in the period in which cash is paid or received. d.the ledger accounts must be adjusted.
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