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Exam 2: Analyzing Transactions

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Question 21

Multiple Choice

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Which of the following entries records the purchase of common stock by stockholders?

A) debit Common Stock; credit Accounts Receivable
B) debit Cash; credit Common Stock
C) debit Dividends; credit Cash
D) debit Fees Earned; credit Common Stock

E) A) and D)
F) All of the above

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Question 22

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On August 30, JumpStart incurred the following expenses: Payment to the landlord for August rent, $2,300 Payment to the Gas & Electric Company for August's bill, $525 Payment of employee wages for the last half of August, $1,750 Payment of shopping center's parking lot cleaning fee, $275 Journalize these payments as one journal entry.

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Question 23

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The right side of a T account is known as a debit and the left side is known as a credit.

On January 31, the cash account balance was $96,750. During January, cash receipts totaled $305,000 and cash payments totaled $375,880. Determine the cash balance on January 1.

Which side of the account increases the cash account?

Which of the following statements is not true about liabilities?

Liabilities are increased with debits and decreased with credits.

A client has a massage and asks the company bookkeeper to mail her the bill. The bookkeeper should make which entry to record the invoice?

Journalize the entries to correct the following errors: (a)A purchase of supplies for $500 on account was recorded and posted as a debit to Supplies for $200 and as a credit to Accounts Receivable for $200.(b)A receipt of $2,500 from fees earned was recorded and posted as a debit to Fees Earned for $2,500 and a credit to Cash for $2,500.

The accounts in the ledger of Devers Gym as of August 31 are listed in alphabetical order as follows. All accounts have normal balances. The balance of the cash account has been omitted. Prepare an unadjusted trial balance, listing the accounts in proper sequence and inserting the missing figure for cash.​

Dividends decrease stockholders' equity and are listed on the income statement as a deduction from revenue.

Net income will result when

For each of the following errors, considered individually, indicate whether the error would cause the trial balance totals to be unequal. If the error would cause the trial balance totals to be unequal, indicate whether the debit or credit total is higher and by how much.​ A.Payment of a cash dividend $6,800 was journalized and posted as a debit of $8,600 to Salaries Expense and a credit of $8,600 to Cash.B.A fee of $9,780 earned was debited to Accounts Receivable for $7,980 and credited to Fees Earned for $9,780.C.A payment of $3,000 to a creditor was posted as a credit of $3,000 to Accounts Payable and a credit of $3,000 to Cash.

Of the following, which is an internal report that will determine if the total of the debit balances equal the total of the credit balances in the ledger?

The accounts in the ledger of Monroe Entertainment Co. are listed below. All accounts have normal balances.​ Total liabilities are

Revenue accounts are increased by credits.

The recording of cash payments from the cash account is done by entering the amount as a credit.

Accounts

A cash payment is recorded in the cash account as

The post reference notation used in the ledger is the account number.