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Exam 2: Analyzing Transactions

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Question 111

True/False

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A group of related accounts that make up a complete unit is called a trial balance.

A) True
B) False

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Question 112

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Which of the following abbreviations is correct?

A) Debit, "Dr"; Credit, "Cd"
B) Debit, "Db"; Credit, "Cr"
C) Debit, "Db"; Credit, "Cd"
D) Debit, "Dr"; Credit, "Cr"

E) C) and D)
F) B) and D)

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Question 113

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Joshua Scott invests $40,000 into his new business. How would this transaction be entered in the journal in good form?

If the two totals of a trial balance are not equal, it could be due to

Which of the following is true regarding normal balances of accounts?

Even when a trial balance is in balance, there may be errors in the individual accounts.

On January 7, Damien Lawson invests $45,000 to initiate the operation of his business, JumpStart. Provide the journal entry for this transaction.

Which of the following statements is not a purpose for the journal?

The erroneous moving of an entire number one or more spaces to the right or left, such as writing $85 as $850, is called a transposition.

The totals at the bottom of the trial balance and the totals at the bottom of the balance sheet both show equality and balancing and therefore should be equal.

On January 8, Damien Lawson transfers ownership of several pieces of office equipment to his new business, JumpStart. When new, these items were worth $72,500. The fair market value of the equipment is $60,000. Journalize this transfer.

Accounts are records of increases and decreases in individual financial statement items.

The chart of accounts for Corning Company includes the following: $\begin{array} { | l | c | } \hline{ \text { Account Name } } & \text { Account Number } \\\hline \text { Cash } & 11 \\\hline \text { Accounts Receivable } & 13 \\\hline \text { Prepaid Insurance } & 15 \\\hline \text { Accounts Payable } & 21 \\\hline \text { Unearned Revenue } & 24 \\\hline \text { Corning Capital } & 31 \\\hline \text { Corning Drawing } & 32 \\\hline \text { Fees Earned } & 41 \\\hline \text { Salaries Expense } & 54 \\\hline \text { Rent Expense } & 56 \\\hline\end{array}$ ? Page 3 of the journal contains the following entry: Prepaid Insurance........1,530 Cash.............................1,530 -The chart of accounts for Miguel Company includes the following:? $\begin{array} { | l | c | } \hline { \text { Account Name } } & \text { Account Number } \\\hline \text { Cash } & 11 \\\hline \text { Accounts Receivable } & 13 \\\hline \text { Prepaid Insurance } & 15 \\\hline \text { Accounts Payable } & 21 \\\hline \text { Unearned Revenue } & 24 \\\hline \text { Miguel, Capital } & 31 \\\hline \text { Miguel, Drawing } & 32 \\\hline \text { Fees Earned } & 41 \\\hline \text { Salaries Expense } & 54 \\\hline \text { Rent Expense } & 56 \\\hline\end{array}$ Page 3 of the journal contains the following transaction: $\begin{array} { | c | r | r | } \hline \text { Cash } & 640 & \\\hline \text { Fees Earned } & & 640 \\\hline\end{array}$ ?What posting references will be found in the journal entry?

The chart of accounts for Corning Company includes the following: $\begin{array} { | l | c | } \hline{ \text { Account Name } } & \text { Account Number } \\\hline \text { Cash } & 11 \\\hline \text { Accounts Receivable } & 13 \\\hline \text { Prepaid Insurance } & 15 \\\hline \text { Accounts Payable } & 21 \\\hline \text { Unearned Revenue } & 24 \\\hline \text { Corning Capital } & 31 \\\hline \text { Corning Drawing } & 32 \\\hline \text { Fees Earned } & 41 \\\hline \text { Salaries Expense } & 54 \\\hline \text { Rent Expense } & 56 \\\hline\end{array}$ ? Page 3 of the journal contains the following entry: Prepaid Insurance........1,530 Cash.............................1,530 -What is the posting reference that will be found in the cash account?

An overpayment error was discovered in computing and paying the wages of a Jamison Tree Trimming employee. When Jamison receives cash from the employee for the amount of the overpayment, which of the following entries will Jamison make?

Liabilities are debts owed by the business entity.

In which order are the accounts listed in the chart of accounts?

Posting a part of a transaction to the wrong account will cause the trial balance totals to be unequal.

Several types of errors can be made during the journalizing and posting process. Match the following with their best description. -Balance entered in wrong column or omitted

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