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Exam 2: Analyzing Transactions

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Question 41

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The accounts in the ledger of Monroe Entertainment Co. are listed in alphabetical order. All accounts have normal balances. $\begin{array}{llll}\text { Accounts Payable } & 1,500 & \text { Fees Earned } & 3,600 \\\text { Accounts Receivable } & 1,800 & \text { Insurnce Expense } & 1,300 \\\text { Prepaid Insurance } & 2,000 & \text { Land } & 3,000 \\\text { Cash } & 3,200 & \text { Wages Expense } & 1,400 \\\text { Drawing } & 1,200 & \text { Capital } & 8,800\end{array}$ The total of all the assets is:

A) $10,000
B) $8,000
C) $9,700
D) $9,800

E) None of the above
F) C) and D)

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Question 42

Multiple Choice

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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?

A) Cash, debit; Wages Expense, credit
B) Wages Payable, debit; Wages Expense, credit
C) Wages Expense, debit, Cash, credit
D) Cash, debit; Wages Payable, credit

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

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Question 43

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To determine the balance in an account, always subtract credits from debits.

On September 1st, Erika Company purchased land for $47,500 cash. Write the journal entry in the space below.

Which of the following groups of accounts have a normal debit balance?

On the chart of accounts, the balance sheet accounts are normally listed in the following order

Journalizing transactions using the double-entry bookkeeping system will eliminate fraud.

Which group of accounts is comprised of only assets?

Increases and decreases in various types of accounts are listed below. In each case, indicate by "Dr." or "Cr." (a) whether the change in the account would be recorded as a debit or a credit and (b) whether the normal balance of the account is a debit or a credit.

Which of the following applications of the rules of debit and credit is true?

Expense accounts are increased by credits.

A proof of the equality of debits and credits in the ledger at the end of an accounting period is called a balance sheet.

A credit may signify a

Discuss and describe how errors in accounts can be found.

On October 17th Nikle Company purchased a building and a plot of land for $750,000. The building was valued at $500,000 while the land carried a value of $250,000. Nikle paid $300,000 down in cash and signed a notes payable for the balance. In the space below write the journal entry.

The chart of account for the Miguel Company includes some of the following accounts: $\begin{array}{|l|l|}\hline \text { Account Name } & \text { Account Number } \\\hline \text { Cash } & 11 \\\hline \text { Accounts Receivable } & 13 \\\hline \text { Prepaid Insurance } & 15 \\\hline \text { Accounts Payable } & 21 \\\hline \text { Unamed Revenue } & 24 \\\hline \text { Miguel, Capital } & 31 \\\hline \text { Miguel, Drawing } & 32 \\\hline \text { Fees Earned } & 41 \\\hline \text { Salaries Expense } & 54 \\\hline \text { Rent Expense } & 56 \\\hline & \\\end{array}$ On the journal page 3, the following transaction was found: $\begin{array} { | l | l | l | } \hline \text { Cush }~~~~~~ & ~~~~~~640 &~~~~~~~~~~~~ \\\hline \text { Fess Earned } & & 640 \\\hline & & \\\end{array}$ What is the post reference that will be found on the journal entry?

On January 1, 2010, Cary Parsons established a catering service. Listed below are accounts she would like to open in the general ledger. List the accounts in the order in which they should appear in the ledger and propose a two digit account numbering scheme that is consistent with the rules of a proper chart of accounts.

The normal balance of the drawing account is a debit.

The post reference notation used in the journal is the page number.

The post reference columns are used to trace transactions from the journal to the accounts. What will be posted on the post reference column of (a) the journal and (b) on the account?