Exam 2: Analyzing and Recording Transactions

Mary Sunny began business as Sunny Law Firm on November 1.Record the following November transactions by making entries directly to the T-accounts provided.Then,prepare a trial balance,as of November 30. a)Mary invested $15,000 cash and a law library valued at $6,000. b)Purchased $7,500 of office equipment from John Bronx on credit. c)Completed legal work for a client and received $1,500 cash in full payment. d)Paid John Bronx.$3,500 cash in partial settlement of the amount owed. e)Completed $4,000 of legal work for a client on credit. f)Mary withdrew $2,000 cash for personal use. g)Received $2,500 cash as partial payment for the legal work completed for the client in (e). h)Paid $2,500 cash for the legal secretary's salary.

Golddigger Services Inc.provides services to clients.On May 1,a client prepaid Golddigger Services $60,000 for 6-months services in advance.Golddigger Services' general journal entry to record this transaction will include a:

Withdrawals by the owner are a business expense.

A company's ledger is:

The posting process is the link between the _______________ and the _____________. Answers can be recorded in either order.

Crediting an expense account decreases it.

The following transactions occurred during July: 1.Received $900 cash for services provided to a customer during July. 2)Received $2,200 cash investment from Bob Johnson,the owner of the business. 3)Received $750 from a customer in partial payment of his account receivable which arose from sales in June. 4)Provided services to a customer on credit,$375. 5)Borrowed $6,000 from the bank by signing a promissory note. 6)Received $1,250 cash from a customer for services to be rendered next year. What was the amount of revenue for July?

Debits increase asset and expense accounts.

Which of the following is not a step in the accounting process?

ABC Catering received $800 cash from a customer for catering services to be provided next month.Given the choices below,determine the general journal entry that ABC Catering will make to record this transaction.

The general journal is known as the book of final entry because financial statements are prepared from it.

The purchase of supplies on credit should be recorded with a debit to Supplies and a credit to Accounts Payable.

The journal is known as a book of original entry.

_____________________________ requires that each transaction affect,and be recorded in,at least two accounts.It also means that total amounts debited must equal total amounts credited for each transaction.

A business's source documents may include all of the following except:

Which financial statement reports an organization's financial position at a single point in time?

An account used to record the owner's investments in a business is called a(n):

All of the following statements accurately describe the debt ratio except.

_______________ is the process of transferring journal entry information from the journal to the ledger.

Increases in liability accounts are recorded as debits.