Exam 2: Analyzing and Recording Transactions

Funky Music purchased $25,000 of equipment for cash.The Equipment asset account is _______________ for $25,000 and the cash account is _______________ for $25,000. Answers need to appear in the order as shown above.

Based on the following trial balance for Barry's Automotive Shop,prepare an income statement,statement of owner's equity,and a balance sheet.Barry made no additional investments in the company during the year.

Andrea Apple opened Apple Photography on January 1 of the current year.During January,the following transactions occurred and were recorded in the company's books: 1.Andrea invested $13,500 cash in the business. 2)Andrea contributed $20,000 of photography equipment to the business. 3)The company paid $2,100 cash for an insurance policy covering the next 24 months. 4)The company received $5,700 cash for services provided during January. 5)The company purchased $6,200 of office equipment on credit. 6)The company provided $2,750 of services to customers on account. 7)The company paid cash of $1,500 for monthly rent. 8)The company paid $3,100 on the office equipment purchased in transaction #5 above. 9)Paid $275 cash for January utilities. Based on this information,the balance in the cash account at the end of January would be:

Identify the account below that is classified as an assetaccount:

If a company provides services to a customer on credit,the company providing the service should credit Accounts Receivable.

Joel Consulting received $3,000 from a customer for services provided.Joel's general journal entry to record this transaction will be:

At a given point in time,a business's trial balance is a list of all of its general ledger accounts and their balances.

J.Brown Consulting paid $2,500 cash for a 5-month insurance policy which begins on December 1.Given the choices below,determine the general journal entry that J.Brown Consulting will make to record this transaction.

While in the process of posting from the journal to the ledger,a company failed to post a $500 debit to the Equipment account.The effect of this error will be that:

Given each of the following errors,indicate on the table below the amount by which the trial balance will be out of balance and which trial balance column (debit or credit)will have the larger total as a result of the error. a.$100 debit to Cash was debited to the Cash account twice. b.$1,900 credit to Sales was posted as a $190 credit. c.$5,000 debit to Office Equipment was debited to Office Supplies. d.$625 debit to Prepaid Insurance was posted as a $62.50 debit. e.$520 credit to Accounts Payable was not posted.

The accounting process begins with:

Willow Rentals purchased office supplies on credit.The general journal entry made by Willow Rentals will include a:

Richard Redden contributed $70,000 in cash and land worth $130,000 to open a new business,RR Consulting.Which of the following general journal entries will RR Consulting make to record this transaction?

A debit is used to record an increase in all of the following accounts except:

The _______________________ is a record containing all accounts used by a company as well as the transactions and ending balances of each of the accounts. Either answer is acceptable.

A debit:

Gi Gi's Dance Studio provided $150 of dance instruction and rented out its dance studio to the same client for another $100.The client paid immediately.Identify the general journal entry below that Gi Gi's will make to record the transaction.

On January 1 of the current year,Jimmy's Sandwich Company reported owner's capital totaling $122,500.During the current year,total revenues were $96,000 while total expenses were $85,500.Also,during the current year Jimmy withdrew $20,000 from the company.No other changes in equity occurred during the year.If,on December 31 of the current year,total assets are $196,000,the change in owner's capital during the year was:

If cash was incorrectly debited for $100 instead of correctly crediting it for $100,the cash account's balance will be overstated (too high).

On February 5,Teddy's Catering purchased an oven that cost $35,000.The firm made a down payment of $5,000 cash and signed a long-term note payable for the balance.Show the general journal entry to record this transaction.