Exam 2: Accounting for Transactions

___________________ is a promise of payment from customers to sellers.

The first step in the analyzing and recording process is to analyze each transaction and event from source documents.

A column in journal and ledger accounts used to cross reference journal and ledger entries is the:

The four categories of equity accounts are _____________________, __________________, ______________________ and ______________________.

A debit is used to record:

Debit means the right-hand side of any account.

The balances for the accounts of Lance's Consulting Firm, Inc. for the year ended December 31 are shown below. Each account shown had a normal balance. Accounts payable \ 6,400 Wages expense \ 35,000 Accounts receivable 7,000 Rent expense 5,000 Cash 10,000 Retained earnings 68,700 Office supplies 1,000 Land 53,000 Building 99,000 Unearned revenue 7,000 Supplies expense 15,000 Dividends 20,000 Consulting revenue 150,000 Common stock 12,900 Calculate net income.

A collection of all accounts (with account balances) used by a business is called a:

An account format that is similar to a T-account in that it has columns for debits and credits but that is different in that it has columns for transaction date, explanation, and the account balance is the ___________________________________.

David Roberts is a real estate appraiser. Shown below are (a) several accounts in his ledger with each account preceded by an identification number and (b) several transactions completed by Roberts. Indicate the accounts debited and credited when recording each transaction by placing the proper account identification numbers to the right of each transaction. 1. Accounts Payable 8. Office Supplies Expense 2. Accounts Receivable 9. Prepaid Insurance 3. Appraisal Fees Earned 10. Salaries Expense 4. Cash 11. Telephone Expense 5. Insurance Expense 12. Unearned Appraisal Fees 6. Office Equipment 13. Common Stock 7. Office Supplies 14. Dividends

Which of the following statements is incorrect?

Source documents include all of the following except:

The record in which business transactions are first recorded is the:

Dolly Barton began Barton Office Services in October and during the month completed the following transactions: a. Invested $10,000 cash and $15,000 of computer equipment in exchange for common stock. b. Paid $500 cash for an insurance premium covering the next 12 months. c. Completed a word processing assignment for a customer and collected $1,000 cash. d. Paid $200 cash for office supplies. e. Paid $2,000 for October's rent. Prepare journal entries to record the above transactions. Explanations are unnecessary.

The general ledger of a business

A ___________________________ gives a complete record of each transaction in one place and shows debits and credits for each transaction.

The balances for the accounts of Lance's Consulting Firm, Inc. for the year ended December 31 are shown below. Each account shown had a normal balance. Accounts payable \ 6,400 Wages expense \ 35,000 Accounts receivable 7,000 Rent expense 5,000 Cash 10,000 Retained earnings 68,700 Office supplies 1,000 Land 53,000 Building 99,000 Unearned revenue 7,000 Supplies expense 15,000 Dividends 20,000 Consulting revenue 150,000 Common stock 12,900 Calculate total assets.

The balances for the accounts of Lance's Consulting Firm, Inc. for the year ended December 31 are shown below. Each account shown had a normal balance. Accounts payable \ 6,400 Wages expense \ 35,000 Accounts receivable 7,000 Rent expense 5,000 Cash 10,000 Retained earnings 68,700 Office supplies 1,000 Land 53,000 Building 99,000 Unearned revenue 7,000 Supplies expense 15,000 Dividends 20,000 Consulting revenue 150,000 Common stock 12,900 Calculate the debt ratio.

Compute net income for May based on the following transactions: May 1 paid $2,200 for May's rent. May 14 paid $1,200 for two weeks wages. May 15 performed $5,200 in consulting services on account. May 17 billed a customer $1,500 for services performed May 16. May 20 received $5,200 in payment for May 15 transaction. May 22 performed services and immediately collected $2,000. May 31 paid $500 for advertising in the local paper to take place in June.