Exam 2: Accounting for Transactions

What are the total assets shown on the trial balance below? Common stock……$120,000 Accounts payable…...$25,000 Cash……………….$116,640 Accounts receivable.. $22,450 Supplies………… $ 1,500 Office equipment…...$23,300 Prepaid rent…….... $ 3,200 Unearned revenue…. $ 4,152 Service revenue..... $ 20,000 Utilities expense….... $ 422 Retained earnings... $ 30,000 Shaving equipment… $31,640

Accounting records are also referred to as the books.

Source documents:

A company has total liabilities of $550 million and total equity of $300 million. Calculate this company's debt ratio.

Cash dividends should be treated as an expense to the business.

The difference between total debits and total credits for an account, including any beginning balance, is the ________________________.

Which of the following statements about the Cash account are true?

The balances for the accounts of Mike's Maintenance, Inc. for the year ended December 31 are shown below. Each account shown had a normal balance. Accounts payable \ 6,500 Wages expense \ 36,000 Accounts receivable 7,000 Rent expense 6,000 Cash ? Retained earnings 68,700 Maintenance supplies 1,200 Building 125,000 Land 50,000 Supplies expense 21,500 Unearned maintenance fees 4,000 Common stock 50,000 Maintenance revenue 175,000 Dividends 48,000 Calculate the correct balance for Cash and prepare a trial balance.

In a double-entry accounting system, the total amount debited must always equal the-total amount credited.

Josephine's Bakery had the following assets and liabilities at the beginning and end of the current year: Assets Liabilities Beginning of the year \ 114,000 \ 68,000 End of the year 135,000 73,000 If the owners made no investments in the business and no dividends were paid during the year, what was the amount of net income earned by Josephine's Bakery during the current year?

It is not necessary to keep separate accounts for all items of importance for business decisions.

Revenues and expenses are two categories of ____________________ accounts.

A report that lists accounts and their balances, in which the total debit balances should equal the total credit balances, is called a(n):

A revenue account normally has a debit balance.

During the month of February, Hoffer Company had cash receipts of $7,500 and cash disbursements of $8,600. The February 28 cash balance was $1,800. What was the January 31 beginning cash balance?

Debits increase both asset and expense accounts.

For what reason do most sellers require customers to have their receipts in order to exchange or return purchased items?

On November 30, a company had an Accounts Receivable balance of $5,100. During the month of December, total credits to Accounts Receivable were $76,000 from customer payments. The December 31 Accounts Receivable balance was $43,000. What was the amount of credit sales during December?

_____________________________ requires that the impact of each transaction be recorded in at least two accounts. It also means that total amounts debited must equal total amounts credited for each transaction.