Exam 2: The Recording Process

Ex 190 The bookkeeper for Antony Johnson Auto Repair made a number of errors in journalizing and posting, as described below. 1. A credit posting of $500 to Accounts Receivable was omitted. 2. A debit posting of $750 for Prepaid Insurance was debited to Insurance Expense. 3. A collection from a customer of $100 in payment of its account owed was journalized and posted as a debit to Cash $100 and a credit to Service Revenue $100. 4. A credit posting of $350 to Interest Payable was made twice. 5. A cash purchase of supplies for $250 was journalized and posted as a debit to Supplies $25 and a credit to Cash $25. 6. A debit of $685 to Advertising Expense was posted as $658. Instructions For each error: (a) Indicate whether the trial balance will balance. (b) If the trial balance will not balance, indicate the amount of the difference. (c) Indicate the trial balance column that will have the larger total. Consider each error separately. Use the following form, in which error (1) is given as an example.

A general ledger should be arranged in the order in which accounts are presented in the financial statements, beginning with the balance sheet accounts.

Beethoven Company provided consulting services and billed the client $3,100. As a result of this event,

The normal balance of an expense is a credit.

If the sum of the debit column equals the sum of the credit column in a trial balance, it indicates

An accountant has debited an asset account for $1,200 and credited a liability account for $500. What can be done to complete the recording of the transaction?

A compound journal entry requires several debits to one account and several credits to one account.

The usual sequence of steps in the recording process is to analyze each transaction, enter the transaction in the

When two accounts are required in one journal entry, the entry is referred to as a

Deerhoof Company purchases equipment for $2,700 and supplies for $400 from Milkman Co. for $3,100 cash. The entry for this transaction will include a

On June 1, 2018 Ted Leo buys a copier machine for his business and finances this purchase with cash and a note. When journalizing this transaction, he will

The recording process occurs

An awareness of the normal balances of accounts would help you spot which of the following as an error in recording?

A chart of accounts usually starts with

The Dividends account

A debit to an asset account indicates

Which of the following journal entries is recorded correctly and in the standard format?

A chart of accounts for a business firm

At January 1, 2018, Alligator Industries reported retained earnings of $150,000. During 2018, Alligator had a net loss of $30,000 and paid dividends of $15,000. At December 31, 2018, the amount of retained earnings is

Sigur Ros Company is a newly organized business. The list of accounts to be opened in the general ledger is as follows: Instructions Organize the accounts into the order in which they should appear in the ledger of Sigur Ros Company and assign account numbers. Use the following system to assign account numbers.