Exam 2: The Recording Process

Which of the following accounts does not have a normal credit balance?

After a transaction has been posted, the reference column in the journal should not be blank.

In recording an accounting transaction in a double-entry system

Which of the following errors will prevent the trial balance from balance?

The trial balance of Drysdale Company shown below does not balance. An examination of the ledger and journal reveals the following errors: 1. Each of the above listed accounts has a normal balance per the general ledger. 2. Cash of ₤170 received from a customer on account was debited to Cash ₤710 and credited to Accounts Receivable ₤710. 3. A dividend of ₤300 was posted as a credit to Dividends, ₤300 and credit to Cash ₤300. 4. A debit of ₤120 was not posted to Salaries and Wages Expense. 5. The purchase of equipment on account for ₤700 was recorded as a debit to Maintenance and Repairs Expense and a credit to Accounts Payable for ₤700. 6. Services were performed on account for a customer, ₤310, for which Accounts Receivable was debited ₤310 and Service Revenue was credited ₤31. 7. A payment on account for ₤225 was credited to Cash for ₤225 and credited to Accounts Payable for ₤252. Instructions Prepare a correct trial balance.

John Dough, a fellow employee, wants to understand the basic steps in the recording process. Identify and briefly explain the steps in the order in which they occur.

After journal entries are posted, the reference column

When debits do not equal credits on the trial balance, this indicates that the company has net income that needs to be transferred to the retained earnings account.

Wiser Inc. paid cash dividends of $300. The entry for this transaction will include a debit of $300 to

Sternberg Company purchases equipment for $1,200 and supplies for $400 from Tran Co. for $1,600 cash. The entry for this transaction will include a

J. B. Goode has the following transactions during April of the current year. Indicate (a) the effect on the accounting equation and (b) the debit-credit analysis. Apr. 1 Opens a law office, investing $20,000 in cash. 4 Pays rent in advance for 6 months, $10,800 cash. 16 Receives $8,000 from clients for services provided. 27 Pays secretary $3,000 salary.

The trial balance will not balance when incorrect account titles are used in journalizing or posting.

On August 13, 2014, Merrill Enterprises purchased equipment for $1,500 and supplies of $300 on account. Which of the following journal entries is recorded correctly and in the standard format?

The general ledger contains all the accounts that are reported on the statement of financial position, whereas the general journal contains all the accounts that are reported on the income statement.

The best interpretation of the word credit is the

The first step in designing a computerized accounting system is the creation of the

A classmate who is a computer science major thinks that accountants are obsolete. She states that computers can do the entire process without any human assistance. Discuss the steps in the recording process and indicate what role the computer plays in that process.

Use the information in BE 182 to answer the following questions. 1. What is the balance in Accounts Payable at June 30, 2014? 2. What is the balance in Accounts Receivable at June 30, 2014?

For each transaction given, enter in the tabulation given below a "D" for debit and a "C" for credit to reflect the increases and decreases of the assets, liabilities, and equity accounts. In some cases there may be a "D" and a "C" in the same box. Transactions: 1. Shareholders invest cash in the business in exchange for ordinary shares. 2. Pays insurance in advance for six months. 3. Pays secretary's salary. 4. Purchases supplies on account. 5. Pays electricity bill. 6. Borrows money from local bank. 7. Makes payment on account. 8. Receives cash due from customers. 9. Provides services on account. 10. The company pays dividends.

Robitaille Company received a cash advance of $500 from a customer. As a result of this event,