Exam 2: The Recording Process

Journalize the following business transactions in general journal form. Identify each transaction by number. You may omit explanations of the transactions. 1. The company issues ordinary shares in exchange for ₤25,000 cash. 2. Purchased ₤400 of supplies on credit. 3. Purchased equipment for ₤10,000, paying ₤3,000 in cash and signed a 30-day, ₤7,000, note payable. 4. Real estate commissions billed to clients amount to ₤4,000. 5. Paid ₤700 in cash for the current month's rent. 6. Paid ₤200 cash on account for supplies purchased in transaction 2. 7. Received a bill for ₤600 for advertising for the current month. 8. Paid ₤2,200 cash for salaries. 9. The company paid dividends of ₤1,200. 10. Received a check for ₤3,000 from a client in payment on account for commissions billed in transaction 4.

Basic steps in the recording process include all of the following except

A list of accounts and their balances at a given time is called a(n)

Which of the following rules is incorrect?

Which of the following statement is true regarding the recording process?

The procedure of transferring journal entries to the ledger accounts is called

The explanation column of the general ledger

The steps in preparing a trial balance include all of the following except

The ledger is merely a bookkeeping device and therefore does not provide much useful data for management.

A debit is not the normal balance for which of the following?

Under U.S. GAAP

The entire group of accounts maintained by a company is called the

A credit to a liability account

A trial balance is a listing of

Revenues are

The first step in the recording process is to

The complete effect of a transaction on the accounts is disclosed in the journal.

Revenues are a subdivision of retained earnings.

A credit balance in a liability account indicates that an error in recording has occurred.

The chart of accounts is a