Exam 2: The Recording Process

At June 1, 2014, Estrada Industries had an accounts receivable balance of ₤12,000. During the month, the company performed credit services of ₤30,000 and collected accounts receivable of ₤32,000. What is the balance in accounts receivable at June 30, 2014?

Transactions in a journal are initially recorded in

An accounting convention is best described as

The Dividends account

The double-entry system is a logical method for recording transactions and results in equal debits and credits for each transaction.

Jim Coleman, Jr. was appointed the manager of Maris Properties, a recently formed company that manages residential rental properties. Linda Grider is the accountant. She prepared a chart of accounts based on an analysis of the expenditures of the company. One of the largest expense categories is Travel and Entertainment. Mr. Coleman believes that it is important to maintain a presence in the social life of the city. In this, he sharply differs from his father, Jim Coleman, Sr. The elder Mr. Coleman has set up Maris Properties in order to test his son's management skills before allowing him to manage the more lucrative commercial property business. Mr. Coleman, Sr. provided the capital for Maris, and maintains close contact with the company. He allowed his son, however, to hire his own employees. Mr. Coleman has asked Ms. Grider to change the name of the Travel and Entertainment account to Property Development. He hopes to deflect his father's attention away from the amount he has spent on travel and entertainment until he has proven that his methods work. When Ms. Grider resisted, he reminded her that he, not his father, hired her. He also reminded her that she had been enthusiastic about his business plans when she was hired. Required: 1. Who are the stakeholders in this situation? 2. Should Ms. Grider agree to the change in the Travel and Entertainment account to Property Development? Explain.

The journal provides a chronological record of transactions.

Customarily, a trial balance is prepared

When a company pays dividends

A journal is also known as a book of original entry.

The double-entry system requires that each transaction must be recorded

Which of the following is not true of the terms debit and credit?

An accounting record of the balances of all assets, liabilities, and equity accounts is called

An account consists of

The usual sequence of steps in the transaction recording process is:

The chart of accounts used by Ming Copy Company is listed below. You are to indicate the proper accounts to be debited and credited for the following transactions by writing the account number(s) in the appropriate boxes. CHART OF ACCOUNTS ------------------------------------------- -------------------------------------------

For each of the following transactions of Chen Inc., identify the account to be debited and the account to be credited. 1. Purchased 18-month insurance policy for cash. 2. Paid weekly payroll. 3. Purchased supplies on account. 4. Received utility bill to be paid at later date.

If a revenue account is credited, the revenue account is increased.

Omega Company pays its employees twice a month, on the 7^th and the 21^st. On June 21, Omega Company paid employee salaries of $4,000. This transaction would

The trial balance