Exam 2: Analyzing Transactions

The chart of accounts classifies the accounts to make identification of the accounts easier. Describe the numbering system businesses use in setting up the chart of accounts.

The chart of accounts for the Corning Company includes the following: Account Name Account Number Cash 11 Accounts Receivable 13 Prepaid Insurance 15 Accounts Payable 21 Unearned Revenue 24 Common Stock 31 Dividends 32 Fees Earned 41 Salaries Expense 54 Rent Expense 56 Page 3 of the journal contains the following entry: Prepaid Insurance 1,530 Cash 1,530 -What is the posting reference that will be found in the prepaid insurance account?

The normal balance of the dividends account is a debit.

The recording of cash payments from the cash account is done by entering the amount as a credit.

On January 8, stockholders transfer ownership of several pieces of office equipment to the new business, JumpStart, for common stock. When new, these items were worth $72,500. The fair market value of the equipment is $60,000. Journalize this transfer.

Dividends decrease stockholders' equity and are listed on the income statement as a deduction from revenue.

On January 1, Merry Walker and other stockholders established a catering service. Listed below are accounts to use for transactions a) through e), each identified by a number. Following this list are the transactions that occurred in Walker's first month of operation. You are to indicate for each transaction the accounts that should be debited and credited by placing the account numbers) in the appropriate box. 1. Cash 2. Accounts Receivable 3. Supplies 4. Prepaid Insurance 5. Equipment 6. Truck 7. Notes Payable 8. Accounts Payable 9. Common Stock 10. Dividends 11. Fees Earned 12. Wages Expense 13. Rent Expense 14. Utilities Expense 15. Truck Expense 16. Miscellaneous Expense 17. Insurance Expense

For each of the following accounts, indicate whether its normal balance is on the credit side or the debit side of the T account. -Interest Earned

The chart of accounts is designed to

Which of the following entries records the payment of an account payable?

Which of the following is true about T accounts?

Journal entries include both debit and credit accounts for each transaction.

Which of the following will increase stockholders' equity?

Journalizing always eliminates fraudulent activity.

Which of the following entries records the payment of a bill for your insurance premium?

Several types of errors can be made during the journalizing and posting process. Match the following with their best description. -Wrong amount posted to an account.

The chart of accounts for the Corning Company includes the following: Account Name Account Number Cash 11 Accounts Receivable 13 Prepaid Insurance 15 Accounts Payable 21 Unearned Revenue 24 Common Stock 31 Dividends 32 Fees Earned 41 Salaries Expense 54 Rent Expense 56 Page 3 of the journal contains the following entry: Prepaid Insurance 1,530 Cash 1,530 -The chart of accounts for the Miguel Company includes the following: Account Name Account Number Cash 11 Accounts Receivable 13 Prepaid Insurance 15 Accounts Payable 21 Unearned Revenue 24 Common Stock 31 Dividends 32 Fees Earned 41 Salaries Expense 54 Rent Expense 56 Page 3 of the journal contains the following transaction: Cash 640 Fees Earned 640 What posting references will be found in the journal entry?

The classification and normal balance of the accounts payable account is

The accounts in the ledger of Monroe Entertainment Co. are listed below. All accounts have normal balances. Accounts Payable \ 1,500 Fees Earned \ 3,600 Accounts Receivable 1,800 Insurance Expense 1,300 Prepaid Insurance 2,000 Land 3,000 Cash 3,200 Wages Expense 1,400 Dividends 1,200 Common Stock 8,800 Prepare a trial balance. The total of the debits is

The chart of accounts for the Corning Company includes the following: Account Name Account Number Cash 11 Accounts Receivable 13 Prepaid Insurance 15 Accounts Payable 21 Unearned Revenue 24 Common Stock 31 Dividends 32 Fees Earned 41 Salaries Expense 54 Rent Expense 56 Page 3 of the journal contains the following entry: Prepaid Insurance 1,530 Cash 1,530 -What posting references will be found in the journal entry?