Exam 2: Accounting for Business Transactions

HH Consulting & Design provided $800 of consulting work and $100 of design work to the same client. It billed the client for the total amount and is expecting to collect from the customer next month. Which of the following general journal entries will HH Consulting & Design make to record this transaction?

Identify the account used by businesses to record the transfer of assets from a business to its owner for personal use:

Neither U.S. GAAP nor IFRS require the use of accrual basis accounting.

A journal entry that affects no more than two accounts is called a compound entry.

Identify the statement that is incorrect.

The record of all accounts and their balances used by a business is called a:

List the steps in processing transactions.

Funky Music purchased $25,000 of equipment for cash. The Equipment asset account is _______________ for $25,000 and the cash account is _______________ for $25,000. Answers need to appear in the order as shown above

A company's ledger is:

Golddigger Services, Inc. provides services to clients. On May 1, a client prepaid Golddigger Services $60,000 for 6-months services in advance. Golddigger Services' general journal entry to record this transaction will include a:

Preparation of a trial balance is the first step in processing a financial transaction.

J. Brown Consulting paid $500 cash for utilities for the current month. Given the choices below, determine the general journal entry that J. Brown Consulting will make to record this transaction.

Trimble Graphic Design receives $1,500 from a client billed in a previous month for services provided. Which of the following general journal entries will Trimble Graphic Design make to record this transaction?

An account's balance is the difference between the total debits and total credits for the account, including any beginning balance.

Explain the debt ratio and its use in analyzing a company's financial condition.

A balanced trial balance is proof that no errors were made in journalizing transactions, posting to the ledger, and preparing the trial balance.

The balance sheet reports the financial position of a company at a point in time.

A transaction that credits an asset account and credits a liability account must also affect one or more other accounts.

_________________ documents identify and describe transactions and events and provide objective evidence and amounts for recording.

Given each of the following errors, indicate on the table below the amount by which the trial balance will be out of balance and which trial balance column (debit or credit) will have the larger total as a result of the error. a. $100 debit to Cash was debited to the Cash account twice. b. $1,900 credit to Sales was posted as a $190 credit. c. $5,000 debit to Office Equipment was debited to Office Supplies. d. $625 debit to Prepaid Insurance was posted as a $62.50 debit. e. $520 credit to Accounts Payable was not posted. Error Amount Out of Balance Column Having Larger Total a. b. c. d. e.