Exam 2: The Recording Process

A two column list of all accounts and their balances at a given time is a ______________. Answers to

Which of the following is true?

The usual sequence of steps in the transaction recording process is: a. journal $\rightarrow$ analyze $\rightarrow$ ledger b. analyze $\rightarrow$ journal $\rightarrow$ ledger. c. journal $\rightarrow$ ledger $\rightarrow$ analyze. d. ledger $\rightarrow$ journal $\rightarrow$ analyze.

In recording an accounting transaction in a double-entry system

Evidence that would not help with determining the effects of a transaction on the accounts would be a(n)

The entire group of accounts and their balances maintained by a company is called the ________________.

A debit is not the normal balance for which account listed below?

Which of the following is the correct sequence of steps in the recording process?

Some of the following errors would cause the debit and credit columns of the trial balance to have unequal totals. For each of the four cases state whether the error would cause unequal totals in the trial balance. If the error causes unequal totals indicate the amount of difference between the columns and state whether the debit or credit is larger. Each case is to be considered independently of the others. 1. A payment of $600 to a creditor was recorded by a debit to Accounts Payable of $60 and a credit to Cash of $600. 2. A $450 payment for a printer was recorded by a debit to Equipment of $45 and a credit to Cash for $45. 3. An account receivable in the amount of $3000 was collected in full. The collection was recorded by a debit to Cash for $3000 and a debit to Accounts Payable for $3000. 4. An account payable was paid by issuing a check for $600. The payment was recorded by debiting Accounts Payable $600 and crediting Accounts Receivable $600.

Identify the accounts to be debited and credited for each of the following transactions. 1. The owner O. Gulag invested $8000 cash in the business. 2. Purchased supplies on account for $1000. 3. Billed customers $2000 for services performed. 4. Paid salaries of $1200.

Posting is the process of proving the equality of debits and credits in the trial balance.

The normal balance of an expense is a credit.

Bertoli Company showed the following balances at the end of its first year: Cash \ 4,000 Prepaid insurance 7,000 Accounts receivable 8,000 Accounts payable 4,000 Notes payable 7,000 Owner's Capital 3,000 Owner's Drawings 2,000 Revenues 32,000 Expenses 25,000 What did Bertoli Company show as total credits on its trial balance?

A three column form of account is so named because it has columns for

When three or more accounts are required in one journal entry the entry is referred to as a

For each of the following accounts indicate the effect of a debit or a credit on the account and the normal balance. Increase (+) Decrease (-). 1. Salaries and wages expense. 2. Accounts receivable. 3. Service revenue. 4. Owner's Capital. 5. Owner's Drawings.

Credits

Describe the process of preparing a trial balance. What is the purpose of preparing a trial balance? If a trial balance does not balance identify what might be the reasons why it does not balance. If the trial balance does balance does that insure that the ledger accounts are correct? Explain.

A trial balance will not balance if

Terry Bradshaw was appointed the manager of Steelers Properties a recently formed company that manages residential rental properties. Linda Cohen 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. Bradshaw believes that it is important to maintain a presence in the social life of the city. In this he sharply differs from his father John Bradshaw. The elder Mr. Bradshaw has set up Steelers Properties in order to test his son's management skills before allowing him to manage the more lucrative commercial property business. John Bradshaw provided the capital for Steelers and maintains close contact with the company. He allowed his son however to hire his own employees. Terry has asked Ms. Cohen 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. Cohen 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. Cohen agree to the change in the Travel and Entertainment account to Property Development? Explain.