Exam 2: The Recording Process

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

A new account is opened for each transaction entered into by a business firm.

At December 1, 2010, Gibson Company's accounts receivable balance was $1,200. During December, Gibson had credit revenues of $5,000 and collected accounts receivable of $4,000. At December 31, 2010, the accounts receivable balance is

The trial balance of Drysdale Company shown below does not balance. An examination of the ledger and journal reveals the following errors: 1. Each of the above listed accounts has a normal balance per the general ledger. 2. Cash of $360 received from a customer on account was debited to Cash $630 and credited to Accounts Receivable $630. 3. A withdrawal of $300 by the owner was posted as a credit to Drysdale, Drawing, $300 and credit to Cash $300. 4. A debit of $300 was not posted to Wages Expense. 5. The purchase of equipment on account for $700 was recorded as a debit to Repair Expense and a credit to Accounts Payable for $700. 6. Services were performed on account for a customer, $510, for which Accounts Receivable was debited $510 and Service Revenue was credited $51. 7. A payment on account for $225 was credited to Cash for $225 and credited to Accounts Payable for $252. Instructions Prepare a correct trial balance.

When the volume of transactions is large, recording them in tabular form is more efficient than using journals and ledgers.

An accountant has debited an asset account for $1,000 and credited a liability account for $500. Which of the following would be an incorrect way to complete the recording of the transaction?

The number and types of accounts used by different business enterprises are the same if generally accepted accounting principles are being followed by the enterprises.

A trial balance may balance even when each of the following occurs except when

Identify the accounts to be debited and credited for each of the following transactions. 1. The owner, S. Wonder, invested $10,000 cash in the business. 2. Purchased supplies on account for $1,000. 3. Billed customers $2,000 for services performed. 4. Paid salaries of $900.

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 primary purpose of a trial balance is to prove the mathematical equality of the debits and credits after posting.

An _______________ is a record of increases and decreases in specific assets, liabilities, and owner's equity items.

A compound journal entry involves

The chart of accounts is a listing of the accounts and the account numbers which identify their location in the ledger.

A chart of accounts for a business firm

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

The transactions of the Buy It Now Store are recorded in the general journal below. You are to post the journal entries to T-accounts.

M Caria and Associates is a financial planning service. The account balances at December 31, 2010 are shown by the following alphabetical list: Instructions Prepare a trial balance with the accounts arranged in financial statement order.

Match the basic step in the recording process described by each of the following statements. A. Analyze each transaction B. Enter each transaction in a journal C. Transfer journal information to ledger accounts ____ 1. This step is called posting. ____ 2. Business documents are examined to determine the effects of transactions on the accounts. ____ 3. This step is called journalizing. Solution 175

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