Exam 2: The Recording Process

Electrelane Company showed the following balances at the end of its first year: Cash \ 4,000 Prepaid insurance 7,000 Accounts receivable 5,000 Accounts payable 4,000 Notes payable 6,000 Common stock 2,000 Dividends 1,000 Revenues 32,000 Expenses 25,000 What did Electrelene Company show as total credits on its trial balance?

A trial balance does not prove that all transactions have been recorded or that the ledger is correct.

Prepare journal entries for each of the following transactions. 1. Performed services for customers on account $8,000. 2. Purchased $20,000 of equipment on account. 3. Received $3,000 from customers in transaction 1. 4. The company paid dividends of $2,000.

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

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

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

On January 14, Edamame Industries purchased supplies of $700 on account. The entry to record the purchase will include

Which of the following are the same under both GAAP and IFRS?

Which of the following is false about a journal?

An account consists of

Transactions are entered in the ledger first and then they are analyzed in terms of their effect on the accounts.

An awareness of the normal balances of accounts would help you spot which of the following as an error in recording?

During February 2018 its first month of operations, the stockholders of Ariel Pink Enterprises invested cash of $50,000. Ariel had cash revenues of $10,000 and paid expenses of $14,000. Assuming no other transactions impacted the cash account, what is the balance in Cash at February 28?

The normal balance of any account is the

The left side of an account is

Radio Moscow Industries purchased supplies for $1,000. They paid $400 in cash and agreed to pay the balance in 30 days. The journal entry to record this transaction would include a debit to an asset account for $1,000, a credit to a liability account for $600. Which of the following would be the correct way to complete the recording of the transaction?

Transactions are recorded in alphabetic order in a journal.

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

An account consists of

In recording business transactions, evidence that an accounting transaction has taken place is obtained from