Exam 2: The Recording Process

The chart of accounts is a special ledger used in accounting systems.

On August 13, 2018, Swell Maps Enterprises purchased equipment for $1,300 and supplies of $200 on account. Which of the following journal entries is recorded correctly and in the standard format? a. Equipment 1,300 Account Payable 1,500 Supplies 200 b. Equipment 1,300 Supplies 200 Account Payable 1,500 c. Account Payable 1,500 Equipment 1,300 Supplies 200 d. Equipment 1,300 Supplies 200 Account Payable 1,500

An accountant has debited an asset account for $1,300 and credited a liability account for $500. Which of the following would be an incorrect way to complete the recording of the transaction?

A debit to an asset account indicates

The trial balance of Red House Painters shown below does not balance. RED HOUSE PAINTERS Trial Balance June 30, 2018 Cash \ 2,780 Accounts Receivable 7,420 Supplies 600 Equipment. 8,300 Accounts Payable Common Stock \ 9.777 1.952 Dividends 1,300 Service Revenue 15,200 Salaries and Wages Expense 3,800 Maintenance and Repairs Exper Totals 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 $270 received from a customer on account was debited to Cash $720 and credited to Accounts Receivable $720. 3. A dividend of $400 was posted as a credit to Dividends $400 and credit to Cash $400. 4. A debit of $300 was not posted to Salaries and Wages Expense. 5. The purchase of equipment on account for $700 was recorded as a debit to Maintenance and Repairs 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 $235 was credited to Cash for $235 and credited to Accounts Payable for $253. Instructions Prepare a correct trial balance.

The double-entry system is a logical method for recording transactions and results in equal debits and credits for each transaction.

Under the double-entry system, revenues must always equal expenses.

A numbering system for a chart of accounts

Post the following transactions to T-accounts and determine each account's ending balance. 1. Supplies. 2,800 Accounts Payable 2,800 2. Accounts Receivable 4,000 Service Revenue 4,000 3. Cash 3,000 Accounts Receivable 3,000 4. Accounts Payable 1,000 Cash 1,000

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

Which of the following correctly identifies normal balances of accounts? a. Assets Debit Liabilities Credit Stockholders' Equity Credit Revenues Debit Expenses Credit b. Assets Debit Liabilities Credit Stockholders' Equity Credit Revenues Credit Expenses Credit c. Assets Credit Liabilities Debit Stockholders' Equity Debit Revenues Credit Expenses Debit d. Assets Debit Liabilities Credit Stockholders' Equity Credit Revenues Credit Expenses Debit

Delta72 Company received a cash advance of $700 from a customer. As a result of this event,

The normal balance of an expense is a credit.

A trial balance is a listing of

A compound journal entry involves

A debit is not the normal balance for which of the following?

In the first month of operations for Gallowsbird Industries, the total of the debit entries to the cash account amounted to $36,000 ($16,000 investment by stockholders and revenues of $20,000). The total of the credit entries to the cash account amounted to $22,000 (purchase of equipment $8,000 and payment of expenses $14,000). At the end of the month, the cash account has a(n)

TransAm Mail Service purchased equipment for $2,500. TransAm paid $400 in cash and signed a note for the balance. TransAm debited the Equipment account, credited Cash and

The bookkeeper for Panda Bear Yard Service made a number of errors in journalizing and posting as described below: 1. A debit posting to accounts receivable for $500 was omitted. 2. A payment of accounts payable for $600 was credited to cash and debited to accounts receivable. 3. A credit to accounts receivable for $950 was posted as $95. 4. A cash purchase of equipment for $893 was journalized as a debit to equipment and a credit to notes payable. The credit posting was made for $839 while the debit posting was made for $893. 5. A debit posting of $400 for purchase of supplies was credited to supplies. 6. A debit to maintenance and repairs expense for $451 was posted as $415. 7. A debit posting for salaries and wages expense for $900 was made twice. 8. A cash purchase of supplies for $700 was journalized and posted as a debit to supplies for $70 and a credit to cash for $70. Instructions For each error, indicate (a) whether the trial balance will balance; if the trial balance will not balance, indicate (b) the amount of the difference, and (c) the trial balance column that will have the larger total. Consider each error separately. Use the following form, in which error (1) is given as an example. () () () 1 No \5 00 Credit

Beethoven Company provided consulting services and billed the client $3,100. As a result of this event,