Exam 3: Processing Accounting Information

Use the following five transactions for Morton & Associates, Inc. to answer the questions. May 1 Bills are sent to clients for services provided in April in the amount of $800. 9 Techno, Inc. delivers office furniture $1,060 and office supplies $160 to Morton leaving an invoice for $1,220. 15 Payment is made to Techno, Inc. for the furniture and office supplies delivered on May 9. 23 A bill for $430 for electricity for the month of April is received and will be paid on its due date in June. 31 Salaries of $850 are paid to employees. -See the transactions to Morton & Associates. The journal entry to record the May 1 transaction will include an increase of $800 to

Unfortunately, the bookkeeper notices that two transactions for Patio Publications were not reflected in the balances of the trial balance: one to record $800 of accrued wages and salaries to be paid in the next period, and the other was the use of $560 of office supplies from the supplies on hand. If the Trial Balance column totals are $15,380 prior to discovering these mistakes, what are the totals of the Trial Balance columns after the corrections are made?

Squidly Products sold and delivered modems to DetailSolutions in three equal installments over the next three months. The journal entry made by Squidly to record this transaction will include:

A bill is received for electric service; the charge for the electricity is recorded, but payment will be made later. For this transaction, identify the effect on the accounting equation.

There is a universal chart of accounts that is applicable to all businesses.

Which of the following will not cause a trial balance to be out of balance?

From an accounting perspective, explain how an external event differs from an internal event and give an example of each.

Karen's Flower Shop began business as a corporation in 2015. Several transactions which occurred early in 2015 ar below. Record each transaction in proper form, excluding written explanations, in the general journal provided. A January 23, 2015: Stockholders invested cash of $70,000 in the business and received 7,000 shares common stock as evidence of their ownership interest. B February 1, 2015: Rent of $1,600 was paid for the month of February. C February 7, 2015: Equipment with a cost of $3,000 was purchased on credit; payment is due within 30 days. D February 14, 2015: Bills totaling $5,400 were presented to customers for flower arrangements created and delivered; $2,900 was received in cash immediately; the balance of $2,500 is due within 10 days. E February 18, 2015: Full payment was made for the equipment purchased on February 7. F February 22, 2015: Payment of $1,900 was received from customers with balances due from February 14. G February 28, 2015: Employee salaries of $3,300 were paid. General Journal

A cancelled check would be a source document for which of the following?

For each of the following accounts, indicate whether it is a balance sheet account or an income statement account. -Accounts Payable

Each account has a normal balance. For the following list of accounts, indicate whether the normal balance of each is a debit or a credit. -Investments

For each of the following accounts, indicate whether it is a balance sheet account or an income statement account. -Interest Revenue

The general journal is often used to record repetitive transactions.

A file or book which contains a record for all accounts used by a company, including the account balance, is called a:

During the month, services performed for customers on account amounted to $4,500 and collections from customers in payment of their accounts totaled $3,000. At the end of the month, the Accounts Receivable account had a balance of $3,500. What was the Accounts Receivable balance at the beginning of the month? Show your work using a T account.

Services are provided for customers who pay for the services immediately. For this transaction, identify the effect on the accounting equation.

For each of the following accounts, indicate whether it is a balance sheet account or an income statement account. -Retained Earnings

Each account has a normal balance. For the following list of accounts, indicate whether the normal balance of each is a debit or a credit. -Retained Earnings

Which of the following would be a case where an event as a transaction is not supported by a source document?

Choose from the following list of account titles the one that most accurately fits the description of that account or is an example of that account. An account title may be used more than once or not at all. -Rent paid on an office building in advance of use of the facility