Exam 2: Analyzing and Recording Transactions

HH Consulting & Design provided $800 of consulting work and $100 of design work to the same client. It billed the client for the total amount and is expecting to collect from the customer next month. Which of the following general journal entries will HH Consulting & Design make to record this transaction? A) Cash 900 Consulting Revenue 800 Design Revenue 100 B) Consulting Revenue 800 Design Revenue 100 Cash 900 C) Accounts Payable 800 Design Revenue 100 Consulting Revenue 800 D) Accounts Receivable 900 Consulting Revenue 800 Design Revenue 100 E) Design Revenue 100 Consulting Revenue 800 Accounts Receivable 900

An income statement reports the revenues earned less the expenses incurred by a business over a period of time.

Jay's Limo Services paid $300 cash to employees for work performed in the current period. Which of the following general journal entries will Jay's Limo Services make to record this transaction? A) Salaries Expense 300 Accounts Payable 300 B) Salaries Expense 300 Cash 300 C) Salaries Expense 300 J. Smith, Withdrawals 300 D) Cash 300 Salaries Expense 300 E) Salaries Payable 300 Salaries Expense 300

During the month of March, Harley's Computer Services made purchases on account totaling $43,500. Also during the month of March, Harley was paid $8,000 by a customer for services to be provided in the future and paid $36,900 of cash on its accounts payable balance. If the balance in the accounts payable account at the beginning of March was $77,300, what is the balance in accounts payable at the end of March?

The following accounts appear on either the Income Statement (IS)or Balance Sheet (BS). In the space to the left of each account, write the letters, IS or BS to identify the statement on which the account appears. _____ 1. Office Equipment _____ 2. Rent Expense 3. Unearned Fees Revenues _____ 4. Rent Expense _____ 5. Accounts Payable _____ 6. Owner, Capital 7. Fees Revenue 8. Cash _____ 9. Notes Receivable _____ 10. Wages Payable

The ordering of accounts in a trial balance typically follows their identification number from the chart of accounts, that is, assets first, then liabilities, then owner's capital and withdrawals, followed by revenues and expenses.

Items such as sales tickets, bank statements, checks, and purchase orders are examples of a business's source documents.

Identify by marking an X in the appropriate column, whether each of the following items would likely serve as a source document. The first one is done as an example. Yes No Ex. Credit eard a. Credit eard receipt b. Purchase order c. Invoice d. Balance sheet e. Bark statement f. Jounnal entry g. Telephone bill h. Employee earnings record

Willow Rentals purchased office supplies on credit. The general journal entry made by Willow Rentals will include a:

A company that finances a relatively large portion of its assets with liabilities is said to have a high degree of financial leverage.

A debit entry is always an increase in the account.

At the end of the current year, Leer Company reported total liabilities of $300,000 and total equity of $100,000. The company's debt ratio on the last year-end was:

Withdrawals by the owner are a business expense.

Debits increase asset and expense accounts.

On April 30, Victor Services had an Accounts Receivable balance of $18,000. During the month of May, total credits to Accounts Receivable were $52,000 from customer payments. The May 31 Accounts Receivable balance was $13,000. What was the amount of credit sales during May?

Crediting an expense account decreases it.

A law firm collected $1,800 for work to be performed in the following month. Which of the following general journal entries will the firm make to record this transaction?

The heading on every financial statement lists the three W's-Who (the name of the business); What (the name of the statement); and Where (the organization's address).

An account's balance is the difference between the total debits and total credits for the account, including any beginning balance.

Revenues always increase equity.