Exam 13: Appendix A: The Language of Accountants: Debits and Credits

When Honest Abe received his paycheck, he realized that his employer made an error in computing his wages and overpaid him by $1,300. So he promptly returned the excess amount. When the employer receives a check from Abe for the amount of the overpayment, which of the following journal entries will be made by the employer?

The following accounts, in alphabetical order, are from the general ledger of Brown's Counseling Service, Inc. at January 31, 2019. The firm's accounting year began on January 1. All accounts have normal balances. Prepare a trial balance at January 31, 2019, from the given data.

The normal balance in a revenue account is a credit balance.

Graham Corporation has the following normal account balances in its general ledger at the end of a period: Which of the following gives the correct entry required to close only the accounts above?

Which of the following statements is incorrect?

A complete accounting cycle occurs once every:

All accounts in the general ledger are closed at a company's fiscal year end in order to facilitate preparation of the financial statements and to ready the accounts for the activities of the next year.

In preparing its adjusting entries at the end of this year, Johns Company neglected to adjust the Prepaid Insurance account for the amount of insurance expired during the year. This error:

Which of the following errors, each considered individually, would cause the trial balance totals to be unequal?

Which of the following shows all the general ledger account balances in one place?

Early in the accounting period, a customer paid $1,500 for services in advance of receiving them; Cash was debited and Unearned Service Fees was credited for $1,500. At the end of the accounting period, two-thirds of the services paid for had yet to be performed. The proper adjusting entry is:

Maxwell Industries recorded and paid $700 advertising for the current month. Which occurred?

During January, Wells Corporation purchased $100,000 of inventory; they paid one-fourth in cash and signed a note for the remaining balance. This transaction will be recorded as:

Sparkling Water offers pool and spa cleaning services to hotels and residential customers. Commercial (hotels) customers pay on a monthly contract basis, while residential customers pay an hourly rate based on services provided. In July, Sparkling Water signed a 6-month contract with Hilton Holidays to provide pool and spa cleaning services for 3 hotel sites. The contract price of $24,000 was collected on July 1. The services will be provided evenly over the 6 months. During July, Sparkling Water also provided 80 hours of residential pool services at $15 per hour. These services have not yet been billed to residential customers. The company uses the account, Fees Receivable, to reflect amounts due but not yet billed. Required a. Prepare the entry on July 1 to record the receipt of $24,000 cash related to the contract with Hilton Holidays. b. Prepare the adjusting entry to be made on July 31 for the contract work performed for Hilton Holidays during the month. c. Prepare the adjusting entry needed on July 31 to reflect the residential pool services performed during the month.

The following T-accounts contain numbered entries for the July transactions of RL, Inc., who opened on July 1 of this year. Give a reasonable description of each of the nine numbered transactions entered in the above accounts. Example: (1) Shareholders invested $30,000 cash in the business.

Recording the collection of accounts receivable from customers involves:

A trial balance can be described as:

An unadjusted trial balance shows the general ledger account balances before any adjustments have been made.

Selected general ledger accounts of B&T Company, Inc., are listed below with the identifying account numbers: For each of the following transactions or adjustments, indicate the proper accounts to be debited and credited by placing the appropriate account number in the space provided.

Match each of the numbered transactions of a corporation with Effect of Transaction indicating the debits and credits to be made (give the debit first) -Paid cash dividends.