Exam 2: The Recording Process

The following trial balance was obtained from Clover Ltd's computer system. Required: 1. What features make this trial balance difficult to read? 2. Prepare an improved trial balance.

Selected transactions for Kookaburra Ltd are listed below. List the number of the transaction and then describe the effect of each transaction on assets, liabilities and equity. Sample: Made initial cash investment in the business. The answer would be - Increase in assets and increase in Equity. -Paid monthly rent.

For each item below, indicate whether a debit or credit applies: -Increase in Revenue received in advance (Unearned revenue)

The Dividends paid account:

The accounts in the trial balance of Koala Ltd are shown below. Select whether the account balance is normally a debit (Dr) or a credit (Cr). -Repair expense

For each of the following accounts indicate: (a) the type of account (asset, liability, equity, revenue, expense) (b) the debit and credit effects (c) the normal account balance. -Equipment

For each item , indicate whether a debit or credit applies: -Decrease in Prepaid rent

Selected transactions for Kookaburra Ltd are listed below. List the number of the transaction and then describe the effect of each transaction on assets, liabilities and equity. Sample: Made initial cash investment in the business. The answer would be - Increase in assets and increase in Equity. -Paid cash for repair work on security system.

During an accounting period, a business has numerous transactions affecting each of the following accounts. Select for each account what it is likely to have: -Accounts receivable

Shareholders paying cash to purchase shares in a company increases:

For each item , indicate whether a debit or credit applies: -Increase in Wage expense

Transactions for Wombat Ltd for the month of October are presented below. Journalise each transaction and identify each transaction by number. You may omit journal explanations. 1. Shareholders invested an additional $36,000 cash in the business. 2. Purchased land costing $28,000 for cash. 3. Purchased equipment costing $8,000 for $4,000 cash and the remainder on credit. 4. Purchased supplies on account for $800. 5. Paid $1,000 for a one-year insurance policy. 6. Received $2,000 cash for services performed. 7. Received $4,000 for services previously performed on account. 8. Paid wages to employees for $2,500. 9. Paid dividends to shareholders of $400.

Selected accounts from the ledger of Platypus Ltd appear below. For each account, indicate the following: In the first column at the right, indicate the nature of each account, using the following abbreviations: (b) In the second column, indicate the normal balance by inserting Dr. or Cr.

The accounts in the trial balance of Koala Ltd are shown below. Select whether the account balance is normally a debit (Dr) or a credit (Cr). -Share capital

For each item below, indicate whether a debit or credit applies: -Decrease in Interest payable

When a business receives an unpaid electricity account, it should:

For each item below, indicate whether a debit or credit applies: -Decrease in Loan payable

For each item , indicate whether a debit or credit applies: -Decrease in Accounts receivable

Match the items by choosing the appropriate code letter : -An accounting record of increases and decreases in individual specific assets, liabilities and equity items.

Match the items by choosing the appropriate code letter : -Evidence that a transaction has taken place.