Exam 2: The Recording Process

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: -Share capital

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). -Dividends

Match the items by choosing the appropriate code letter : -A list of all the accounts used by a business.

Under a double-entry accounting system, show how the entry for each transaction listed is entered in the ledger by choosing debit or credit to indicate the increase or decrease in the effected account. -A decrease in Office supplies.

A credit to which account will increase equity?

Under a double-entry accounting system, show how the entry for each transaction listed is entered in the ledger by choosing debit or credit to indicate the increase or decrease in the effected account. -A decrease in Accounts receivable.

The trial balance of Wallaby Ltd shown below does not balance. 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 $350 received from a customer on account was debited to Cash $530 and credited to Accounts receivable $530. 3. Dividends of $300 paid to shareholders were posted as a credit to Dividends, $300 and a credit to Cash $300. 4. Wages expense of $300 was omitted from the trial balance. 5. The purchase of equipment on account for $700 was recorded as a debit to Repair 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 $215 was credited to Cash for $215 and credited to Accounts payable for $251. Instructions: Prepare a correct trial balance.

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). -Service revenue

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: -Loan payable

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: -Salaries expense

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). -Bank loan payable

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. -Dividends paid to owners.

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: -Cash

The cash payment of a liability:

Analyse the following transactions in terms of their effect on the basic accounting equation. Record each transaction by increasing (+) or decreasing (-) the dollar amount of each item affected. Indicate the new balance of each item after a transaction is recorded. 1. Issued shares to investors for $12,000 in cash. 2. Purchased supplies on credit for $700. 3. Invoiced customers $400 for services provided. 4. Paid for supplies purchased in transaction 2. 5. Paid dividends of $300 cash to shareholders. 6. Received half of amount owing by customers invoiced in transaction 3. 7. Received and paid electricity bill for $50.

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 electricity bill.

For each item below, indicate whether a debit or credit applies: -Increase in Prepaid insurance

For each item below, indicate whether a debit or credit applies: -Increase in Equity

Under a double-entry accounting system, show how the entry for each transaction listed is entered in the ledger by choosing debit or credit to indicate the increase or decrease in the effected account. -An increase in Prepaid insurance.

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: -Insurance expense