Exam 3: Recording Transactions

On October 1,2012,Water Works paid $3,600 for 6 months' rent in advance.The appropriate journal entry was made at the time using Prepaid Rent.No other journal entry has been made.As of December 31,2012,Water Works should

A trial balance is similar to a balance sheet in that it only includes balance sheet accounts.

Formation,Inc.had the following balances as of December 31,2012.Prepare closing entries based on these balances. Equipment \ 26,00 Retained Earnings 7,000 Accumulated Depreciation \ 4,500 Paid-in Capital 21,400 Cost of Goods Sold 59,000 Supplies 4,300 Wages Payable 1,200 Sales 112,00 Cash 34,000 Accounts Payable 7,200 Wage Expense 36,000 Rent Expense 8,000 Merchandise Inventory 12,700 Dividends (Amount Declared) 3,000

Indicate whether each of the following accounts normally possesses a debit (DR)or a credit (CR)balance. 1. Wage expense 9. Merchandise Inventory 2. Prepaid rent 10. Salary expense 3. Cost of goods sold 11. Equipment 4. Cash 12. Accounts receivable 5. Sales 13. Accumulated depreciation 6. Paid-in-capital 14. Notes payable 7. Depreciation expense 15. Utilities expense 8.Accounts payable

Morrill Law Offices had the following transactions in November,2012.Prepare closing entries followed by an income statement for Morrill Law Offices for the month ending November 30,2012. 1.Morrill Law Offices sold $210,000 worth of services.Two-thirds was collected in November with the remainder collected in December. 2.The company paid wages of $53,000 to its employees. 3.The company paid utilities of $750 to Brenton Electric Company. 4.The company's prepaid rent account expired in the month of November.Morrill Law Offices purchased an additional 3 months of rent on October 1,2012 for $3,600.The landlord did not increase rent for Morrill Law Offices. 5.A declaration of dividends for $3,200 occurred on November 1,2012.

Which of the following transactions would not affect owners' equity?

Failure to record the expiration of a prepaid asset account will

Materials Handling Company sold merchandise inventory costing $7,000 for $12,000 in cash.How should Materials Handling Company record this transaction?

Application Technologies has acquired equipment costing $15,000.The company paid $5,000 and gave a 10-month note for the balance.The bookkeeper should

ERP is a means of organizing computer accounting information.

A T-account is an analysis of an account.

T-accounts facilitate the preparation of financial statements at any instant if the account balances are kept up-to-date.

If an expense is understated in the current period,then

If a company would like to repay a bank loan of $7,000,the bookkeeper would

On July 1,2012,Norton Company paid $2,400 for rent on the building it occupies.This rent payment is for the 3-month period of July 1 to September 30,2012.Which of the following is the journal entry to be made on July 1,2012?

Which of the following is not an example of a source document?

Prepare the necessary journal entries for each of the following transactions for Klokel,Inc. a.Klokel,Inc.sold 1,200 shares of common stock at $30 per share in cash. b.The company purchased equipment for $14,000,paying $4,000 in cash and the remainder in a note. c.The company paid the current month's rent,which amounted to $900,and the current month's utilities,which amounted to $400. d.Merchandise inventory costing $1,900 was sold on account for $4,100. e.Depreciation on the equipment amounted to $600.

The only accounts that are closed are income statement accounts.

The trial balance is an internal report that helps accountants prepare the financial statements.

Since revenues and expenses are associated with stockholders' equity,revenues and expenses must have normal balances on the same side of a T-account.