Exam 3: Recording Transactions

The normal balance for any account is the side of the account where increases are recorded.

The entry to close revenue accounts involves

Given the following two T-accounts,what can definitely be said about this company's transactions? Cash Acc. Receivable (1) 17,700\mid700(2) (3) 1,400\mid1,900(4) (3) 400\mid700(5) \mid (4)1,900\mid \mid

What is the purpose of closing the books?

The entry to record the cost of merchandise inventory sold involves a

A book of original entry is a chronological record of an entity's transactions.

A debit increases the balance of assets and liabilities.

Given the following balances,what would the total credits in the trial balance equal? 1. Equipment \ 52,000 2. Accounts Payable 1,000 3. Sales 51,000 4. Accumulated Depreciation 3,000 5. Accounts Receivable 4,000 6. Retained Earnings 13,000 7. Salary Expense 4,000 8. Cash 12,000 9. Paid-in Capital 10,000 10. Cost of Goods Sold 25,000

Given the following account balances for Felay's Second Hand Shop on December 31,2012,prepare a trial balance. Accounts Payable \ 15,000 Sales 93,000 Merchandise Inventory 32,000 Accum. Depreciation, Equipment 3,000 Supplies 2,000 Paid-in Capital 32,000 Cost of Goods Sold 38,000 Retained Earnings 20,000 Wages Payable 8,000 Cash 26,000 Wage Expense 29,000 Rent Expense 17,000 Equipment 27,000

A compound journal entry

The purchase of a building with a down payment of cash and the signing of a note payable for the remainder would include a debit to both the Building account and the Notes Payable account,and a credit to the Cash account.

A credit decreases the balance of assets and expenses.

Full Scale Cleaning and More paid 8 months insurance in advance amounting to $3,200.A prepaid asset was established.At the end of the first month,the entry would include a

The right side of a T-account always increases an account balance and the left side of a T-account always decreases an account balance.

Which of the following accounts is increased with a debit?

Source documents are prepared

Debits are always journalized after credits.

Grogle Company had to calculate book value on its die cutting machine.The company paid $32,000 for the equipment on January 1,2012,but its current appraised value is $46,000.On December 31,2015,accumulated depreciation on the machine is $12,000.What is Grogle Company's book value on the die cutting machine at December 31,2015?

Following are accounts in alphabetical order,which are numbered for identification,followed by a series of transactions.For each transaction,determine what account(s)should be debited and credited,and place the number associated with that account in the appropriate debit or credit column. 1. Accounts Receivable 9. Notes Payable 2. Accounts Payable 10. Paid-in Capital 3. Accumulated Depreciation-equipment 11. Prepaid Rent 4. Cash 12. Rent Expense 5. Cost of Goods Sold 13. Sales 6. Depreciation Expense 14. Wage Expense 7. Equipment 15. Utility Expense 8.Merchandise Inventory Debit Credit a. Purchased equipment by offering a six month note. ------- ------- b. Received and paid the current utility bill.. ------- ------- c. Purchased merchandise inventory on account.. ------- ------- d. Recorded depreciation on the equipment.. ------- ------- e. Recognized expense of 1 month's rent (prepaid rent recorded on the books). ------- ------- f. Sold merchandise inventory on account, sale price above cost.. ------- ------- g. Collected cash from customers on account.. ------- ------- h. Sold merchandise inventory for cash, sale price above cost.. ------- ------- i. Sold shares of common stock for cash.. ------- ------- j. Paid 6 months rent in advance.. ------- ------- k. Wages were earned and paid to employees.. ------- -------

Chordley Manufacturing borrowed $12,000 from the Second National Bank of Tahoma on October 1,2012.The note carries an annual interest rate of 10%,which will be paid once a year on September 30.The company has not recognized any interest expense during 2012.What is the journal entry necessary to recognize interest expense as of December 31,2012?