Exam 2: Analyzing Transactions

Which of the following entries records the purchase of common stock by stockholders?

Listed below are accounts to use for transactions a through d, each identified by a number. Following this list are the transactions. You are to indicate for each transaction the accounts that should be debited and credited by placing the account numbers in the appropriate box. 1. Cash 2. Accounts Receivable 3. Office Supplies 4. Land 5. Interest Receivable 6. Building 7. Accumulated Depreciation—Building 8. Depreciation Expense—Building 9. Accounts Payable 10. Interest Payable 11. Insurance Payable 12. Utilities Expense 13. Notes Payable 14. Prepaid Insurance 15. Service Revenue 16. Common Stock 17. Insurance Expense 18. Interest Expense 19. Office Supplies Expense 20. Unearned Service Revenue 21. Dividends

Consuming goods and services in the process of generating revenues results in expenses.

On January 7,stockholders invest $45,000 to initiate the operation of a business,JumpStart.Provide the journal entry for this transaction.

A debit balance in which of the following accounts would indicate a likely error?

The process of transferring the debits and credits from the journal entries to the accounts is known as posting.

That the total dollar amount of the debits equals the total dollar amount of the credits in the ledger accounts can be verified through an:

In which of the following types of accounts are decreases recorded by debits?

On January 12,JumpStart Co.purchased $870 in office supplies. a. Journalize this transaction as if JumpStart paid cash. b. 1 Journalize this transaction as if JumpStart placed it on account. b. 2 On January 18,JumpStart pays the amount due.Journalize this event.

Which of the following is not a correct rule of debits and credits?

Transactions are initially entered into a record called a journal.

Joshua Scott invests $40,000 into his new business.How would this transaction be entered in the journal in good form?

To determine the balance in an account,always subtract credits from debits.

Journalizing always eliminates fraudulent activity.

A notation in the post reference column of the general journal indicates that the amount has been posted to the ledger.

The cash account will always be debited.

State for each account whether it is likely to have a debit entries only,b credit entries only,or c both debit and credit entries when recording business transactions during the month.Also,indicate the normal balance of each account. 1. Fees Earned 2. Utilities Expense 3. Accounts Payable 4. Supplies 5. Cash 6. Accounts Receivable

On October 17,Nikle Company purchased a building and a plot of land for $750,000.The building was valued at $500,000 while the land carried a value of $250,000.Nikle paid $300,000 down in cash and signed a note payable for the balance.Provide the journal entry for this transaction.

Debiting the cash account will increase the account.

In which of the following types of accounts are increases recorded by credits?