Exam 15: Basic Accounting for Transactions

The following trial balance was prepared from the general ledger of Hal's Auto Repair. HAL'S AUTO REPAIR Trial Balance October 31 Debit Credit Cash \ 975 Accounts receivable 3,800 Supplies 500 Repair equipment 13,000 Office equipment 6,600 Accounts payable \ 4,510 Common stock 10,000 Retained earnings 13,000 Dividends 4,200 Repair fees earned 10,875 Supplies expense Totals Since the trial balance did not balance, you decided to examine the accounting records.You found that the following errors had been made: 1.A purchase of supplies on account for $245 was posted as a debit to Supplies and as a debit to Accounts Payable. 2.An investment of $500 cash by the owner was debited to Common Stock and credited to Cash. 3.In computing the balance of the Accounts Receivable account, a debit of $600 was omitted from the computation. 4.One debit of $300 to the Dividends account was posted as a credit. 5.Office equipment purchased for $800 was posted to the Repair Equipment account. 6.One entire entry was not posted to the general ledger.The transaction involved the receipt of $125 cash at the time repair services were performed. Prepare a corrected trial balance for the Hal's Auto Repair as of October 31.

Which of the following statements about the Cash account are true?

A trial balance taken at year-end showed total credits exceeding total debits by $4,950.This discrepancy could have been caused by:

Which financial statements are prepared for a period of time?

A list of all accounts used by a company and the identification number assigned to each account is called a:

Which of the following is the appropriate journal entry if a company purchases equipment costing $100,000 by paying cash of $10,000?

The higher the debt ratio, the higher risk of a company not being able to meet its obligations.

According to IFRS, comparative information on financial statements is:

Given the trial balance amounts below, compute ending retained earnings.

Montgomery Marketing Co.had assets of $475,000; liabilities of $275,500; and equity of $199,500.Calculate its debt ratio.

The journal is known as a book of original entry.

Common Stock normally has a debit balance.

Debits increase both asset and expense accounts.

In a double-entry accounting system, the total amount debited must always equal the-total amount credited.

The four categories of equity accounts are _____________________, __________________, ______________________ and ______________________.

A $130 credit to Office Equipment was credited to Fees Earned by mistake.By what amounts are the accounts under- or overstated as a result of this error?

A liability created by the receipt of cash from customers in payment for products or services that have not yet been delivered to the customers is:

It is not necessary to keep separate accounts for all items of importance for business decisions.

Josephine's Bakery had the following assets and liabilities at the beginning and end of the current year: Assets Liabilities Beginning of the year \ 114,000 \ 68,000 End of the year 135,000 73,000 If the owners invested an additional $12,000 in the business and dividends of $5,000 were paid during the year, what was the amount of net income earned by Josephine's Bakery during the current year?

Double-entry accounting is an accounting system: