Exam 2: Accounting for Business Transactions

While in the process of posting from the journal to the ledger,a company failed to post a $500 debit to the Equipment account.The effect of this error will be that:

A bookkeeper has debited an asset account for $3,500 and credited a liability account for $2,000.Which of the following would be an incorrect way to complete the recording of this transaction:

Jackson Services had the following accounts and balances at December 31: Using the information in the table,calculate the company's reported net income for the period.

A company's chart of accounts is a list of all the accounts used and includes an identification number assigned to each account.

If a company purchases equipment paying cash,the journal entry to record this transaction will include a debit to Cash.

A law firm collected $1,800 in advance for work to be performed in three months.Which of the following general journal entries will the firm make to record this transaction?

A $15 credit to Sales was posted as a $150 credit.By what amount is the Sales account in error?

The heading on every financial statement lists the three W's-Who (the name of the business); What (the name of the statement); and Where (the organization's address).

Indicate on which financial statement each of the following items appears.Use I for income statement,E for statement of retained earnings and B for balance sheet.

Jennings Co.has total assets of $425 million.Its total liabilities are $110.5 million.Its equity is $314.5 million.Calculate the debt ratio.

At a given point in time,a trial balance is a list of all ledger accounts and their balances.

Which of the following is NOT an asset account:

If a company provides services to a customer on credit,the company providing the service should credit Accounts Receivable.

Identify by marking an X in the appropriate column,whether each of the following items would likely serve as a source document.The first one is done as an example

Silvia's Studio provided $150 of dance instruction and rented out its dance studio to the same client for another $100.The client paid cash immediately.Identify the general journal entry below that Silvia's Studio will make to record the transaction.

Jarrod Automotive,owned and operated by Jarrod Johnson,began business in September of the current year.Jarrod,a mechanic,had no experience with recording business transactions.As a result,Jarrod entered all of September's transactions directly into the ledger accounts.When he tried to locate a particular entry he found it confusing and time consuming.He has hired you to improve his accounting procedures.The accounts in his General Ledger follow:

Edison Consulting received a $300 utilities bill and immediately paid it.Edison's general journal entry to record this transaction will include a:

A debit is used to record which of the following:

Rowdy Bolton began Bolton Office Services in October and during that month completed these transactions: a.Invested $10,000 cash and $15,000 of computer equipment in the business in exchange for common stock. b.Paid $500 cash for an insurance premium covering the next 12 months. c.Completed office services for a customer and collected $1,000 cash. d.Paid $200 cash for office supplies. e.Paid $2,000 for October's rent. Prepare journal entries to record the above transactions.Explanations are unnecessary.

At the end of the current year,James Co.reported total liabilities of $300,000 and total equity of $100,000.The company's debt ratio was: