Exam 2: Recording Business Transactions

Purchasing a three-year insurance policy for cash would include a:

Receiving a cheque from a customer on account would include a:

When a business sells inventory in exchange for cash,which of the following accounts is credited?

Moving data to the ledger is known as journalizing.

Use T-accounts to analyze the following transactions for the Red Panda Corporation: a.Owner invested $550,000 cash and equipment with a value of $5,500 into the business received common shares in return. b.Purchased office supplies on account,$300. c.Performed services for a customer on account,$3,500. d.Purchased a building by paying $100,000 down and signing a note for the remainder of $800,000. e.Performed services for a customer and immediately collected $4,500 cash. f.Paid employees salaries of $2,200. Determine the ending cash balance.Note this is their first month of operations.

A trial balance is a useful device because it provides a check on accuracy by showing whether:

State the decrease side (debit or credit)for each of the following accounts. a.Prepaid Expenses b.Contributed Capital c.Buildings d.Unearned Revenue e.Dividends f.Notes Receivable g.Interest Payable h.Sales Revenue i.Cost of Sales

A business purchases a truck by signing a note payable to the seller.Such a transaction would include a:

When the owner of a business invests cash into the business,which of the following accounts is debited?

Given the following list of errors,determine the effect on assets,liabilities,and shareholders' equity by completing the chart below.Use (+)to indicate overstated,(-)to indicate understated,and (0)to indicate no effect.Transaction (a)is completed as an example. a.The entry to record the purchase of $800 of equipment on account was never posted. b.The entry to record the purchase of $100 of supplies for cash was posted as a debit to Supplies and a credit to Accounts Payable. c.A $1,000 debit to Cash was posted as $100. d.A $400 debit to the Accounts Payable account was never posted. e.A debit to Accounts Receivable of $500 was posted as a credit to Accounts Receivable. b. c. d. e.

The purchase of land for cash would:

Which type of account is credited when a company pays its employees?

The accounting process of copying of amounts from the journal to the appropriate ledger accounts is referred to as:

The accounting transaction to record the payment of salaries to employees would include a:

Expenses increase shareholders equity.That is why they are credits.

Paying a dividend to the company's shareholders would include a:

Define and provide an example of each of the following.

Debits are always recorded (journalized)after credits.

A credit increases the balance of which types of accounts?

What criteria are used to determine if a transaction has occurred?