Exam 2: Analyzing for Business Transactions

Indicate whether a debit or credit entry would be required to record the following changes in each account. a.To decrease Cash b.To increase Common Stock c.To decrease Accounts Payable. d.To increase Salaries Expense. e.To decrease Supplies. f.To increase Revenue. g.To decrease Accounts Receivable. h.To increase Dividends.

Golddigger Services,Inc.provides services to clients.On May 1,a client prepaid Golddigger Services $60,000 for 6-months services in advance.Golddigger Services' general journal entry to record this transaction will include a:

George Butler owned a tugboat and was tired of his current job.He decided to open a business that provides day tugboat tours to tourists along the Mississippi River near his hometown.Prepare journal entries to record the following transactions.

A general journal gives a complete record of each transaction in one place,and shows the debits and credits for each transaction.

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

Posting is the transfer of journal entry information to the ledger.

Match the following terms with the appropriate definition. -Debit

Debit means increase and credit means decrease for all accounts.

Match the following terms with the appropriate definition. -Ledger

The dividends account normally has a debit balance.

If cash is received from customers in payment for products or services that have not yet been delivered to the customers,the business would record the cash receipt as:

Given each of the following errors,indicate on the table below the amount by which the trial balance will be out of balance and which trial balance column (debit or credit)will have the larger total as a result of the error. a.$100 debit to Cash was debited to the Cash account twice. b.$1,900 credit to Sales was posted as a $190 credit. c.$5,000 debit to Office Equipment was debited to Office Supplies. d.$625 debit to Prepaid Insurance was posted as a $62.50 debit. e.$520 credit to Accounts Payable was not posted. Amount Out Column Having Error of Balance Larger Total a. b. c. d. e.

On a trial balance,if the Debit and Credit column totals are equal,then:

When a company provides services for which cash will not be received until some future date,the company should record the amount billed as accounts receivable.

An account used to record stockholders' investments in a business is called a(n):

For each of the following accounts,identify whether a debit or credit yields the indicated change a. To increase Fees Earned b. To decrease Cash c. To decrease Unearned Revenue d. To increase Accounts Receivable e. To increase Common Stock f. To decrease Notes Payable g. To increase Prepaid Rent h.To increase Salaries Expense i.To increase Accounts Payable j. To decrease Prepaid Insurance

Given the following errors,identify the one by itself that will cause the trial balance to be out of balance.

What is a trial balance? What is its purpose?

Match the following terms with the appropriate definition. -Journal

Unearned revenue is classified as a(an)________ on a business's balance sheet.