Exam 2: Analyzing for Business Transactions

Trimble Graphic Design receives $1,500 from a client billed in a previous month for services provided.Which of the following general journal entries will Trimble Graphic Design make to record this transaction?

Dividends paid to stockholders are a business expense.

________ requires that each transaction affect,and be recorded in,at least two accounts.It also means that total amounts debited must equal total amounts credited for each transaction.

The numbering system used in a company's chart of accounts:

Describe the link between a business's income statement,the statement of retained earnings,and the balance sheet.

Select the account below that normally has a credit balance.

Jackson Consulting had the following accounts and balances at December 31: Account Debit Credit Cash \ 20,000 Accounts Receivable 6,000 Prepaid Insurance 1,500 Supplies 5,000 Accounts Payable \ 500 Common Stock 9,000 Retained Earnings 7,200 Dividends 1,000 Service Revenue 20,000 Utilities Expense 2,000 Salaries Expense 1,200 Totals \ 36,700 \ 36,700 Using the information in the table,calculate Jackson Consulting's reported net income for the period.

In a seller's accounting records,________ are promises of payment waiting to be received from customers.

J.Brown Consulting paid $2,500 cash for a 5-month insurance policy which begins on December 1.Given the choices below,determine the general journal entry that J.Brown Consulting will make to record the cash payment.Assume the company's policy is to initially record prepaid and unearned items in balance sheet accounts.

Larry Matt completed these transactions during December of the current year: Dec. 1 Began a financial services practice by investing \ 15,000 cash and office equipment having a \ 5,000 value. 2 Purchased \ 1,200 of office equipment on credit. 3 Purchased \ 300 of office supplies on credit. 4 Completed work for a client and immediately received a payment of \ 900 cash. 8 Completed work for Precept Paper Co. on credit, \ 1,700. 10 Paid for the supplies purchased on credit on December 3 . 14 Paid for the annual \ 960 premium on an insurance policy. 18 Received payment in full from Precept Paper Co. for the work completed on December 8 . 27 Larry withdrew \ 650 cash from the practice to pay personal expenses. 30 Paid \ 175 cash for the December utility bills. 30 Received \ 2,000 from a client for financial services to be rendered next year. Prepare general journal entries to record these transactions.

Joel Consulting received $3,000 from a customer for services provided.Joel's general journal entry to record this transaction will be:

________ and ________ are the starting points for the analyzing and recording process.

A company provided $12,000 of consulting services on account.The customer promises payment in 30 days.Identify the journal entry below that properly records this transaction.

To increase an asset account,we would ________ it and to increase a liability account,we would________ it.

A debit entry is always an increase in the account.

Miley Block is a building consultant.Shown below are (a)several accounts in her ledger with each account preceded by an identification number,and (b)several transactions completed by Block.Indicate the accounts debited and credited when recording each transaction by placing the proper account identification numbers to the right of each transaction. 1. Accourits Payable 2. Accounts Receivable 3. Cash 4. Consulting Fees Earned 5. Office Supplies 6. Office Supplies Expense 7. Telephone Expense 8. Unearned Revenue 9. Common Stock 10. Dividends 11. Insurance Expense 12. Prepaid Insurance Debit Credit Example: 2 4 Completed consulting work for a client who will pay at a later date. A. Received cash in advance from a customer for designing a building B. Purchased office supplies on credit. C. Paid for the supplies purchased in B. Received the telephone bill of the D. business and immediately paid it. E. Paid for a 3-year insurance policy

A report that lists a business's accounts and their balances,in which the total debit balances should equal the total credit balances,is called a(n):

An account is a record of increases and decreases in a specific asset,liability,equity,revenue,or expense item.

Based on the following trial balance for Barry's Automotive Shop,prepare an income statement,statement of retained earnings,and a balance sheet.Barry,the company's sole stockholder,made no additional investments in the company during the year.

The first step in the processing of a transaction is to analyze the transaction and source documents.