Exam 2: Recording Business Transactions

The higher the debt ratio,the lower the risk of default.

In reviewing the T-account for Accounts Receivable,you find that the beginning balance is zero,the total increases are $5,400 and the total decreases are $2,100.This means that the ending balance of the account is a credit balance of $3,300.

The owner's claim to the assets of a business is called owner's equity.

At the end of a month,a sole proprietorship has the following ending balances in its accounts in the ledger. Cash \ 5,000 Accounts Receivable 1,200 Office Supplies 200 Land 20,000 Accounts Payable 1,300 Larsen, Capital 1,000 Service Revenue 35,500 Rent Expense 4,500 Salaries Expense 6,000 Utilities Expense 900 Use this data to prepare a trial balance.

The following transactions for the month of March have been journalized and posted to the proper accounts of a sole proprietorship. Mar. The business received $\$ 10,000$ cash from the owner of the business, Morris Tharps. The business gave capital to Mortis Tharps. Mar. 2Paid the first month's rent of $\$ 1,000$ . Mar. 3Purchased equipment by paying $\$ 2,000$ cash and executing a note payable for $\$ 5,000$ . Mar. 4Purchased office supplies for $\$ 710 \mathrm { cash }$ Mar. 5Billed a client for $\$ 9,000$ of design services completed. Mar. 6Received $\$ 7,600$ on account for the services previously recorded What is the balance in Cash on March 6?

Which of the following is a liability account?

Which of the following is a liability account?

Transactions are first recorded in a ________.

Watson Foods Company,a sole proprietorship,reported the following transactions for September 2019. a)The business received $23,000 cash from the owner in exchange for capital. b)The business purchased office equipment for $11,500 for which $4,000 cash was paid and the balance was put on a note payable. c)Paid insurance expense of $1,200 cash. d)Paid the September utility bill for $800 cash. e)Paid $1,800 cash for September rent. f)The business had sales of $11,000 in September.Of these sales,60% were cash sales,and the balance was credit sales. g)The business paid $8,000 cash for office furniture. What are the total liabilities at the end of September 2019?

All asset accounts and equity accounts increase with a debit.

Van Jones is the owner of a sole proprietorship.Van took $5,000 from the business for personal use.Which of the following accounts is debited?

Saturn Company paid the rent for the current month in cash.Which of the following accounts will be used to record the transaction?

The account title used for recording the payment of rent in advance for an office building is ________.

A journal entry for a $210 payment to purchase office supplies was erroneously recorded as a debit to Office Supplies for $550 and a credit to Cash for $210.Which of the following statements correctly states the effect of the error on the trial balance?

For Owner,Capital,the category of account and its normal balance is ________.

After posting the journal entries from the journal to the ledger,the accounting equation should be in balance.

List the five steps of the journalizing and posting process.

A trial balance is a list of all of the ledger accounts of a company with their balances at a point in time.

A payment of an expense in advance is called a prepaid expense.

Which of the following represents the correct flow of accounting data?