Exam 2: Recording Business Transactions

Provide a definition of each of the following accounting terms. Accounting Term Definition Ledger Trial Balance Debit

The trial balance verifies the equality of debits and credits on a specific date.

A sole proprietorship reported the following transactions for the month of March.The transactions have been journalized and posted to the proper accounts. Mar. I The business received $\$ 8,000$ cash from the owner in excharge for capital. Mar. 2 Paid the first month's rent of $\$ 600$ . Mar. 3 Purchased equipment by paying $\$ 1,000$ cash and executing a note payable for $\$ 3,000$ . Mar. 4 Purchased office supplies for $\$ 600$ cash. Mar. 5 Billed a client for $\$ 11,000$ of desipr services completed. Mar. 6 Received $\$ 9,000$ on account for the services previously recorded. What is the balance in Accounts Receivable?

Ranger Pool Company is a sole proprietorship.Ranger contributed $40,000 of cash in exchange for capital.Which of the following accounts will be credited?

Musical Instruments Company sells musical instruments.On December 31,2019,after its first month of business,the sole proprietorship had the following balances in its accounts,listed alphabetically. Accounts Receivable \ 5,000 Accounts Payable 15,000 Advertising Expense 2,000 Building 16,500 Cash ? Torgensen, Capital 5,000 Torgensen, Withdrawals 1,200 Equipment 2,000 Land 70,000 Notes Payable 60,000 Office Supplies 3,400 Prepaid Rent 1,200 Salaries Expense 4,000 Service Revenue 72,000 Utilities Expense 4,100 Determine the balance in the cash account and prepare the trial balance.

The T-account is a summary device that is shaped like a capital T with debits posted on the left side of the vertical line and credits posted on the right side of the vertical line.

Which of the following statements is TRUE of a trial balance?

A compound journal entry has more than two accounts,but the total dollar value of the debits still must equal the total dollar value of the credits.

An accounts receivable is often described as a sale "on account."

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

A business receives $40,000 for services that it will perform over the next four months.Which of the following accounts is credited?

Explain the difference between Accounts Receivable and Accounts Payable.

The following are the current month's balances for ABC Financial Services Company before preparing the trial balance. Accounts Payable \ 9,000 Revenue 5,000 Cash 2,000 Expenses 15,500 Furniture 11,000 Accounts Receivable 12,000 Miller, Capital ? Notes Payable 6,500 What amount should be shown for Miller,Capital on the trial balance?

If the total debits equal the total credits on the trial balance,the individual account balances will be error free.

What are two ways in which a company can improve its debt ratio?

A trial balance summarizes the ledger by listing all the accounts with their balances at a point in time.

Accounts Payable is a(n)________ account and has a normal ________ balance.

A trial balance is the list of only a company's asset and liability accounts,along with their account numbers,at a point in time.

Which of the following accounts decreases with a credit?

Balancing errors can be detected by computing the difference between total debits and total credits on the trial balance.List three actions that can then be used to find the errors.