Exam 2: Analyzing Business Transactions

Which of the following accounts has a normal debit balance?

What two purposes are served by using the Post.Ref.columns of a journal and ledger?

Which of the following does not affect retained earnings?

Which of the following is not a measurement issue in accounting?

In the journal provided,prepare journal entries without explanations for the following transactions.Write "no entry" if none is needed. a. Received a $1,500 invoice for this month's rent. Payment will not be made right away. b. Paid $1,600 for insurance premiums to cover the next six months. c. A $350 dividend is declared and paid. d. The rent of a is paid. e. Purchased land for $60,000. The company paid half in cash and issued a promissory note for the other half.

In the journal provided,prepare journal entries (in good form)for the following transactions.If no entry is required,write "no entry." Omit explanations. Nov. 1 Investors opened a dance school called Olga's Dance Studio by depositing $\$ 24,000$ into a business bank account in exchange for 24,000 shares of $\$ 1$ par value stock. 2 Paid three months' rent in advance, $\$ 2,400$ . 4 Hired a part-time assistant, to be paid $\$ 275$ per week. 6 Purchased sound equipment for $\$ 4,200$ . Paid $\$ 600$ in cash, the remainder to be paid in installments of $\$ 1,200$ every two weeks. 8 Signed up ten students, who will begin lessons on November 10 , at $\$ 100$ per week per student. 17 Received the first week's tuition from nine students; the tenth student will remit payment in three days. 17 Paid the assistant his first week's wages. 20 Received payment from the tenth student. 20 Paid the next installment on the sound equipment purchased on November 6. 23 Received an electric bill of $\$ 150$ , to be paid on December 1 .

From the following alphabetical list of account balances,all of which are normal,for Kasper Corporation on July 31,2010,prepare a trial balance in proper form (the amount of Dividends must be computed). Accounts Payable \ 500 Accounts Receivable 200 Cash 80 Common Stock 90 Dividends ? Equipment 700 Prepaid Advertising 20 Retained Earnings 600 Revenue Earned 400 Wages Expense 50 Wages Payable 50

The chart of accounts makes finding accounts in the ledger easier.

Revenue should be recorded when it has been earned,not when the related cash has been collected.

Briefly discuss the differences between Prepaid Insurance and Insurance Expense.

The Office Supplies account is classified as a(n)

Here is the trial balance for McLeary Corporation: McLeary Corporation Trial Balance January 31, 2010 Cash \ 3,000 Accounts Receivable 2,000 Art Supplies 3,000 Office Supplies 5,000 Prepaid Rent 7,000 Prepaid Insurance 5,000 Art Equipment 5,000 Office Equipment 3,000 Accounts Payable \ 10,000 Common Stock 5,000 Retained Earnings 5,000 Dividends ? Advertising Fees Earned ? Wages Expense ? Utilities Expense 5,000 Telephone Expense 3,000 \A \B If the balance of the Dividends account were $36,000 and the balance of the Wages Expense account were $5,000,what would be the amount of B?

When payment is received for services not yet rendered,no entry is recorded until that service has been rendered.

When a magazine company receives advance payment for a subscription,what is the required journal entry to be recorded?

For a T account,an account balance is the difference in total dollars between total debit footings and total credit footings.

The primary purpose of the trial balance is to test the

Which of the following accounts should be credited in a journal entry?

A transposition error will cause the trial balance to be out of balance by an amount that is evenly divisible by 9.

The Post.Ref.column in the general journal is used to show that an amount has been posted to the ledger when which of the following is placed in it?

Despite the advantages of a computer accounting information system,posting still must be done manually.