Exam 2: Analyzing Business Transactions

Unearned revenues are classified as liabilities on the balance sheet.

In accounting,to recognize means to record a transaction or event.

Which of the following errors will cause the trial balance to be out of balance?

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

Which of the following accounts has a normal credit balance?

Indicate whether each account below has a normal debit or a normal credit balance. a. Automobiles b. Accounts Payable c. Common Stock d. Prepaid Rent e. Advertising Expense f. Service Revenue g. Dividends h. Retained Earnings i. Land j. Interest Payable k. Notes Receivable

Which of the following accounts will eventually be followed with an inflow of cash?

In the journal provided,prepare journal entries (in good form)for the following transactions.If no entry is required,write "no entry." Omit explanations. Mar. 1 Investors opened a dance school, called Yolonda's Dance Studio, by depositing $\$ 15,000$ into a business bank account in exchange for 15,000 shares of $\$ 1$ par value stock. 2 Paid three months' rent in advance, $\$ 1,800$ . 4 Hired a part-time assistant, to be paid $\$ 250$ per week, starting next week. 6 Purchased sound equipment for $\$ 2,000$ . Paid $\$ 400$ in cash, the remainder to be paid in installments of $\$ 800$ every two weeks. 8 Signed up five students, who will begin lessons on March 10, at $\$ 80$ per week per student. 17 Received the first week's tuition from four students; the fifth student will remit payment in three days. 17 Paid the assistant his first week's wages. 20 Received payment from the fifth student. 21 Paid the first installment on the sound equipment purchased on March 6. 23 Received an electric bill of $\$ 100$ , to be paid April 1 .

When a business reports an asset at an inflated dollar amount,it has violated the measurement issue of

One might see "J2" correctly placed in the Post.Ref.column of the journal.

The double-entry system is possible because all business transactions have two equal and opposite aspects.

Why is the Dividends account increased by a debit? Explain in terms of its relationship to stockholders' equity.

The amount of profit would always be equal to the ending cash balance.

When a dividend is declared and paid,the Dividends account is debited and Cash is credited.

In a journal entry,assets are always recorded before liabilities.

Typically,the chart of accounts begins with

Which of the following statements is not necessarily true about a journal entry?

When stockholders make an investment,the Common Stock account is debited.

Given the following ledger account and postings,complete the Balance column.Assume no previous postings in the account.

The numbering scheme of a chart of accounts should contain no gaps.