Exam 2: Analyzing and Recording Transactions

Which of the following is the appropriate journal entry if a company performs a service and is paid immediately?

Which financial statements are prepared for a period of time?

The following are all of the accounts of Flaherty Company that have a balance at the end of August.All accounts have normal balances: Accounts receivable \ 36,000 Cash \ 27,000 Equipment 59,000 Advertising expense 5,000 Service revenues earmed 75,000 Accounts payable 31,000 Rent expense 3,600 Dividends 24,000 Office supplies 1,500 Salaries expense 30,000 Notes payable 22,000 Common stock 20,000 Retained earnings 58,100 a.Calculate net income b.Determine the amount of retained earnings to be shown on the August 31 balance sheet.

The accounting process begins with:

The dividends account normally has a credit balance since it is an equity account.

A trial balance taken at year-end showed total credits exceeding total debits by $4,950.This discrepancy could have been caused by:

A general journal is:

Other names for the income statement are earnings statement,statement of operations,or profit and loss statement.

Montgomery Marketing Co.had assets of $475,000; liabilities of $275,500; and equity of $199,500.Calculate its debt ratio.

A sales invoice:

Vicki Lake is a computer consultant.Shown below are (a)several accounts in her ledger with each account preceded by an identification number and (b)several transactions completed by Lake.Indicate the accounts debited and credited when recording each transaction by placing the proper account identification numbers to the right of each transaction. 1. Accounts Payable 7. Telephone Expense 2. Accounts Receivable 8. Unearned Consulting Fees 3. Cash 9. Common Stock 4. Consulting Fees Earned 10. Dividends 5. Office Supplies 11. Insurance Expense 6. Office Supplies Expense 12. Prepaid Insurance

Josephine's Bakery had the following assets and liabilities at the beginning and end of the current year: Assets Liabilities Beginning of the year \ 114,000 \ 68,000 End of the year 135,000 73,000 If the owners invested an additional $12,000 in the business during the year,but no dividends were paid,what was the amount of net income earned by Josephine's Bakery during the current year?

A $72,000 receipt of cash from a customer paying on their account was recorded as a $72,000 debit to Accounts Receivable.Assuming this journal entry was posted,what correcting entry (if any)is needed?

Asset accounts normally have credit balances and expense accounts normally have debit balances.

A company paid $2,500 cash to satisfy a previously recorded account payable,the only liability on the books.Assume the company had a $4,000 balance in Cash immediately prior to this transaction.Set up the necessary T-accounts below and show how this transaction would be recorded directly in those accounts.Show ending account balances.

A trial balance that is in balance is proof that no errors were made in journalizing the transactions,posting to the ledger,and preparing the trial balance.