Exam 2: Measurement Concepts: Recording Business Transactions

During the most recent month,Ostriker Company began operations with a cash balance of $0 and made cash sales of $81,000.During this same time period,the company paid $32,000 in cash expenses.Additionally,the company purchased supplies on account,$34,000,made sales on account,$90,000,and received cash on the credit sales $52,000. a.If cash at the end of the month totals $74,000,how much cash was paid on account? b.What is the total amount still to be paid? c.What is the total amount still to be received?

When a business hires a new employee,a recordable transaction has occurred.

From the following alphabetical list of account balances,all of which are normal,for Ivy Maxx Company on July 31,20x5,prepare a trial balance in proper form (the amount of dividends paid by Ivy Maxx must be computed).

A decrease in a liability is recorded by a credit.

Which of the following statements is false about a journal entry?

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

For each of the following economic events determine whether the event is a business transaction on the date it occurs and whether it's recognized in the accounts on that date.Support your answer. a.On July 15,the controller of Kona Corporation orders a custom display case for the company's store. b.On July 31,a new administrative assistant is hired at a monthly salary of $3,500. c.On July 31,the controller of Kona Corporation receives a bill for electricity for the month of July.The bill is due on August 18 and will be paid on that date.

Normally,the value of an asset remains at its initial fair value or cost until the asset is sold,expires,or is consumed.

The process of transferring journal entry information from the journal to the ledger is called

Journal entries are typically posted to the ledger only at the end of the year.

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

The general ledger is the basic storage unit for accounting data and is used to accumulate amounts from similar transactions.

Which of the following accounts is increased with a credit?

When a transaction results in an account with a balance that isn't "normal," the "abnormal" balance should be corrected to the "normal" balance before copying the balance into the trial balance.

In the general journal,the year appears on the first line of the first column,the month on the next line of the first column,and the day in the second column opposite the month.

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

When a business erroneously records expenses as assets,it has violated the measurement issue of

A journal entry is a notation that consists of either a single debit or a single credit that is recorded in the general ledger.

If a debit to Supplies were posted as a credit,and a credit of the same amount to Cash were posted as a debit,what would be the effect,if any,on the two accounts and on the trial balance column totals?

In order to manage a company's liquidity,managers and other users of financial information must understand the difference between transactions that generate immediate cash and those that do not.