Exam 2: Analyzing and Recording Business Transactions

The controller for Tires and More,Inc.has recorded the following transactions during the month: the owner established the business with a $20,000 investment on the 1st of the month;the company recorded $36,000 of revenue for tires and services provided during the month;and expenses of $22,000 were recorded for the month.Additionally,on the last day of the month the owner withdrew $2,000 for personal expenses.What is the balance of Owner's Equity at the end of the month,and is the balance a debit or a credit?

Mesquite,Inc.engaged in the following transactions during October: -What is the amount of cash still to be received?

Purchase requests and purchase orders are economic events,and as such they affect a company's financial position,and are recognized in the accounting records.

A transaction should be recorded when title to merchandise passes from the supplier to the purchaser and creates an obligation to pay.

Which of the following is an example of egregious financial reporting fraud as discussed in the text?

The double-entry system

When a company records the purchase of 1 month of prepaid expense the transaction does not affect the totals of assets or liabilities and owner's equity.

Copper Company engaged in the following transactions during April If the balance in cash after these transactions is $115,000,how much cash was collected on account?

Proper journal form is a way of recording a transaction with the date,debit account,and debit amount shown on one line,and the credit account (indented)and credit amount shown on the next line.

Mesquite,Inc.engaged in the following transactions during October: -What is the balance in cash after these transactions?

Which of the following accounts would be placed after the debit(s)in a journal entry?

To find a description of a transaction,one should look at the

The primary purpose of the trial balance is to test the

Ironwood Company has just started operations.The owner,Robert Ironwood,invested $10,000 to get the business started.The company has made several sales on account,but has not yet collected any cash from these sales.At this point,Ironwood's cash flows for expenses are exceeding its cash flows from revenues.How might Ironwood make up the difference so it can maintain its liquidity?

The trial balance for Parker Company is as follows: -If the trial balance showed a balance of $14,000 in the Mike Parker,Withdrawals account and a balance of $30,000 in the Wages Expense account,what would be the amount of Advertising Fees Earned for the period?

It is never correct for a compound entry's debit totals and credit totals to be unequal.

Provide explanations for the following related journal entries: a. b. c. d. e.

Liabilities are established with credits and eliminated with debits.

The normal balance of an account is the side (debit or credit)used to decrease the account.

Which of the following accounts is increased with a credit?