Exam 2: Analyzing Transactions

McMann Company has a condensed income statement as shown:: Sales \ 198,000 \ 165,500 Total operating expenses 163,000 147,500 Net income 35,000 18,000 Using horizontal analysis,calculate the amount and percent change for Sales.Round to one decimal place.

On November 30th,it was discovered that a $550 of a transaction recording the purchase of office supplies was really office equipment.Prepare the journal entry to correct this situation.

Which of the following accounts is a stockholders' equity account?

Journalizing transactions using the double-entry bookkeeping system will eliminate fraud.

On August 30th JumpStart pays numerous bills which include: Payment to the landlord for August rent - $2,300 Payment to the Gas & Electric Company for August's bill - $525 Payment of employee wages for the last half of August - $1,750 Payment of shopping center's parking lot cleaning fee - $275 Journalize these payments as one compound journal entry.

(a) On October 10th,Nikle Company purchased supplies worth $1,800 on account.Prepare the journal entry to record this transaction. (b) Nikle Company paid for the supplies purchased in (a)on October 25th.Prepare the journal entry to record this transaction.

On January 1,2011,Cary Parsons established Cary's Catering Service.Listed below are accounts to use for transactions (a)through (e),each identified by a number.Following this list are the transactions that occurred during the first month of operations.You are to indicate for each transaction the accounts that should be debited and credited by placing the account number(s)in the appropriate box.

A credit balance in which of the following accounts would indicate a likely error?

What effect does this journal entry have on the accounts?

Journalizing eliminates fraud.

Several transactions are listed below,with the accounting equation stated to the right side of each.Use the following identification codes to indicate the effects of each transaction on the accounting equation.Write your answers in the space provided under the accounting equation.You need an identification code for each element of the accounting equation.An example is given before the first transaction.

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

The recording of cash payments from the cash account is done by entering the amount as a credit.

Exhibit 2-1 All nine transactions for Ralston Sports Co.for September 2011,the first month of operations,are recorded in the following T accounts: Refer to Exhibit 2-1.Prepare a trial balance,listing the accounts in their proper order.

Posting a transaction twice will cause the trial balance totals to be equal.

Transactions are initially entered into a record called a journal.

A trial balance determines the accuracy of the numbers.

Which of the following will increase retained earnings?

Dividends decrease retained earnings and are listed on the income statement as a deduction from revenue.

What effect does this journal entry have on the accounts?