Exam 3: The Accounting Cycle: Capturing Economic Events

In the general ledger, a separate "account" is maintained for each:

Black Systems sold and delivered modems to White Computers for $330,000 to be paid by White in three equal installments over the next three months. The journal entry made by Black Systems to record this transaction will include:

The price of the goods sold or services rendered during a given accounting period is called:

The following transactions occurred during May, the first month of operations for Hunter Products, Inc: * Issued 50,000 shares of capital stock to the owners of the corporation in exchange for $600,000 cash. * Purchased a piece of land for $400,000, making a $150,000 cash down payment and signing a note payable for the balance. * Made a $60,000 cash payment on the note payable from the purchase of land. * Purchased equipment on credit from BBW, Inc. for $63,000. -Land is purchased by making a cash down payment of $40,000 and signing a note payable for the balance of $130,000. The journal entry to record this transaction in the accounting records of the purchaser includes:

What type of account will normally contain a debit balance?

If the number of debit entries in an account is greater than the number of credit entries, the account will have a debit balance.

A journal entry which records revenue must include:

A trial balance that is out of balance indicates that:

What are total assets of Precision Manufacturing at the end of June?

Accounts are usually arranged in the ledger in financial statement order, that is, assets first, followed by liabilities, owners' equity, expenses, and revenues.

The following transactions occurred during May, the first month of operations for Hunter Products, Inc: * Issued 50,000 shares of capital stock to the owners of the corporation in exchange for $600,000 cash. * Purchased a piece of land for $400,000, making a $150,000 cash down payment and signing a note payable for the balance. * Made a $60,000 cash payment on the note payable from the purchase of land. * Purchased equipment on credit from BBW, Inc. for $63,000. -The purchase of office equipment at a cost of $7,600 with an immediate payment of $4,200 and agreement to pay the balance within 60 days is recorded by:

Collection of an accounts receivable:

The journal entry to record a particular business transaction includes a credit to a liability account. This transaction is most likely also to include:

Davis, Inc., a music group, entertained at a black-tie dinner dance on April 26, and collected the fee in full at the end of the evening. This transaction:

The principle that states revenue should be recognized at the time goods are sold or services rendered is called:

A business that is profitable and liquid will have more accounts with credit balances than with debit balances.

Dividends are an expense of a corporation and reduce both total assets and liabilities.

The bookkeeper for Wood Mfg. made the following journal entry on January 30, 2009: Land 201,500 Building 84,500 Cash. 65,000 Notes Payable 221,000 -Before the journal entry above, Wood had assets, liabilities, and owners' equity of $450,000, $100,000, and $350,000, respectively. What are total assets immediately after the above transaction occurs?

Double-entry accounting The accounting system of most businesses, whether manual or computer-based, is some form of a double-entry system of accounting. (A.) What is meant by the term "double-entry accounting"? (B.) Explain how the double-entry system is applied in accounting for the following transaction: Majestic Company purchases a piece of equipment costing $6,000, paying $3,000 cash with the balance of the purchase price to be paid within 60 days.

What is the total of Precision's liabilities at the end of June?