Exam 3: The Accounting Cycle: Capturing Economic Events

Preparing a journal entry in proper form involves all the following except:

If a company purchases equipment for cash:

Every transaction which affects an income statement account also affects a balance sheet account.

The following transactions occurred during May, the first month of operations for Hunter Products Limited: * Issued 50,000 shares of share capital 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 Limited for $63,000. -Refer to the above data. What is the total of Hunter Products' liabilities at the end of May?

Eagle News has a $6,000 account receivable from one of its advertisers, Allwood Floors. When Eagle receives $3,600 from Allwood as partial payment:

In a ledger, debit entries cause:

The following entry appears in Martin Supply's general journal on March 10, 2010: Accounts Receivable 35,000 Cash 21,000 Equipment 51,000 -Refer to the above data. Before the journal entry above, Martin had assets of $900,000; liabilities of $460,000; and equity of $440,000. Total assets immediately after the above transaction has been recorded amount to:

If a company purchases equipment on account:

A journal entry to recognize an expense must include:

Which of the following accounting procedures requires the greatest knowledge of generally accepted accounting principles?

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:

A trial balance cannot be distributed to stockholders in lieu of a balance sheet.

If ledger accounts are maintained in three-column, running balance form, the journal should be maintained in the same format.

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

The running balance form or the T account form is typically used in the trial balance to display the accounts and their amounts.

A trial balance proves that equal amounts of debits and credits were posted to the ledger.

A journal entry which records revenue must include:

Recording transactions in general journal Enter the following transactions in the two-column journal of Baumann Bathrooms. Include a brief explanation of the transaction as part of each journal entry. Mar $\quad$ 1 $\quad$ Borrowed $\$ 90,000$ cahs trom the bank by signing a 90 -day note payable. $\quad$ $\quad$ 3 $\quad$ Issued an additional 5,000 shares of share capital in exchange for $\$ 40,000$ cash $\quad$ $\quad$ 4 $\quad$ Purchased an adjacent vacant lot ofr use as parking space. The price was $\$ 70,000$ , of which $\$ 30,000$ was paid in cash; a note payable was issued for the balance. $\quad$ $\quad$ 8 $\quad$ Acquired shop equipment from Elite Baths for $\$ 5,400$ cash. $\quad$ $\quad$ 8 $\quad$ Collected an account receivable of $\$ 2,900$ from a customer, Beekman Art Shoppe. $\quad$ $\quad$ 9 $\quad$ Issued a check for $\$ 1,060$ in full payment of an account payable

Every transaction affects equal numbers of ledger accounts and is recorded by equal dollar amounts of debits and credits.

The following entry appears in Martin Supply's general journal on March 10, 2010: Accounts Receivable 35,000 Cash 21,000 Equipment 51,000 -Refer to the above data. This transaction involves: