Exam 3: The Accounting Cycle: Capturing Economic Events

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:

Which of the following errors would not be disclosed by preparation of a trial balance?

"I was just following orders" is an acceptable defense if you committed an unethical action during an audit.

The following transactions occurred during March, the first month of operations for Quality Galleries Limited: * Share Capital was issued in exchange for $360,000 cash. * Purchased $180,000 of equipment by making a $60,000 cash down payment and signing a note payable for the balance. * Made a $35,000 cash payment on the note payable from the purchase of equipment. * Sold a piece of equipment for cash of $18,000. The equipment was sold at cost, so there is no gain or loss on the sale. -Refer to the above data. What is the total equity at the end of March?

Journalize and post basic transactions Geller Landscaping was organized on April 5 when the corporation issued 20,000 shares of share capital to Larry Geller in exchange for $60,000 cash. * On April 8, the business acquired gardening equipment by paying cash of $26,000 and signing a $20,000 note payable, due in four monthly installments of $5,000 each, beginning on April 15. * On April 15, Larry Geller made the first payment on the note payable by writing a check from the business bank account. Instructions: Journalize these three transactions and post to the ledger accounts GENERAL JOURNAL Page 1 Date Account Titles \& Explanations Debit Credit

Which of the following accounts normally has a debit balance?

The left-hand side of an account is used for recording debits and the right-hand side for recording credits.

Collection of an accounts receivable:

Recording transactions directly in T accounts; trial balance On July 20, Mollie Rose began a new business called MR Printing, which provides typing, duplicating, and printing services. The following six transactions were completed by the business during July. (A.) Issued to Rose 1,000 shares of share capital in exchange for her investment of $200,000 cash. (B.) Purchased land and a small building for $450,000, paying $165,000 cash and signing a note payable for the balance. The land was considered to be worth $240,000 and the building $210,000. (C.) Purchased office equipment for $30,000 from Quality Interiors Limited Paid $17,000 cash and agreed to pay the balance within 60 days. (D.) Purchased a motorcycle on credit for $3,400 to be used for making deliveries to customers and agreed to make payment to Spokes Limited within 10 days. (E.) Paid in full the account payable to Spokes Limited (F.) Borrowed $30,000 from a bank and signed a note payable due in six months. Instructions (A.) Record the above transactions directly in the T accounts below. Identify each entry in a T account with the letter shown for the transaction. This exercise does not call for the use of a journal. (B.) Prepare a trial balance at July 31 by completing the form provided.

Ceramic Products Limited reports these account balances at January 1, 2009 (shown in alphabetical order): Accounts Payable \ 28,000 Accounts Receivable \ 20,000 Buildings \ 153,000 Share Capital \ 185,000 Cash \ 13,000 Equipment \ 20,000 Land \ 80,000 Notes Payable \ 24,000 Retained Earnings \ 49,000 On January 5, Ceramic Products collected $12,000 of its accounts receivable and paid $11,000 on its note payable. -Refer to the above data. On January 5, 2009, total liabilities are:

Double-entry accounting is characterized by which of the following?

Green Systems sold and delivered modems to Blue Computers for $660,000 to be paid by Blue in three equal installments over the next three months. The journal entry made by Blue Computers to record the last of the three installment payments will include:

A trial balance consists of:

Given the following list of accounts and their amounts for Hayden's Co. in alphabetical order, prepare a trial balance for December 31, 2009 as it should be presented. Accounts Payable 5,000 Accounts Receivable 3,000 Advertising expense 400 Building 18,000 Share Capital 14,100 Cash 6,500 Dividends 1,600 Land 26,000 Notes Payable 15,000 Revenue 31,000 Retained Earnings ? Supplies 700 Utilities expense 900 Wage expense 13,250 Wages Payable 3,050

A journal entry to record revenue could include each of the following, except:

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

The matching principle is best demonstrated by:

An increase in a liability is recorded by a credit; an increase in equity by a debit.

Profit is:

The collection of an account receivable is recorded by a debit to Cash and a credit to Accounts Payable. If this error is not corrected: