Exam 3: The Accounting Cycle: Capturing Economic Events

Bruno's Pizza Restaurant makes full payment of $8,300 on an account payable to Stella's Cheese Co. Stella's would record this transaction with a:

The manager of Grande Home Improvements purchased several cash registers for the business on June 10 but does not remember whether he paid cash for the full price or still owes a balance to the vendor. Where is the best place for the manager to get the information about this transaction?

Revenues increase equity because:

Effects of a series of transactions on balance sheet items Clark Plumbing had the following transactions during the month of June, the first month of operations for the business: * The corporation issued 12,000 shares of share capital to Bill Clark in exchange for his investment of $72,000 cash. * Purchased $36,000 of equipment; made an $8,000 down payment and signed a note payable for the balance. * Made payment of $4,000 on the amount owed for equipment (A.) Compute the balance in the Cash account at the end of June. (B.) What are the total assets of Clark Plumbing at the end of June? (C.) Compute the balance in the Notes Payable account at the end of June. (D.) What is the total amount of equity at the end of June?

Master Equipment has a $17,400 liability to Arrow Paint Co. When Master Equipment makes a partial payment of $7,600 on this liability, which of following is true about the journal entry made by Master to record this transaction?

In a computerized accounting system posting may be done automatically but journalizing must be done by someone with an understanding of recording transactions.

Which of the following is not true regarding the ledger account for Cash?

Recording transactions journal entry grid A list of accounts for Harding Company is given below, followed by a series of transactions. Indicate the accounts that would be debited and credited in recording each transaction by placing the appropriate number (or numbers) in the space provided. 1 Cash 5 Delivery Equipment 2 Accounts Receivable 6 Notes Payable 3 Land 7 Accounts Payable 4 Building 8 Share Capital 9 Retained Earnings Transaction Accounts(s) Debited Account(s) Credited Example: Purchased office equipment, paying part cash, with the balance due on account 5 1,7 G. Purchased land and a building, paying part cash and issuing a note payable for the balance of the purchase price H. Sold a piece of the company's office equipment at cost; received part of the proceeds in cash, with the balance due in 30 days I. Collected arn account receivable J. Borrowed money from a bank and signed a note payable due in one year K. Paid an account payable L. Issued share capital in exchange for cash

A transaction is first recorded in which of the following accounting records?

If your trial balance has a smaller debit balance than credit balance, it signifies:

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

The general ledger is sometimes called the book of original entry because it is the accounting record where transactions are first recorded.

The rules of debit and credit may be summarized as follows:

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. In a trial balance prepared for Ceramic Products on January 1, 2009, the total of the credit column is:

The sequence of accounting procedures used to record, classify and summarize accounting information is called the:

A journal entry to recognize an expense could include each of the following, except:

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

On June 27, Healthy Life Services Limited performed extensive tests on lab specimens submitted by several customers and sent invoices totaling $5,200, due in 30 days.

The statement "This business produces profit of $520,000" is unclear because it fails to specify:

Rules of debit and credit as applied to balance sheet accounts Items in the balance sheet are classified into three categories: assets, liabilities, and equity. (A.) Identify by name two ledger accounts in each of the first two categories above (assets and liabilities) and one equity account. State whether each account would normally have a debit or credit balance. (B.) Describe briefly the rules of debit and credit as applied to the three categories of balance sheet accounts: asset accounts, liability accounts, and equity accounts.