Exam 3: The Accounting Cycle: Capturing Economic Events

A trial balance consists of:

The term revenue can best be described as:

Which of the following would not appear on an income statement?

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

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

Which of the following accounts normally has a credit balance?

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

In February of each year,the Carlton Hotel holds a very popular wine tasting event.Tickets must be ordered and paid for in advance,and are typically sold out by November of the preceding year.The realization principle indicates that the revenue from these ticket sales should be recognized in the period in which the:

Collection of an accounts receivable:

The ledger is a chronological,day-by-day,record of business transactions.

Steps in the accounting cycle include (1)prepare financial statements,(2)post each journal entry to the appropriate ledger account,and (3)journalize transactions.Which of the following reflects the correct order of these steps?

Sue Costa,owner of A-1 Cleaning Services,invested an additional $75,000 in the company.Which of the following would be a part of the correct journal entry to record this transaction?

The matching principle:

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:

Indirect Oil Co.reports these account balances at December 31,2014 On January 2,2015,Indirect Oil collected $25,000 of its accounts receivable and paid $20,000 of its accounts payable.On January 3,2015,total liabilities are:

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:

If the trial balance has a higher debit balance than credit balance,it signifies:

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.

The need for familiarity with accounting concepts is:

When a company uses the double-entry method,the total dollar amount of debits recorded must equal the total dollar amount of credits recorded,but the number of debit and credit entries may differ.