Exam 3: The Accounting Cycle: Capturing Economic Events

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

[The following information applies to the questions displayed below.] Wilson Trucking,Inc.reports these account balances at January 1,2018 (shown in alphabetical order): On January 5,Wilson Trucking collected $175,000 of its accounts receivable,paid $150,000 on its accounts payable,and paid $11,000 on its note payable. -In a trial balance prepared for Wilson Trucking on January 6,2018,the total of the debit column is:

A trial balance consists of:

The matching principle:

[The following information applies to the questions displayed below.] The following entry appears in Martin Supply's general journal on March 10,2018: -This transaction involves:

Listed below are accounts of Global Company,each identified by a number.Following this list of accounts is a series of transactions.You are to indicate for each transaction the accounts that should be debited and credited by inserting the proper account numbers in the space provided.

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

[The following information applies to the questions displayed below.] Wilson Trucking,Inc.reports these account balances at January 1,2018 (shown in alphabetical order): On January 5,Wilson Trucking collected $175,000 of its accounts receivable,paid $150,000 on its accounts payable,and paid $11,000 on its note payable. -In a trial balance prepared for Wilson Trucking on January 1,2018,the total of the credit column is:

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

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:

200 Which of the following accounts normally has a credit balance?

[The following information applies to the questions displayed below.] Indirect Oil Co.reports these account balances at December 31,2017 On January 2,2018,Indirect Oil collected $25,000 of its accounts receivable and paid $20,000 of its accounts payable. -In a trial balance prepared at January 3,2018,the total of the debit column is:

The reason that revenue is recorded by a credit entry to a revenue account is:

[The following information applies to the questions displayed below.] 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. -What is the total owners' equity at the end of May?

The credit side of an account is the right side,while the debit side is the left side.

A journal entry to recognize an expense must include:

Recording transactions in T accounts;trial balance On May 15,George Manny began a new business,called Sounds,Inc. ,a recording studio to be rented out to artists on an hourly or daily basis.The following six transactions were completed by the business during May: (a. )Issued to Manny 5,000 shares of capital stock in exchange for his investment of $200,000 cash. (b. )Purchased land and a building for $410,000,paying $100,000 cash and signing a note payable for the balance.The land was considered to be worth $310,000 and the building $100,000. (c. )Installed special insulation and soundproofing throughout most of the building at a cost of $120,000.Paid $32,000 cash and agreed to pay the balance in 60 days.Manny considers these items to be additional costs of the building. (d. )Purchased office furnishings costing $18,000 and recording equipment costing $88,400 from Music Supplies.Sounds paid $28,000 cash with the balance due in 30 days. (e. )Borrowed $180,000 from a bank by signing a note payable. (f. )Paid the full amount of the liability to Music Supplies arising from the purchases in D above. 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 May 31 by completing the form provided. SOUNDS,INC. Trial Balance May 31,20__ Debit Credit

[The following information applies to the questions displayed below.] The following entry appears in Galloway Paints general journal on April 23,2018: -Before the journal entry above,Galloway had assets of $450,000;liabilities of $230,000;and owners' equity of $220,000.Total assets immediately after the above transaction has been recorded amount to:

The accrual basis of accounting recognizes expenses only when they are paid.

200 On June 18,Baltic Arena paid $6,600 to Marvin Maintenance,Inc.for cleaning the arena following a monster truck show.Which of the following most likely occurred on Baltic's books as a result of this transaction?