Question 1

At June 1, 2014, Estrada Industries had an accounts receivable balance of ₤12,000. During the month, the company performed credit services of ₤30,000 and collected accounts receivable of ₤32,000. What is the balance in accounts receivable at June 30, 2014?

Accepted Answer

The answer of At June 1, 2014, Estrada Industries had...

Question 2

Transactions in a journal are initially recorded in

Accepted Answer

A)  account number order. 
B)  dollar amount order. 
C)  alphabetical order. 
D)  chronological order.

Question 3

An accounting convention is best described as

Accepted Answer

A)  an absolute truth. 
B)  an accounting custom. 
C)  an optional rule. 
D)  something that cannot be changed.

Question 4

The Dividends account

Accepted Answer

A)  appears on the income statement along with the expenses of the business. 
B)  must show transactions every accounting period. 
C)  is increased with debits and decreased with credits. 
D)  is not a proper subdivision of retained earnings.

Question 5

The double-entry system is a logical method for recording transactions and results in equal debits and credits for each transaction.

Accepted Answer

A) True 
 B)False

Question 6

Jim Coleman, Jr. was appointed the manager of Maris Properties, a recently formed company that manages residential rental properties. Linda Grider is the accountant. She prepared a chart of accounts based on an analysis of the expenditures of the company. One of the largest expense categories is Travel and Entertainment. Mr. Coleman believes that it is important to maintain a presence in the social life of the city. In this, he sharply differs from his father, Jim Coleman, Sr. The elder Mr. Coleman has set up Maris Properties in order to test his son's management skills before allowing him to manage the more lucrative commercial property business. Mr. Coleman, Sr. provided the capital for Maris, and maintains close contact with the company. He allowed his son, however, to hire his own employees.
Mr. Coleman has asked Ms. Grider to change the name of the Travel and Entertainment account to Property Development. He hopes to deflect his father's attention away from the amount he has spent on travel and entertainment until he has proven that his methods work. When Ms. Grider resisted, he reminded her that he, not his father, hired her. He also reminded her that she had been enthusiastic about his business plans when she was hired.
Required:
1. Who are the stakeholders in this situation?
2. Should Ms. Grider agree to the change in the Travel and Entertainment account to Property Development? Explain.

Accepted Answer

The answer of Jim Coleman, Jr. was appointed the manager...

Question 7

The journal provides a chronological record of transactions.

Accepted Answer

A) True 
 B)False

Question 8

Customarily, a trial balance is prepared

Accepted Answer

A)  at the end of each day. 
B)  after each journal entry is posted. 
C)  at the end of an accounting period. 
D)  only at the inception of the business.

Question 9

When a company pays dividends

Accepted Answer

A)  the dividend doesn't have to be cash, it could be another asset. 
B)  the dividends account will be increased with a credit. 
C)  the retained earnings account will be directly increased with a debit. 
D)  the dividends account will be decreased with a debit.

Question 10

A journal is also known as a book of original entry.

Accepted Answer

A) True 
 B)False

Question 11

The double-entry system requires that each transaction must be recorded

Accepted Answer

A)  in at least two different accounts. 
B)  in two sets of books. 
C)  in a journal and in a ledger. 
D)  first as a revenue and then as an expense.

Question 12

Which of the following is not true of the terms debit and credit?

Accepted Answer

A)  They can be abbreviated as Dr. and Cr. 
B)  They can be interpreted to mean increase and decrease. 
C)  They can be used to describe the balance of an account. 
D)  They can be interpreted to mean left and right.

Question 13

An accounting record of the balances of all assets, liabilities, and equity accounts is called

Accepted Answer

A)  compound entry. 
B)  general journal. 
C)  general ledger. 
D)  chart of accounts.

Question 14

An account consists of

Accepted Answer

A)  a title, a debit balance, and a credit balance. 
B)  a title, a left side, and a debit balance. 
C)  a title, a debit side, and a credit side. 
D)  a title, a right side, and a debit balance.

Question 15

The usual sequence of steps in the transaction recording process is:

Accepted Answer

A)  journal $\rightarrow$ analyze $\rightarrow$ ledger. 
B)  analyze $\rightarrow$ journal $\rightarrow$ ledger. 
C)  journal $\rightarrow$ledger $\rightarrow$ analyze. 
D)  ledger $\rightarrow$ journal $\rightarrow$analyze.

Question 16

The chart of accounts used by Ming Copy Company is listed below. You are to indicate the proper accounts to be debited and credited for the following transactions by writing the account number(s) in the appropriate boxes.
CHART OF ACCOUNTS 
 -------------------------------------------  -------------------------------------------

Accepted Answer

The answer of The chart of accounts used by Ming...

Question 17

For each of the following transactions of Chen Inc., identify the account to be debited and the account to be credited.
1. Purchased 18-month insurance policy for cash.
2. Paid weekly payroll.
3. Purchased supplies on account.
4. Received utility bill to be paid at later date.

Accepted Answer

The answer of For each of the following transactions of...

Question 18

If a revenue account is credited, the revenue account is increased.

Accepted Answer

A) True 
 B)False

Question 19

Omega Company pays its employees twice a month, on the 7th and the 21st. On June 21, Omega Company paid employee salaries of $4,000. This transaction would

Accepted Answer

A)  increase equity by $4,000. 
B)  decrease the balance in Salaries and Wages Expense by $4,000. 
C)  decrease net income for the month by $4,000. 
D)  be recorded by a $4,000 debit to Salaries and Wages Payable and a $4,000 credit to Salaries and Wages Expense.

Question 20

The trial balance

Accepted Answer

A)  is a listing of all the accounts and their balances in the order the accounts appear on the statement of financial position. 
B)  has as its primary purpose to prove (check) that all journal entries were made for the period. 
C)  can be used to uncover errors in journalizing and posting. 
D)  is used to prepare the statement of financial position while the general ledger is used to prepare the income statement.

Exam 2: The Recording Process

At June 1, 2014, Estrada Industries had an accounts receivable balance of ₤12,000. During the month, the company performed credit services of ₤30,000 and collected accounts receivable of ₤32,000. What is the balance in accounts receivable at June 30, 2014?

Transactions in a journal are initially recorded in

An accounting convention is best described as

The Dividends account

The double-entry system is a logical method for recording transactions and results in equal debits and credits for each transaction.

The journal provides a chronological record of transactions.

Customarily, a trial balance is prepared

When a company pays dividends

A journal is also known as a book of original entry.

The double-entry system requires that each transaction must be recorded

Which of the following is not true of the terms debit and credit?

An accounting record of the balances of all assets, liabilities, and equity accounts is called

An account consists of

The usual sequence of steps in the transaction recording process is:

For each of the following transactions of Chen Inc., identify the account to be debited and the account to be credited. 1. Purchased 18-month insurance policy for cash. 2. Paid weekly payroll. 3. Purchased supplies on account. 4. Received utility bill to be paid at later date.

If a revenue account is credited, the revenue account is increased.

Omega Company pays its employees twice a month, on the 7^th and the 21^st. On June 21, Omega Company paid employee salaries of $4,000. This transaction would

The trial balance