Question 1

Forrester Company signed a two-year lease on July 1 and paid the $17,400 total rent in advance. Forrester recorded the transaction as a debit to Prepaid Rent and a credit to Cash.
What adjusting entry should Forrester make on December 31 (no previous adjustment has been made)?

Accepted Answer

A)  Prepaid Rent 13,050
Rent Expense 13,050 
B)  Prepaid Rent 4,350
Rent Expense 4,350 
C)  Rent Expense 8,700
Prepaid Rent 8,700 
D)  Rent Expense 4,350
Prepaid Rent 4,350 
E)  None of the above

Question 2

Best Graphics has the following accounts in its general ledger: Cash; Accounts Receivable; Supplies; Office Equipment; Accounts Payable; Common Stock; Dividends; Service Fees Earned; Rent Expense; and Salaries Expense. Prepare general journal entries to record the following transactions:

Accepted Answer

The answer of Best Graphics has the following accounts in...

Question 3

Transactions are first recorded in a journal and then posted to the general ledger.

Accepted Answer

A) True 
 B)False

Question 4

Likert Company calculates that interest of $900 has accrued at December 31 on outstanding notes payable. How should Likert record this on December 31?

Accepted Answer

A)  Prepaid Interest 900
Interest Expense 900 
B)  Interest Expense 900
Interest Payable 900 
C)  Interest Expense 900
Cash 900 
D)  Interest Payable 900
Interest Expense 900 
E)  None of the above

Question 5

One reason for preparing a trial balance is to determine if the debits and credits in the general ledger are equal.

Accepted Answer

A) True 
 B)False

Question 6

Debits to which accounts result in an increased balance?

Accepted Answer

A)  Assets and common stock 
B)  Revenues and assets 
C)  Common stock and expenses 
D)  Assets and expenses 
E)  Liabilities and expenses

Question 7

Match each of the numbered transactions of a corporation with Effect of Transaction indicating the debits and credits to be made (give the debit first)
-Received and immediately paid repair bill.

Accepted Answer

A)  Debit an asset 
B)  Credit an asset 
C)  Debit a liability 
D)  Credit a liability 
E)  Debit common stock
F) Credit common stock
G) Debit dividends
H) Credit dividends
I) Debit revenue
J) Credit revenue
K) Debit expense
L) Credit expense

Question 8

At the end of the accounting period, the Legal Fees Earned account has a normal balance of $75,000. The accountant makes two adjustments--one to accrue unbilled legal fees earned of $2,500, and the other to reduce the Unearned Legal Fees liability account by $500.
After the adjustments are posted, the Legal Fees Earned account has a balance of

Accepted Answer

A)  $77,500 
B)  $78,000 
C)  $81,500 
D)  $82,500 
E)  None of the above

Exam 13: Appendix A: The Language of Accountants: Debits and Credits

Forrester Company signed a two-year lease on July 1 and paid the $17,400 total rent in advance. Forrester recorded the transaction as a debit to Prepaid Rent and a credit to Cash. What adjusting entry should Forrester make on December 31 (no previous adjustment has been made) ?

Best Graphics has the following accounts in its general ledger: Cash; Accounts Receivable; Supplies; Office Equipment; Accounts Payable; Common Stock; Dividends; Service Fees Earned; Rent Expense; and Salaries Expense. Prepare general journal entries to record the following transactions:

Transactions are first recorded in a journal and then posted to the general ledger.

Likert Company calculates that interest of $900 has accrued at December 31 on outstanding notes payable. How should Likert record this on December 31?

One reason for preparing a trial balance is to determine if the debits and credits in the general ledger are equal.

Debits to which accounts result in an increased balance?

Match each of the numbered transactions of a corporation with Effect of Transaction indicating the debits and credits to be made (give the debit first) -Received and immediately paid repair bill.