Question 1

McMann Company has a condensed income statement as shown::
$\begin{array}{|l|l|l|}
\hline & \mathbf{2 0 1 4} & \mathbf{2 0 1 3} \
\hline \text { Sales } & \$ 198,000 & \$ 165,500 \
\hline \text { Total operating expenses } & 163,000 & 147,500 \
\hline \text { Net income } & 35,000 & 18,000 \
\hline
\end{array}$
Using horizontal analysis,calculate the amount and percent change for Sales.Round to one decimal place.

Accepted Answer

A) $32,500,19.6% 
B) $18,000,10.9% 
C) $35,000,17.7% 
D) $17,000,9.4%

Question 2

On November 30th,it was discovered that a $550 of a transaction recording the purchase of office supplies was really office equipment.Prepare the journal entry to correct this situation.

Accepted Answer

The answer of On November 30th,it was discovered that a...

Question 3

Which of the following accounts is a stockholders' equity account?

Accepted Answer

A) Cash 
B) Accounts Payable 
C) Prepaid Insurance 
D) Dividends

Question 4

Journalizing transactions using the double-entry bookkeeping system will eliminate fraud.

Accepted Answer

A) True 
 B)False

Question 5

On August 30th JumpStart pays numerous bills which include:
Payment to the landlord for August rent - $2,300
Payment to the Gas & Electric Company for August's bill - $525
Payment of employee wages for the last half of August - $1,750
Payment of shopping center's parking lot cleaning fee - $275
Journalize these payments as one compound journal entry.

Accepted Answer

The answer of On August 30th JumpStart pays numerous bills...

Question 6

(a) On October 10th,Nikle Company purchased supplies worth $1,800 on account.Prepare the journal entry to record this transaction.
(b) Nikle Company paid for the supplies purchased in (a)on October 25th.Prepare the journal entry to record this transaction.

Accepted Answer

The answer of (a) On October 10th,Nikle Company purchased supplies...

Question 7

On January 1,2011,Cary Parsons established Cary's Catering Service.Listed below are accounts to use for transactions (a)through (e),each identified by a number.Following this list are the transactions that occurred during the first month of operations.You are to indicate for each transaction the accounts that should be debited and credited by placing the account number(s)in the appropriate box.

Accepted Answer

The answer of On January 1,2011,Cary Parsons established Cary's Catering...

Question 8

A credit balance in which of the following accounts would indicate a likely error?

Accepted Answer

A) Fees Earned 
B) Salary Expense 
C) Retained Earnings 
D) Accounts Payable

Question 9

What effect does this journal entry have on the accounts?

Accepted Answer

A) Increase to Cash and increase to Land 
B) Increase to Land and decrease to Cash 
C) Decrease to Cash and decrease to Land 
D) Increase to Cash and decrease to Land

Question 10

Journalizing eliminates fraud.

Accepted Answer

A) True 
 B)False

Question 11

Several transactions are listed below,with the accounting equation stated to the right side of each.Use the following identification codes to indicate the effects of each transaction on the accounting equation.Write your answers in the space provided under the accounting equation.You need an identification code for each element of the accounting equation.An example is given before the first transaction.

Accepted Answer

The answer of Several transactions are listed below,with the accounting...

Question 12

Which of the following errors will cause the trial balance totals to be unequal?

Accepted Answer

A) posting the debit portion of a journal entry incorrectly when the credit portion of the entry is correctly posted 
B) failure to record a transaction or to post a transaction 
C) recording the same transaction more than once 
D) recording the same erroneous amount for both the debit and the credit parts of a transaction

Question 13

The recording of cash payments from the cash account is done by entering the amount as a credit.

Accepted Answer

A) True 
 B)False

Question 14

Exhibit 2-1
All nine transactions for Ralston Sports Co.for September 2011,the first month of operations,are recorded in the following T accounts:

Refer to Exhibit 2-1.Prepare a trial balance,listing the accounts in their proper order.

Accepted Answer

The answer of Exhibit 2-1
All nine transactions for Ralston Sports...

Question 15

Posting a transaction twice will cause the trial balance totals to be equal.

Accepted Answer

A) True 
 B)False

Question 16

Transactions are initially entered into a record called a journal.

Accepted Answer

A) True 
 B)False

Question 17

A trial balance determines the accuracy of the numbers.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following will increase retained earnings?

Accepted Answer

A) Expenses > revenues. 
B) Dividends are declared and paid. 
C) Revenues > expenses. 
D) Cash is received from customers on account.

Question 19

Dividends decrease retained earnings and are listed on the income statement as a deduction from revenue.

Accepted Answer

A) True 
 B)False

Question 20

What effect does this journal entry have on the accounts?

Accepted Answer

A) Decrease accounts payable,increase cash 
B) Increase cash,decrease accounts payable 
C) Increase accounts payable,increase cash 
D) Decrease accounts payable,decrease cash

Exam 2: Analyzing Transactions

On November 30th,it was discovered that a $550 of a transaction recording the purchase of office supplies was really office equipment.Prepare the journal entry to correct this situation.

Which of the following accounts is a stockholders' equity account?

Journalizing transactions using the double-entry bookkeeping system will eliminate fraud.

(a) On October 10th,Nikle Company purchased supplies worth $1,800 on account.Prepare the journal entry to record this transaction. (b) Nikle Company paid for the supplies purchased in (a)on October 25th.Prepare the journal entry to record this transaction.

A credit balance in which of the following accounts would indicate a likely error?

What effect does this journal entry have on the accounts?

Journalizing eliminates fraud.

Which of the following errors will cause the trial balance totals to be unequal?

The recording of cash payments from the cash account is done by entering the amount as a credit.

Exhibit 2-1 All nine transactions for Ralston Sports Co.for September 2011,the first month of operations,are recorded in the following T accounts: Refer to Exhibit 2-1.Prepare a trial balance,listing the accounts in their proper order.

Posting a transaction twice will cause the trial balance totals to be equal.

Transactions are initially entered into a record called a journal.

A trial balance determines the accuracy of the numbers.

Which of the following will increase retained earnings?

Dividends decrease retained earnings and are listed on the income statement as a deduction from revenue.

What effect does this journal entry have on the accounts?