FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 2: Accounting for Transactions

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 1

Multiple Choice

Review LaterAdd Note

Review Later

The credit purchase of a delivery truck for $4,700 was posted to Delivery Trucks as a $4,700 debit and to Accounts Payable as a $4,700 debit. What effect would this error have on the trial balance?

A) The total of the Debit column of the trial balance will exceed the total of the Credit column by $4,700.
B) The total of the Credit column of the trial balance will exceed the total of the Debit column by $4,700.
C) The total of the Debit column of the trial balance will exceed the total of the Credit column by $9,400.
D) The total of the Credit column of the trial balance will exceed the total of the Debit column by $9,400.
E) The total of the Debit column of the trial balance will equal the total of the Credit column.

Correct Answer

verified

Show Answer

Question 2

Essay

Review LaterAdd Note

Review Later

On February 5, Textron Stores purchased a van that had a cost of $35,000. The firm made a down payment of $5,000 cash and signed a long-term note payable for the balance. Show the general journal entry to record this transaction.

Correct Answer

verified

Show Answer

Question 3

Multiple Choice

Review LaterAdd Note

Jones Hardware, Inc. paid a cash dividend of $6,000. What is the necessary entry to record this transaction?

If cash was incorrectly debited for $100 instead of correctly credited for $100, the cash account is out of balance by $100.

Which of the following statements is correct?

Which of the following statements is correct?

The chart of accounts is a list of all the accounts used by a company and a corresponding identification number.

Describe source documents and their purpose.

A journal gives a complete record of each transaction in one place and shows the debits and credits for each transaction.

Another name for the balance sheet is the statement of financial position.

For each of the following errors, indicate on the table below the amount by which the trial balance will be out of balance and which trial balance column (debit or credit) will have the larger total as a result of the error. a. $100 debit to Cash was debited to the Cash account twice. b. $1,900 credit to Sales was posted as a $190 credit. c. $5,000 debit to Office Equipment was debited to Office Supplies. d. $625 debit to Prepaid Insurance was posted as a $62.50 debit. e. $520 credit to Accounts Payable was not posted. $\begin{array}{|c|c|c|}\hline \text { Error } & \begin{array}{c}\text { Amount Out of } \\\text { Balance }\end{array} & \begin{array}{c}\text { Column Having } \\\text { Larger Total }\end{array} \\\hline \text { a. } & & \\\hline \text { b. } & & \\\hline \text { c. } & & \\\hline \text { d. } & & \\\hline \text { e. } & & \\\hline\end{array}$

A liability created by the receipt of cash from customers in payment for products or services that have not yet been delivered to the customers is:

A company had total assets of $350,000; total liabilities of $101,500; and total equity of $248,500. Calculate its debt ratio.

Explain the debt ratio and its use in analyzing a company's financial condition.

The process of transferring general journal information to the ledger is:

The following trial balance was prepared from the general ledger of Hal's Auto Repair. Since the trial balance did not balance, you decided to examine the accounting records. You found that the following errors had been made: 1. A purchase of supplies on account for $245 was posted as a debit to Supplies and as a debit to Accounts Payable. 2. An investment of $500 cash by the owner was debited to Common Stock and credited to Cash. 3. In computing the balance of the Accounts Receivable account, a debit of $600 was omitted from the computation. 4. One debit of $300 to the Dividends account was posted as a credit. 5. Office equipment purchased for $800 was posted to the Repair Equipment account. 6. One entire entry was not posted to the general ledger. The transaction involved the receipt of $125 cash at the time repair services were performed. Prepare a corrected trial balance for the Hal's Auto Repair as of October 31.

Identify each of the following accounts as a revenue (R), expense (E), asset (A), liability, (L) or equity (OE) by placing initials (R, E, A, L, or OE) in the blanks.

The dividends account normally has a credit balance since it is an equity account.

An account is a record of increases and decreases in a specific asset, liability, equity, revenue, or expense item.

On October 1, 2011, Smith invested $20,000 cash, office equipment costing $15,000, and drafting equipment costing $12,000 into the company in exchange for common stock. Show the general journal entry to record this transaction.