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Exam 13: The Double-Entry Accounting System

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Question 71

Multiple Choice

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Which of the following is a (are) permanent account(s) ?

A) The Retained Earnings account
B) All income statement accounts
C) The Dividend account
D) All balance sheet accounts and the Dividends account

E) A) and B)
F) B) and C)

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Question 72

Multiple Choice

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The following is a trial balance of Barnhart Company as December 31, Year 1: What is the total amount of assets that will be reported on the balance sheet prepared as of December 31, Year 1?

A) $16,500.
B) $22,650.
C) $13,000.
D) $24,450.

E) A) and B)
F) All of the above

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Question 73

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A company's general ledger provides a chronological record of its business transactions.

Indicate how each event affects the financial statements. Use the following letters to record your answer in the box shown below. If an event increases one account and decreases another account equally within the same element, record I/D. If an event has no impact on the element, record NA. You do not need to enter amounts. Increase = I Decrease = DNot Affected = NA A transaction recorded as a debit to Accounts Receivable and a credit to a revenue account.

Which of the following statements is true regarding the trial balance?

Which of the following elements is increased with a debit?

Journals are sometimes called books of original entry because transactions are recorded in journals before amounts are entered into the ledger.

The following pre-closing accounts and balances were drawn from the records of Carolina Company on December 31, Year 1: The amount of Carolina's retained earnings on December 31, Year 1 was:

Peterson Corporation recorded an adjusting entry using T-accounts as follows: Which of the following reflects how this adjustment affects the company's financial statements?

Cornelius Company purchased supplies on account. What account is credited?

Assume that a company recorded the following journal entry: with regards to the impact of this journal entry. a)_____ Cash decreasesb)_____ Total assets decreasec)_____ Liabilities decreased)_____ Cash flows from operating activities increasee)_____ Net income decreases

The following is a list of all of the account balances for the Jepson Corporation immediately prior to closing the books on December 31, Year 1: Required:Prepare an adjusted trial balance dated December 31, Year 1.

The Dividends account normally has a credit balance.

Stuart Corporation entered into the following transactions during the year ending December 31, Year 1: 1)Performed services for $26,000 cash2)Purchased $800 of supplies on account3)Purchased land for $95,000 cash4)Paid salary expense of $16,5005)Paid for $600 of the supplies purchased in event (2)6)Collected $15,000 in advance for services to be provided over the next 12 months7)Recognized $10,000 of revenue on the contract from event (6)8)Owed $5,500 of salaries expenses to employees for work done during December, Year 1, that will be paid during January, Year 2. Required:Prepare the journal entries for these transactions and adjustments using the general journal format.

Manhattan Company recorded an adjusting entry to accrue interest owed of $300 as of December 31, Year 1. When the related note was paid during Year 2, the company paid $450 in interest. Which of the following journal entries correctly records this Year 2 transaction? (Assume that the entry to record the payment of the note itself was recorded in a separate journal entry.)

During a company's first year of operations, the asset account, Office Supplies, was debited for $2,300 for the purchases of supplies. At year-end, a physical count of the supplies on hand revealed that $825 of unused supplies were available for future use. How will the related adjusting entry affect the company's financial statements?

A transaction has been recorded in the general journal of Deluty Company as follows: Which of the following describes the effect of this transaction on the company's financial statements?

Indicate how each event affects the financial statements. Use the following letters to record your answer in the box shown below. If an event increases one account and decreases another account equally within the same element, record I/D. If an event has no impact on the element, record NA. You do not need to enter amounts. Increase = I Decrease = DNot Affected = NA An adjusting entry recorded as a debit to Uncollectible Accounts Expense and a credit to Allowance for Doubtful Accounts.

On August 1, Year 1, Bellisa Company issued a $46,000 6%, 5-year note to Citizens Bank. Which of the following entries reflects the adjustment required as of December 31, Year 1?

Indicate how each event affects the financial statements. Use the following letters to record your answer in the box shown below. If an event increases one account and decreases another account equally within the same element, record I/D. If an event has no impact on the element, record NA. You do not need to enter amounts. Increase = I Decrease = DNot Affected = NA A transaction recorded as a debit to Dividends and a credit to Cash.