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The third step in the analyzing and recording process is to record each transaction chronologically in a________.

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The general journal is a collection of all accounts and their balances.

A) True
B) False

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A law firm collected $1,800 in advance for work to be performed in three months. Which of the following general journal entries will the firm make to record this transaction?


A) Debit Accounts Receivable, $1,800; credit Unearned Legal Fees Revenue, $1,800.
B) Debit Cash, $1,800; credit Unearned Legal Fees Revenue, $1,800.
C) Debit Legal Fees Revenue, $1,800; credit Accounts Receivable, $1,800.
D) Debit Accounts Receivable, $1,800; credit Legal Fees Revenue, $1,800.
E) Debit Cash, $1,800; credit Accounts Receivable, $1,800.

F) A) and E)
G) A) and D)

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Silvia's Studio provided $150 of dance instruction and rented out its dance studio to the same client for another $100. The client paid cash immediately. Identify the general journal entry below that Silvia's Studio will make to record the transaction.


A)  Rental Revenue 100 Instruction Revenue 150 Cash 250\begin{array} { | l | r | r | } \hline \text { Rental Revenue } & 100 \\\hline \text { Instruction Revenue } & 150 & \\\hline \text { Cash } & & 250 \\\hline\end{array}
B)  Accounts Payable 250 Rental Revenue 100 Instruction Revenue 150\begin{array}{|l|l|l|}\hline \text { Accounts Payable } & 250 & \\\hline \text { Rental Revenue } & & 100 \\\hline \text { Instruction Revenue } & & 150 \\\hline\end{array}
C)  Cash 250 Rental Reverue 100 Irstruction Reverue 150\begin{array} { | l | r | r | } \hline \text { Cash } & 250 & \\\hline \text { Rental Reverue } & & 100 \\\hline \text { Irstruction Reverue } & & 150\\\hline \end{array}
D)  Rental Reverue 100 Irstruction Reverue 150 Accourits Receivable 250\begin{array} { | l | r | r | } \hline \text { Rental Reverue } & 100 \\\hline \text { Irstruction Reverue } & 150 & \\\hline \text { Accourits Receivable } & & 250\\\hline \end{array}
E)  Unearned Revenue 250 Rental Revenue 100 Instruction Revenue 150\begin{array}{|l|r|r|}\hline \text { Unearned Revenue } & 250 & \\\hline \text { Rental Revenue } & & 100 \\\hline \text { Instruction Revenue } & & 150 \\\hline\end{array}

F) A) and B)
G) C) and D)

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A business's source documents:


A) Include the ledger.
B) Provide objective evidence that a transaction has taken place.
C) Must be in electronic form.
D) Are records of all increases and decreases in specific asset.
E) Include the chart of accounts.

F) C) and D)
G) None of the above

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JBL Company sends a $2,500 bill to a customer for services it provided during the month. Set up the necessary T-accounts below and show how this transaction would be recorded directly in those accounts. JBL Company sends a $2,500 bill to a customer for services it provided during the month. Set up the necessary T-accounts below and show how this transaction would be recorded directly in those accounts.

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Victor Services had the following assets and liabilities at the beginning and end of the current year:  Assets  Liabilities  Beginning of the year $114,000$68,000 End of the year 135,00073,000\begin{array} { l l l } & \text { Assets } & \text { Liabilities } \\\text { Beginning of the year } & \$ 114,000 & \$ 68,000 \\\text { End of the year } & 135,000 & 73,000\end{array} If $12,000 of common stock was issued during the year, but no dividends were paid during the year, what was the amount of net income earned by Victor Services?

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Beginning equity = $114,000 - $68,000 = ...

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Web Consulting received $3,000 from a customer for services provided. The general journal entry to record this transaction will be:


A) Debit Services Revenue, credit Accounts Receivable.
B) Debit Cash, credit Accounts Payable.
C) Debit Cash, credit Accounts Receivable.
D) Debit Cash, credit Services Revenue.
E) Debit Accounts Payable, credit Services Revenue.

F) C) and E)
G) C) and D)

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At a given point in time, a trial balance is a list of all ledger accounts and their balances.

A) True
B) False

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A company provided $12,000 of consulting services on account. The customer promises payment in 30 days. Identify the journal entry below that properly records this transaction.


A)  Accounts Payable 12,000 Cash 12,000\begin{array}{|l|r|r|}\hline \text { Accounts Payable } & 12,000 & \\\hline \text { Cash } & & 12,000 \\\hline\end{array}
B)  Cash 12,000 Consulting Services Revenue 12,000\begin{array}{|l|r|r|}\hline \text { Cash } & 12,000 & \\\hline \text { Consulting Services Revenue } & & 12,000 \\\hline\end{array}
C)  Consulting Services Revenue 12,000 Cash 12,000\begin{array}{|l|r|r|}\hline \text { Consulting Services Revenue } & 12,000 & \\\hline \text { Cash } & & 12,000 \\\hline\end{array}
D)  Accounts Payable 12,000 Consulting Services Revenue 12,000\begin{array}{|l|r|l|}\hline \text { Accounts Payable } & 12,000 \\\hline \text { Consulting Services Revenue } && 12,000 \\\hline\end{array}
E)  Accounts Receivable 12,000 Consulting Services Revenue 12,000\begin{array}{|l|r|l|}\hline \text { Accounts Receivable } & 12,000 & \\\hline \text { Consulting Services Revenue } & & 12,000 \\\hline\end{array}

F) A) and D)
G) A) and C)

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The following trial balance is prepared from the general ledger of HG's Auto Maintenance. The following trial balance is prepared from the general ledger of HG's Auto Maintenance. Because 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 a stockholder 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 Shop Equipment account. 6. One entire entry was not posted to the general ledger. The transaction involved the receipt of $125 cash for repair services performed for cash. Prepare a corrected trial balance for the HG's Auto Maintenance as of October 31. Because 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 a stockholder 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 Shop Equipment account. 6. One entire entry was not posted to the general ledger. The transaction involved the receipt of $125 cash for repair services performed for cash. Prepare a corrected trial balance for the HG's Auto Maintenance as of October 31.

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HG'S AUTO MAINTENANCE
Trial Balance
Octo...

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A debit:


A) Always increases an account.
B) Is the right-hand side of a T-account.
C) Always decreases an account.
D) Is the left-hand side of a T-account.
E) Always increases liability accounts.

F) B) and E)
G) D) and E)

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If cash was incorrectly debited for $100 instead of correctly debiting accounts receivable for $100, assuming no other errors, the trial balance will balance.

A) True
B) False

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On May 31, the Cash account of Tesla had a normal balance of $5,000. During May, the account was debited for a total of $12,200 and credited for a total of $11,500. What was the balance in the Cash account at the beginning of May?


A) A $0 balance.
B) A $4,300 debit balance.
C) A $4,300 credit balance.
D) A $5,700 debit balance.
E) A $5,700 credit balance.

F) A) and B)
G) B) and C)

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Select the account below that normally has a credit balance.


A) Cash.
B) Office Equipment.
C) Wages Payable.
D) Dividends.
E) Sales Salaries Expense.

F) A) and E)
G) C) and D)

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The detail of individual revenue and expense accounts is reported on the balance sheet.

A) True
B) False

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An income statement reports revenues earned minus expenses incurred over a period of time.

A) True
B) False

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

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The debt ratio is calculated by dividing...

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Transactions are recorded first in the ledger and then transferred to the journal.

A) True
B) False

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The balance sheet reports the financial position of a company at a point in time.

A) True
B) False

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