Chapter 2 MCQ

The following transactions occurred during July: Received $1,070 cash for services provided to a customer during July. Collected $5,400 cash for services previously completed in June. Received $920 from a customer in partial payment of his account receivable which arose from sales in June. Provided services to a customer on credit, $545. Borrowed $7,700 from the bank by signing a promissory note. Received $1,420 cash from a customer for services to be performed next year. What was the amount of revenue for July?

$1,615.

A company opened on January 1 of the current year. During January, the following transactions occurred and were recorded in the company's books: The company received $13,800 cash for services provided. The company paid $2,400 cash for an insurance policy covering the next 24 months. The company received $6,000 cash for services provided. The company purchased $6,500 of office equipment on credit. The company provided $3,050 of services to customers on account. The company paid cash of $1,800 for monthly rent. The company paid $3,400 on the office equipment purchased in transaction #5 above. Paid $305 cash for January utilities. Based on this information, the balance in the cash account at the end of January would be:

$11,895.

During March, the following transactions occurred: The company paid $2,800 cash to rent office space for the month of March. The company received $24,000 cash for repair services provided during March. The company paid $7,000 for salaries for the month of March. The company provided $3,800 of services to customers on account. The company paid cash of $1,300 for utilities for the month of March. The company received $3,900 cash in advance from a customer for repair services to be provided in April. The company purchased $5,800 of land for cash. Based on this information, net income for March would be:

$16,700.

A $21 credit to Revenue was posted as a $210 credit. By what amount is the Revenue account in error?

$189 overstated.

At the end of its first month of operations, a company reported Revenue of $40,600. It also reported Wages Expense, $7,200; Rent Expense, $6,200; and Utilities Expense, $1,600. Calculate net income reported on the income statement at month-end.

$25,600

Marco Nelson opened a frame shop and completed these transactions: Sold custom frames and immediately collected $40,600 cash for the sale. Purchased $130 of office supplies on credit. Paid $1,800 cash for the receptionist's salary. Sold a custom frame service and collected $5,100 cash on the sale. Completed framing services and billed the client $260. What was the balance of the cash account after these transactions were posted?

$43,900.

On April 30, Gomez Services had an Accounts Receivable balance of $23,500. During the month of May, total credits to Accounts Receivable were $58,000 from customer payments. The May 31 Accounts Receivable balance was $18,000. What was the amount of credit sales during May?

$52,500.

A company had the following accounts and amounts on December 31. Using this information, compute total assets for the company. Cash $ 18,400 Total equity 37,200 Accounts receivable 16,900 Services revenue 39,400 Equipment 22,900 Rent expense 9,400 Accounts payable 12,400 Wages expense 21,400

$58,200.

A company had the following accounts and balances at December 31: Account Debits: Cash $ 10,900; Accounts Receivable 2,180; Prepaid Insurance 2,760; Supplies 1,180 Credits: Accounts Payable $ 5,450; Total Equity 5,440; Service Revenue 7,900; Salaries Expense 590; Utilities Expense 1,180; Total Debit: $18,790 Total Credit: $18,790 Using the information in the table, calculate the company's reported net income for the period.

$6,130.

At the beginning of January of the current year, Sorrel Company's ledger reflected a normal balance of $66,000 for accounts receivable. During January, the company collected $17,600 from customers on account and provided additional services to customers on account totaling $13,900. Additionally, during January one customer paid Mikey $6,400 for services to be provided in the future. At the end of January, the balance in the accounts receivable account should be:

$62,300.

During the month of February, Rubio Services had cash receipts of $9,100 and cash payments of $11,800. The February 28 cash balance was $5,000. What was the February 1 beginning cash balance?

$7,700.

During the month of March, Harley's Computer Services made purchases on account totaling $44,300. Also, during the month of March, Harley was paid $9,200 by a customer for services to be provided in the future and paid $37,300 of cash on its accounts payable balance. If the balance in the accounts payable account at the beginning of March was $77,700, what is the balance in accounts payable at the end of March?

$84,700.

Sanders Company has total assets of $401 million. Its total liabilities are $108.1 million, and its equity is $292.9 million. Calculate its debt ratio. (Round your answer to 1 decimal place.)

27.0%

Jennings Company has total assets of $455 million. Its total liabilities are $125.5 million. Its equity is $329.5 million. Calculate the debt ratio. (Round your answer to 1 decimal place.)

27.6%.

At the beginning of the current year, Snell Company's total assets were $251,600 and its total liabilities were $172,400. During the year, the company reported total revenues of $93,000 and total expenses of $81,000. There were no other changes in total equity during the year, and total assets at the end of the year were $263,600. The company's debt ratio at the end of the current year is:

65.4%.

At the end of the current year, James Company reported total liabilities of $308,000 and total equity of $108,000. The company's debt ratio was:

74.0%.

Identify which error will cause the trial balance to be out of balance. - A $390 cash salary payment posted as a $390 debit to Cash and a $390 credit to Salaries Expense. - A $290 cash receipt from a customer in payment of her account posted as a $290 debit to Cash and a $29 credit to Accounts Receivable. - A $170 cash receipt from a customer in payment of her account posted as a $170 debit to Cash and a $170 credit to Cash. - A $107 cash purchase of office supplies posted as a $107 debit to Office Equipment and a $107 credit to Cash. - An $1,750 prepayment from a customer for services to be rendered in the future was posted as an $1,750 debit to Unearned Revenue and an $1,750 credit to Cash.

A $290 cash receipt from a customer in payment of her account posted as a $290 debit to Cash and a $29 credit to Accounts Receivable.

On May 31, the Cash account of Tesla had a normal balance of $6,100. During May, the account was debited for a total of $13,300 and credited for a total of $12,600. What was the balance in the Cash account at the beginning of May?

A $5,400 debit balance.

On January 1 of the current year, Jimmy's Sandwich Company reported total equity of $128,000. During the current year, total revenues were $106,000, while total expenses were $115,500. No other changes in equity occurred during the year. The change in total equity during the year was:

A decrease of $9,500.

GreenLawn Company provides landscaping services to clients. On May 1, a customer paid GreenLawn $63,000 for 6-months services in advance. GreenLawn's general journal entry to record this transaction will include a:

Credit to Unearned Revenue for $63,000.

A law firm billed a client $3,700 for work performed in the current month. Which of the following general journal entries will the firm make to record this transaction?

Debit Accounts Receivable, $3,700; credit Services Revenue, $3,700.

Alicia Tax Services paid $690 to settle an account payable. Which of the following general journal entries will Alicia Tax Services make to record this transaction?

Debit Accounts payable, $690; credit Cash, $690.

A company receives $9,700 cash for performing landscaping services. Which of the following general journal entries will the company make to record this transaction?

Debit Cash $9,700; credit Landscaping Revenue, $9,700.

Ted Catering received $1,040 cash in advance from a customer for catering services to be provided in three months. Determine the general journal entry that Ted Catering will make to record the cash receipt.

Debit Cash , $1,040; credit Unearned Revenue, $1,040.

Adriana Graphic Design receives $1,600 from a client billed in a previous month for services provided. Which of the following general journal entries will Adriana Graphic Design make to record this transaction?

Debit Cash , $1,600; credit Accounts Receivable, $1,600.

Sara's Studio provided $320 of dance instruction and rented out its dance studio to the same client for another $185. The client paid cash immediately. Identify the general journal entry below that Sara's Studio will make to record the transaction.

Debit Cash , $505; credits: Rental Revenue, $185, Instruction Revenue, $320

Russell Company collected cash of $880 immediately after providing consulting services to a client. Which of the following general journal entries will Russell Company make to record this transaction?

Debit Cash , $880; credit Consulting Revenue, $880.

A law firm collected $2,800 on account for work performed and billed in the previous month. Which of the following general journal entries will the firm make to record this collection of cash?

Debit Cash, $2,800; credit Accounts Receivable, $2,800.

A law firm collected $3,200 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?

Debit Cash, $3,200; credit Unearned Revenue, $3,200.

Green Cleaning purchased $530 of office supplies on credit. The company's policy is to initially record prepaid and unearned items in balance sheet accounts. Which of the following general journal entries will Green Cleaning make to record this transaction?

Debit Office supplies, $530; credit Accounts payable, $530.

A company purchased $1,400 of supplies on credit. Identify the general journal entry below that the company will make to record the transaction.

Debit Supplies , $1,400; credit Accounts Payable, $1,400.

A company purchased $22,100 of supplies on credit. The journal entry to record this transaction consists of a:

Debit Supplies for $22,100; credit Accounts Payable for $22,100.

Specter Consulting purchased $8,500 of supplies and paid cash immediately. Which of the following general journal entries will Specter Consulting make to record this transaction?

Debit Supplies, $8,500; credit Cash, $8,500.

A company paid $300 cash for this month's utilities. Identify the general journal entry below that the company will make to record the transaction.

Debit Utilities Expenses , $300; credit Cash, $300.

Jose Consulting paid $960 cash for utilities for the current month. Determine the general journal entry that Jose Consulting will make to record this transaction.

Debit Utilities expense, $960; credit Cash, $960.

A bookkeeper has debited an asset account for $4,500 and credited a liability account for $2,500. Which of the following would be an incorrect way to complete the recording of this transaction:

Debit another asset account for $2,000.

Edison Consulting received a $410 utilities bill and immediately paid it. Edison's general journal entry to record this transaction will include a:

Debit to Utilities Expense for $410.

A $330 credit to Supplies was credited to Revenue by mistake. By what amounts are the accounts under- or overstated as a result of this error?

Supplies, overstated $330; Revenue, overstated $330.

At year-end, a trial balance showed total credits exceeding total debits by $5,550. This difference could have been caused by:

The balance of $6,220 in the Office Equipment account being mistakenly entered on the trial balance as a debit of $670.

Identify the item below that would cause the trial balance to not balance? - A $1,240 collection of an account receivable was erroneously posted as a debit to Accounts Receivable and a credit to Cash. - The purchase of office supplies on account for $3,255 was erroneously recorded in the journal as $2,355 debit to Office Supplies and $2,355 credit to Accounts Payable. - A $170 cash receipt for the performance of a service was not recorded at all. - The purchase of office equipment for $1,800 was posted as a debit to Office Supplies and a credit to Cash for $1,800. - The cash payment of a $990 account payable was posted as a debit to Accounts Payable and a debit to Cash for $990.

The cash payment of a $990 account payable was posted as a debit to Accounts Payable and a debit to Cash for $990.

The credit purchase of a new oven for $5,300 was posted to Kitchen Equipment as a $5,300 debit and to Accounts Payable as a $5,300 debit. What effect would this error have on the trial balance?

The total of the Debit column of the trial balance will exceed the total of the Credit column by $10,600.