Accounting chpt3

10.The proper sequence used in recording a business transaction​ is:

​analyze, journalize,​ post, record the account​ balance, and complete the reference column in the journal.

What account would be debited if an owner withdraws cash from a business?

Withdrawals

The proper sequence used in recording a business transaction is:

analyze, journalize, post, record the account balance, and complete the reference column in the journal.

The first step of the accounting cycle is:

analyzing business transactions.

The twelve-month period a business chooses for its accounting period is a(n):

fiscal year.

The Trial Balance:

includes all accounts with a ledger balance. includes assets, liabilities, capital, withdrawals, revenues and expenses. ensures that debits equal credits.

The general journal:

is the Book of Original Entry.

When an accountant updates an account balance in a ledger as a result of a transaction, it is called:

posting

If a Trial Balance is not equal, you should first:

re-add the Trial Balance and calculate the difference.

QUIZ 1.The process that begins with recording business transactions and includes the completion of the financial statements is​ the:

ACCOUNTING CYCLE

A company purchases equipment for $15,000 and incorrectly debits Supplies Expense and correctly credits cash. What would be the effect of this mistake?

Assets would be understated and expenses would be overstated The correct entry would be to increase the equipment account with a debit. By debiting an expense account instead of the asset, expenses would be overstated and assets would be understated.

Which of the following would be a correct order of accounts on a trial balance?

Cash, accounts receivable, land, accounts payable, sales, wages

During the month of March, John invested $19,000 in starting his landscaping business. The journal entry would be:

Cash, debit $19,000; John, capital, credit $19,000

A company purchases a computer for $10,000 and pays cash. The accountant records the computer as a $1,000 debit to equipment and a $1,000 credit to cash but has not yet posted it to the general ledger. To correct this mistake, the accountant should:

Cross out or delete the original entry and journalize a debit to equipment for $10,000 and a credit to cash for $10,000

9. When recording a transaction in a​ journal, the account listed first is always​ the:

DEBIT

On May 14th, paid $700 to vendors for supplies that had been purchased on account in April, how does this affect the accounting equation?

Debit accounts payable, credit cash

When a company pays its vendor for fuel reviously purchased on account, what is the journal entry?

Debit accounts payable, credit cash

A company makes a $10,000 payment on a bank loan and mistakenly records the following entry: Debit Accounts Payable $10,000 Credit Cash $10,000 Which of the following choices would correct the error?

Debit notes payable $10,000 (properly record) Credit accounts payable $10,000 (fix error)

On August 1, Kitchen Designs paid six months of rent for one of its stores in advance. The journal entry to record this transaction is:

Debit prepaid rent; credit cash

The accountant or bookkeeper will document that data was transferred from the general journal to the general ledger by doing which if the following?

Entering "PR" in the journal and ledger

An owner of a landscaping business contributes three lawn mowers worth $3,000 to her business. What is the correct recording of this transaction?

Equipment $3,000 debit, capital $3,000 credit

What is the purpose of posting?

Update the account balances in the ledger

A debit to a liability account was posted to a revenue account. This would cause:

revenue to be understated.

2.Posting is performed by transferring information from the journal to​ the:

LEDGER

A credit to the capital account was posted to notes payable in error. This would cause:

Liabilities to be overstated

An owner contributed $10,000 cash to his business and correctly debited cash for $10,000 but in in error, credited a liability account. Which of the following would be true?

Liabilities would be overstated and equity would be understated.

5. Which of the following entries records the acquisition of office supplies for​ cash?

OFFICE SUPPLIES LEFT 1000 CASH RIGHT 1000

3.How are credits distinguished from debits in the​ journal?

INDENTING

Which of the following would be an explanation for a transaction where Prepaid rent is debited and cash is credited?

A company paid for rent in advance of enjoying the benefits of the lease

7.If a trial balance is not​ equal, you should​ first:

RE-ADD THE TRIAL BALANCE AND. CALCULATE THE DIFFERENCE

The journal entry to record a particular transaction is debit accounts receivables and credit delivery fees earned. Which of the following would be the description of that transaction?

A delivery company billed a customer for services rendered and the customer will pay in the future

Which of the following would be considered an error because of a "slide"?

A sale for $721 was incorrectly recorded as $7,210

A company purchases computer equipment from a supplier for $10,000 and pays $3,000 cash with the remaining amount owed on account. The transaction is records with a debit to Equipment for $10,000, credit to cash for $3,000, and a credit to accounts receivable for $7,000. What is the correction that needs to be made?

Accounts receivable should be fixed by debiting the account $7,000 and properly recording accounts payable as a credit of $7,000 Accounts receivable was incorrectly credited for $7,000. That needs to be reversed with a $7,000 debit and accounts payable should be credited for $7,000 as that is how much is owed to the supplier as a result of this transaction.

An accountant comes upon a posting mistake in the general ledger that resulted in assets being understated and expenses being overstated. Which of the following mistakes would have that effect?

Accounts receivable should be fixed by debiting the account $7,000 and properly recording accounts payable as a credit of $7,000 Accounts receivable was incorrectly credited for $7,000. That needs to be reversed with a $7,000 debit and accounts payable should be credited for $7,000 as that is how much is owed to the supplier as a result of this transaction.

Which of the following correctly describes the order of the accounts listed in a trial balance?

In the same order, as in the ledger

Which of the following is not correct with regards to the Trial Balance?

It is another name for the balance sheet

6.Business transactions are first recorded in​ the:

JOURNAL

For which of the following reasons would the withdrawal account be debited?

Owner removes cash from the business for personal expenses

"PR" in the general journal and general ledger stands for:

Posting Reference.

At the end of an accounting period, an accountant prepares a report that shows all the accounts of the company and their related balances. The balance of each account is listed in either a debit or credit column and each column is totaled to determine if there is an equality of debits and credits. What is the accountant doing?

Preparing a trial balance

What is the first step to take if the total of the debit balances does not equal the total of the credit balances on a Trial Balance?

Re-add the Trial Balance and calculate the difference

A customer pays on an account and the payment was incorrectly posted as a debit to a revenue account. The credit was properly posted to accounts receivable. This would cause:

Revenue to be understated

4.Revenue is traditionally recognized in the accounting records​ when:

SERVICES ARE RENDERED

Analyzing business transactions is which step in the accounting cycle?

Step 1

The process by which business transactions are recorded, financial statements are prepared, and temporary accounts are closed is called:

The accounting cycle

Below are selected balances from a trial balance. Applying the concept of normal balances, which of the following statements is true? Cash $10,000 (debit balance) Accounts Receivable $20,000 (credit balance) Accounts Payable $15,000 (credit balance) Capital $50,000 (debit balance)

The accounts receivable account should have a debit balance and the capital account should have a credit balance

Below are selected balances from a trial balance. Applying the concept of normal balances, which of the following statements is true? Cash $10,000 (debit balance) Accounts Receivable $20,000 (debit balance) Accumulated depreciation $4,000 (debit balance) Accounts Payable $15,000 (credit balance) Capital $50,000 (credit balance)

The accumulated depreciation account should have a credit balance

Which of the following statements is true of the accounting cycle?:

The process that begins with recording business transactions, includes the preparation of a trial balance and the financial statements and ends with the completion of the post-closing trial balance

The sale of a product is traditionally recognized as revenue in the accounting records when:

The product is delivered to the customer

A product is sold to a customer who takes delivery of the product but will not pay for the purchase until next month when payment is reasonably expected. Which of the following is true?

The revenue from the sale should be recorded immediately because it was earned

A sale for $8,920 was recorded erroneously as $89,200. Which of the following statements is true?

This is a slide

If the business records a sale as $189 and it should be $198, this error would be called a:

Transposition