Chapter Two - Accounting

Identify which error below will cause a trial balance to be out of balance.

A $63 cash purchase of office supplies posted as a $630 debit to Office Supplies and a $63 credit to Cash.

A company received a $ 250 invoice for plumbing repairs. This service was provided on credit. How should this transaction be recorded?

Accounts Payable - $250 Cash - $250

A company paid $ 5,000 cash to settle a prior credit purchase from a vendor. How should this transaction be recorded?

Accounts Payable - $5,000 Cash - $5,000

Which of the following accounts has a "normal" credit balance?

Accounts Receivable

A company issued (sold) $ 25,000 of common stock in exchange for $ 16,000 of cash and equipment appraised at $ 9,000. How should this transaction be recorded?

Cash - $16,000 Equipment - $9,000 Common Stock - $25,000

A company received $ 700 cash from a customer for partial payment of a prior credit sale. How should this transaction be recorded?

Cash - $700 Accounts Receivable - $700

A company paid a $ 15,000 cash dividend to its shareholders. How should this transaction be recorded?

Dividends - $15,000 Cash - $15,000

A company's financial transactions are initially recorded in a(an):

Journal

On January 1, a company paid $ 36,000 for a two-year rental of a warehouse. How should this transaction be recorded?

Prepaid Rent - $36,000 Cash - $36,000

What do Unearned Revenue accounts represent?

Revenues that have been earned but not yet collected in cash.

A company provided $ 60,000 of services to one of its customers on credit. How should this transaction be recorded?

Services Revenue - $60,000 Accounts Receivable - $60,000

A(an) _____________ is a graphical representation of a ledger account:

T-Account

A Trial Balance can be used for all of the following, except for:

To determine the ending balance for each account.

On January 1, a company received $ 50,000 cash in advance for future services. How should this transaction be recorded?

Unearned Services Revenue - $50,000 Cash - $50,000

Which of the following is recorded with a debit?

An Increase in a Debit Account