Unit 5 Accounting
A $23,400 balance in the sales account will increase net income $23,400.
true
A $9,720 balance in the wage expense account will decrease net income $9,720.
true
A trial balance is said to "balance" when the total of the debit column equals the total of the credit column.
true
Mr. Wright owns a dairy. His owner's equity at the beginning of the year was $14,500. His net income for the year totaled $9,800. He withdrew $5,500. He did not make any contributions to the dairy this year. The owner's equity at the end of the year will be greater than at the beginning of the year.
true
Office supplies were purchased for $35. The entry was recorded in the journal. The checking account in the ledger was reduced $35. The entry to the office supply expense account was not posted. As a result of the error, the total debit column on the trial balance would be $35 less than the total credit column.
true
Sarah owns a beauty salon. Her monthly revenues are $3,575. Her monthly expenses are $2,200. She has an opportunity to move to a new location. Her monthly revenues will increase to $4,400. Her monthly expenses will increase to $2,600. She will need to take out a bank loan to remodel the new location. Her monthly loan payment will be $375. Should you recommend that Sarah move to the new location?
yes
Using the following statement of owner's equity, what is the beginning balance of the owner's equity?
$31,400
After preparing the trial balance, you find that the total debits and the total credits are not equal. In other words, the trial balance does not balance. Which of the following is the first step to take to determine the cause of the error?
Re-add the debit and credit columns of the trial balance to make sure they were totaled correctly.
Assume Ms. Anderson owned a corner convenience store. She had not been very successful at this business. She had taken out numerous loans and owed many creditors. What statement would she look at to determine the total amount of liabilities she owed?
balance sheet
Which of the following accounts would be included in the liability section of the balance sheet?
bank loan
Which of the following accounts would be included in the asset section of the balance sheet?
cash checking account
A $2,250 balance in repairs and maintenance account will increase net income $2,250.
false
A $2,400 balance in the furniture account will increase net income $2,400.
false
A $3,190 loan balance in the ledger should be recorded on the trial balance as a $3,190 debit.
false
A $5,250 balance in the cash checking account will increase net income $5,250.
false
A journal entry recording a $50 advertising expense was not posted to the ledger. This error will cause the debit column of the trial balance to be $50 greater than the credit column.
false
Mike, the owner of a tire repair shop, has a net income of $3,500 per month. He withdraws $3,500 each month from the company for personal expenses. The company pays a $575 bank loan each month. Since net income equals the owner's withdrawals, Mike should not be concerned.
false
The trial balance is used to determine the net income a company made during the accounting period.
false
Which of the following accounts would be included in the asset section of the balance sheet?
furniture
Assume Mr. Jones owned a tire store. He was offered a job working for his competitor making $2,400 a month. Which financial statement would he look at to determine if his average profit was more or less than $2,400 per month?
income statement
