Accounting Ch.3

The informal listing of the ledger accounts and their balances in the ledger to aid in proving the equality of debits and credits is the:

trial balance.

The purpose of posting is to:

update the account balances in the ledger.

The posting reference column in the ledger is:

used to record the journal and page number the transactions originated.

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.

If you debit Prepaid Insurance, you most likely will:

credit Cash.

On July 1, Bill's Construction paid six months' insurance in advance. The journal entry to record this transaction is:

debit Prepaid Insurance; credit Cash

The journal entry debiting Cash and crediting Capital would be a result of a(n):

investment.

The general ledger:

is the book of final entry.

Business transactions are first recorded in the:

journal

The process of initially recording business transactions in a journal is:

journalizing

Posting is performed by transferring information from the journal to the:

ledger

Which of the following accounts would be credited in a proper journal entry?

Accounts Payable when it is increased

During the month of October, Ford advertised on the Internet. Ford received the bill for $500 in October, but waited until November to pay the advertising expense. The journal entry to record the payment in November is:

Accounts Payable, debit; Cash, credit

Which of the following accounts would be debited in a proper journal entry?

Accounts Receivable when it is increased

During the month of June, Jane invested $19,000 in starting her legal practice. The proper journal entry would be:

Cash, debit $19,000; Jane, Capital, credit $19,000

Bob's catered a reception. The total price was $600. The customer paid half of the fee in cash and placed the remainder on account. The journal entry to record this transaction is:

Cash, debit $300; Accounts Receivable, debit $300; Catering Service Fees, credit $600

The entry to record the payment of rent would be:

Debit Rent Expense; Credit Cash

Renzi's Volleyball Gym purchased equipment for $1,300. It made a down payment of $500 with the remainder on account. The journal entry to record this transaction is:

Equipment, debit $1,300; Accounts Payable, credit $800; Cash, credit $500

Purchased Equipment for $10,000, paid half of the amount, and the balance on account. The journal entry to record this transaction is:

Equipment, debit $10,000; Cash, credit $5,000; Accounts Payable, credit $5,000

How are credits distinguished from debits in the journal?

Indenting

The general journal entry to record a payment to a creditor would most commonly include:

a debit to Accounts Payable and a credit to Cash.

The general journal entry to record the earning of revenue would most commonly include:

a debit to Accounts Receivable and a credit to Fees Earned.

The journal entry to record a shift of assets would include:

a debit to Cash and a credit to Accounts Receivable.

Conner Sales' total assets and total liabilities increased $3,400. The transaction could have been:

purchase of supplies for $3,700 with a down payment of $300 and the remainder on account.

If Fees Earned has been credited, it is most likely that:

services were provided.

If Accounts Receivable has been credited, it is most likely that:

the company collected a payment from a customer.

Given the following list of accounts with normal balances, what are the trial balance totals of the debits and credits? Accounts Payable 7,255 Equipment 8,000 Consulting Fees 12,181 Cash 13,000 Prepaid Insurance 800 Utilities Expense 950 Accounts Receivable 3,350 J.Y., Capital 9,374 Advertising Expense 730 J.Y., Withdrawals 1,000 Rent Expense 980

$28,810 debit, $28,810 credit

Given the following list of accounts with normal balances, calculate net income or net loss: Accounts Payable 7,255 Equipment 8,000 Consulting Fees 12,181 Cash 13,000 Prepaid Insurance 800 Utilities Expense 950 Accounts Receivable 3,350 J.Y., Capital 9,374 Advertising Expense 730 J.Y., Withdrawals 1,000 Rent Expense 980

$9,521 net income

Sue's Book Review provided services $5,000, received $2,000, and the balance on account. The journal entry to record this transaction is:

Accounts Receivable, debit $3,000; Cash, debit $2,000; Review Fees, credit $5,000

Which of the following statements is false regarding a proper journal entry?

Always list the expenses first.

If Accounts Payable has been credited, it is most likely that:

the company made a purchase and will pay for the purchase next month.

If Prepaid Rent has been debited, it is likely that:

the rent was paid for three months in advance.