FA Chapter 2

Suppose Crush Boutique must pay 5% interest to the bank on its notes payable, but it is going to make the payment at the beginning of 2014. How would this transaction change the trial balance?

Credit Accrued Interest Liability by 5%*Notes Payable Debit Interest Expense by 5%*Notes Payable

Suppose the Candy Shop prepays a television network 3 months of advertising spots. Suppose it paid $30000 on 6/1/13. What would the journal entry look like on 6/1/13?

Debit Prepaid Advertising $30000 Credit Cash $30000

On 1/1/14, Cardullo's paid $2400 for 12 months of insurance. How would this transaction be recorded on 1/1/14?

Debit Prepaid Insurance $2400 Credit Cash $2400

Maria prepays $360 or marketing on 1/1/14 for six months. How would this transaction be recorded?

Debit Prepaid Marketing Expense $360 Credit Cash $360

Acorns has a membership in the Bakers Association of American and pas $150 for the year. If Acorns makes the payment on 1/1/14 and considers the fees paid as assets, how would this transaction be recorded?

Debit Prepaid Membership $150 Credit Cash $150

What Account is Affected by the following transaction? Paid Rent

Debit Rent Expense Credit Cash

Crush Boutique made 3 years of lease rental payments at the beginning of the year. How does Crush adjust the accounts to show that 1/3 of the asset prepaid rent was used up?

Debit Rent Expense Credit Prepaid Rent

What Account is Affected by the following transaction? Declared Dividends

Debit Retained Earnings Credit Dividends Payable

What Account is Affected by the following transaction? Purchased Supplies on Credit

Debit Supplies Credit Accounts Payable

Would you debit or credit the account to achieve the following result? Increase accounts payable

Credit

Would you debit or credit the account to achieve the following result? Increase revenue

Credit

Suppose that on 1/1/13, Coca-Cola signed an agreement with Pineapple Farms to buy a 1-year supply of pineapple juice for $60000. Pineapple Farms delivered the juice at the beginning of the month and expected payment at the end of the month. Coca-Cola has yet to bottle the juice as of 1/31/13. What is the expense recognized by Coca-Cola on 1/31/13

$0

Suppose Coca-Cola sold 50 cases of Coke to a convenience store for $1000 on 10/1/2013. The store paid cash. It had cost Coca-Cola $600 to make the 50 cases. How much revenue did Coca-Cola earn on this sale?

$1000

Suppose that on 1/1/13, Coca-Cola signed an agreement with Pineapple Farms to buy a 1-year supply of pineapple juice for $60000. Pineapple Farms delivered the juice at the beginning of the month and expected payment at the end of the month. Which account(s) should Coca-Cola CREDIT on 1/1/13?

Accounts Payable

Suppose that on 1/1/13, Coca-Cola signed an agreement with Pineapple Farms to buy a 1-year supply of pineapple juice for $60000. Pineapple Farms delivered the juice at the beginning of the month and expected payment at the end of the month. Which account(s) should Coca-Cola DEBIT on 1/31/13?

Accounts Payable

Indicate whether the accounts that will be affected by the transaction are assets, liabilities, or owners' equity. On 9/1/13, Acorns purchased an order of almond paste from its supplier for $80. It paid for the almond paste on 9/30/13

Accounts Payable, Liability Supplies, Asset

Accounts that typically have debit balances:

Assets Expenses

On September 1, 2013, Acorns bought a new mixer for $1600 and paid in cash. How was the accounting equation affected?

Assets decreased by $1600 to record cash payment Assets increased by $1600 to record new mixer purchase

Suppose that on 1/1/13, Coca-Cola signed an agreement with Pineapple Farms to buy a 1-year supply of pineapple juice for $60000. Pineapple Farms delivered the juice at the beginning of the month and expected payment at the end of the month. Which account(s) should Coca-Cola CREDIT on 1/31/13?

Cash

Which of the following accounts increases with a debit? Cash Depreciation Expense Prepaid Rent Sales Revenue Deferred Revenue

Cash Depreciation Expense Prepaid Rent

Suppose Coca-Cola sold 50 cases of Coke to a convenience store for $1000 on 10/1/2013. The store paid cash. It had cost Coca-Cola $600 to make the 50 cases. Which of Coca-Cola's journal entries would be affected?

Cash Inventory Revenue COGS

On September 1, 2013, Acorns bought a new mixer for $1600 and paid in cash. Indicate whether the accounts that will be affected by the transaction are assets, liabilities, or owners' equity.

Cash, Asset Mixer, Asset

Which of the following decreases with a credit? Accrued Wages Cost of Goods Sold Sales Preferred Stock Accounts Receivable Cash

Cost of Goods Sold Accounts Receivable Cash

Which of the following is an expense account? Cost of Goods Sold Prepaid Expense Wages Payable Rent Expense Wages Expense

Cost of Goods Sold Rent Expense Wages Expense

Accounts Payable increases with a:

Credit

Cash decreases with a:

Credit

To increase common stock you would

Credit

To increase deferred revenue you would

Credit

To increase gain on sale of asset you would

Credit

To increase retained earnings you would

Credit

Would you debit or credit the account to achieve the following result? Decrease inventory

Credit

Would you debit or credit the account to achieve the following result? Decrease rent expense

Credit

Common Stock decreases with a:

Debit

Notes Receivable increases with a:

Debit

To decrease common stock you would

Debit

To decrease deferred revenue you would

Debit

To decrease retained earnings you would

Debit

To decrease revenue you would

Debit

To decrease wages payable you would

Debit

To increase cash you would

Debit

To increase equipment you would

Debit

To increase loss on sale of asset you would

Debit

To increase rent expense you would

Debit

Would you debit or credit the account to achieve the following result? Decrease retained earnings

Debit

Would you debit or credit the account to achieve the following result? Increase accounts receivable

Debit

Would you debit or credit the account to achieve the following result? Increase cash

Debit

Would you debit or credit the account to achieve the following result? Increase depreciation

Debit

On 1/1/14, Acorns bought 1- boxes of chocolate from its supplier for $150. Acorns paid for the chocolate on 1/31/14. What would the entry on 1/31/14 look like?

Debit Accounts Payable $150 Credit ash $150

What Account is Affected by the following transaction? Sold goods to a customer on account

Debit Accounts Receivable Credit Revenue

Suppose on 11/1/13, The Cheese Shop (TCS) sold 1 wheel of brie to Whole Foods for $120. TCS had originally bought the brie from France for $80. Whole Foods doesn't have to pay until 11/30/13. What would be the journal entry to record this sale?

Debit Accounts Receivable $120 Credit Revenue $120 Debit COGS $80 Credit Inventory $80

On 6/1/13, Acorns paid $150 for 10 boxes of tea. Then one of Acorns customers bought the 10 boxes for $200 and promised o send a check within 30 days. What would the journal entry look like to record this transaction on 6/1/13?

Debit Accounts Receivable $200 Credit Revenue $200 Debit COGS $150 Credit Inventory $150

On 12/1/13, Acorns sold 2 bags of coffee to the Parent-Teacher Association for $30. The PTA will pay for the coffee at the end of the month. Acorns bought the coffee for $20. How would the sale being made on 12/1/13 and the corresponding expense be recorded in the journal entry?

Debit Accounts Receivable $30 Credit Revenue $30 Debit COGS $20 Credit Inventory $20

On 1/1/15, a dealership sold two cars to the town for $50000 total. Outback had paid $37000 originally for the cars. The town was granted credit terms and permitted 30 days to pay. On the same day of the sale, Outback delivered the cars to the town. Consider both the revenue and cost of this transaction. On 1/1/15, Outback recorded the following transaction:

Debit Accounts Receivable $50000 Credit Revenue $50000 Debit COGS $37000 Credit Inventory $37000

Suppose on 6/1/13, Cardullo's sold 10 bags of tea for $80 to a customer who paid in cash. The business previously purchased the tea for $50 and recorded it as inventory. What is the journal entry related to the delivery of inventory to the customer?

Debit COGS $50 Credit Inventory $50

What Account is Affected by the following transaction? Borrowed Cash from a Bank

Debit Cash Credit Notes Payable

Suppose Coca-Cola sold 50 cases of Coke to a convenience store for $1000 on 10/1/2013. The store paid cash. It had cost Coca-Cola $600 to make the 50 cases. How would the various accounts be affected to reflect the revenues and expenses associated with this sale?

Debit Cash $1000 Credit Revenue $1000 Debit COGS $600 Credit Inventory $600

Suppose on 11/1/13, The Cheese Shop (TCS) sold 1 wheel of brie to Whole Foods for $120. TCS had originally bought the brie from France for $80. Whole Foods paid on 11/30/13. What would the journal entry for TCS look like to record this transaction on 11/30/13?

Debit Cash $120 Credit Accounts Receivable $120

On 12/1/13, Acorns sold 2 bags of coffee to the Parent-Teacher Association for $30. The PTA will pay for the coffee at the end of the month. Acorns bought the coffee for $20. How would the payment being received on 12/31/13 be recorded in the journal entry?

Debit Cash $30 Credit Accounts Receivable $30

Suppose Spartan Gym sold a 3-month unlimited pilates class to one of its customers who paid $300 in cash on 1/1/14. What would the journal entry look like to record this transaction on 1/1/14?

Debit Cash $300 Credit Deferred/Unearned Revenue $300

On 1/1/14, SG sold two t-shirts to a gym member for $40 total. SG had previously purchased the t-shirts for $25 and recorded it as inventory. What would be the journal entry to record this sale?

Debit Cash $40 Credit Revenue $40 Debit COGS $25 Credit Inventory $25

Suppose on 6/1/13, Cardullo's sold 10 bags of tea for $80 to a customer who paid in cash. The business previously purchased the tea for $50 and recorded it as inventory. What is the journal entry related to the receipt of cash?

Debit Cash $80 Credit Revenue $80

Cakery Bakery received $1000 from a customer on August 5, 2016, for a wedding cake to be delivered on September 19, 2016. What would Cakery Bakers record on their books when the cake is successfully delivered?

Debit Deferred Revenue $1000 Credit Revenue $1000

Suppose Spartan Gym sold a 3-month unlimited pilates class to one of its customers who paid $300 in cash on 1/1/14. What would the journal entry look like to record this transaction on 1/31/14?

Debit Deferred/Unearned Revenue $100 Credit Revenue $100

On 1/1/14, Cardullo's paid $2400 for 12 months of insurance. How would this transaction be recorded on 1/31/14?

Debit Insurance Expense $200 Credit Prepaid Insurance $200

On September 1, 2013, Acorns bought a new mixer for $1600 and paid in cash. Select the correct amounts to be debited as a result of this transaction:

Debit Mixer Credit Cash

On January 1, 2014, Acorns purchased 20 jars of jam as inventory from its supplier for $100. Select the correct account and amount to be debited as a result of this transaction.

Debit inventory Credit cash

On 1/1/14, Acorns bought 1- boxes of chocolate from its supplier for $150. Acorns paid for the chocolate on 1/31/14. What would the entry for the initial purchase on 1/1/14 look like?

Debit inventory $150 Credit Accounts Payable $150

Select all that apply Credits... Increase expenses Decrease assets Increase revenues Decrease equity Increase liabilities

Decrease assets Increase revenues Increase liabilities

Which of the following accounts is increased with a credit? Inventory COGS Deferred Revenue Cash

Deferred Revenue

Select all the apply Debits... Increase assets Decrease assets Increase expenses Decrease liabilities Increase equity

Increase assets Increase expenses Decrease liabilities

Suppose that on 1/1/13, Coca-Cola signed an agreement with Pineapple Farms to buy a 1-year supply of pineapple juice for $60000. Pineapple Farms delivered the juice at the beginning of the month and expected payment at the end of the month. Which account(s) should Coca-Cola DEBIT on 1/1/13?

Inventory

Accounts that typically have credit balances:

Liabilities Owners Equity Revenues

Suppose your company receives a large order from your best customer. Should this be treated as revenue and recorded on the books?

No, because revenue is not considered earned until a product or service is delivered

Which of the following accounts is decreased by a debit? Sales Revenue Rent Expense Deferred Revenue Interest Expense Prepaid Rent

Sales Revenue Deferred Revenue

Which of the following transactions would cause the following journal entry? Debit Accounts Payable Credit Cash The business pays a supplier for merchandise purchased on credit The business receives a refund for merchandise returned to its supplier The business orders merchandise from a supplier

The business pays a supplier for merchandise purchased on credit

Which of the following transactions would result in this journal entry? Debit Dividends Payable Credit Cash The business pays dividends to its shareholders On the day of the record, the business sets money aside to pay for dividends The business declares dividends payable

The business pays dividends to its shareholders

Which of the following transactions would cause this journal entry? Debit Accounts Receivable $10000 Credit Sales $10000 Debit COGS $7000 Credit Inventory $7000 The business sold inventory to a customer for $10000, which it originally purchased for $7000 The business purchased inventory for $7000, which it will sell for $10000 The business sold inventory to a customer for $7000, which it originally purchased for $10000

The business sold inventory to a customer for $10000, which it originally purchased for $7000

Which of the following is true regarding journal entries? There are always only two accounts affected The total amount debited must equal the total amount credited Journal entries show debits on the right and credits on the left Journal entries show credits first, then debits

The total amount debited must equal the total amount credited

Which of the following is false regarding accrual accounting? Revenues are recorded when earned Accrual accounting follows the matching principle Expenses are recorded as incurred Transactions are only recorded when there is an exchange of cash

Transactions are only recorded when there is an exchange of cash