Accounting CH 7

The income statement credit column of the worksheet showed the following​ revenues: Catering Fees​ Earned, ​$650 Catering Fees​ Earned, ​$850 The journal entry to close the revenue accounts​ is:

A. Catering Fees Earned 650 Cleaning Fees Earned 850 Income Summary 1,500

Sandra's Design Studio showed the Office Supplies account with a balance of​ $1,000. A count of the supplies left on hand as of June 30 was​ $700. The adjusting journal entry​ is:

A. Office Supplies Expense 300 Office Supplies 300

B.​ Jensen's worksheet showed the revenue​ account, Rental​ Fees, $1,400. The journal entry to close the account​ is:

A. Rental Fees 1,400 B.​ Jensen, Capital 1,400 B. Rental Fees 1,400 Income Summary 1,400 C. Income Summary 1,400 Rental Fees 1,400 D. B.​ Jensen, Capital 1,400 Rental Fees

Which of the following accounts will be closed directly to Capital at the end of the fiscal​ year?

A. Withdrawals

To close the Withdrawals​ account:

A. debit​ Capital; credit Withdrawals.

Closing​ entries:

A. must be journalized and posted.

Each adjusting entry​ affects:

A. the income statement. B. the balance sheet. Both A and B are correct.

Which of the following accounts would appear on the postclosing trial​ balance?

A. Accounts Receivable

A business received $10,000 from a customer in payment of an amount owed. The effect of the transaction on the accounting equation was​ to:

A. Increase one Asset (Cash), decrease another Asset (Amount owed by the customer).

The transaction that would cause one asset to decrease and another asset to increase is:

A. The business bought supplies for cash.

If total Liabilities are $55,000 and​ Owner's Equity is $35,000​, the total Assets must​ be:

A.$90,000

​Given: At year​ end, an inventory of Office Supplies showed $250. Given: At year-end, an inventory of Office Supplies showed $250. How much is the adjustment for office ​Supplies? Adjustment for Office Supplies =

Adjustment for Office Supplies = $800

On a​ worksheet, the adjusted trial balance column​ totals:

All of the above

What function does the PR column​ serve? When will Account 111 be used in the journalizing and posting​ process?

All of the above

The Balance Sheet may also be​ called:

B. Statement of Financial Position

On a​ worksheet, the income statement debit column totals​ $24,400 and the credit column totals​ $40,300. Which of the following statements is​ correct?

B. The company had a net income of​ $15,900.

Endorsing a​ check:

B. allows the bank to collect the money from the drawer of the check.

What is X−cel ​Company's net income or net loss if it had Revenue of $2,500​, Salary Expense of $200​, Utility Expense of $450​, and Withdrawals of $3,000 during​ October?

$1,850 net income

Identify which of the following taxes are paid by the employee and which are paid by the​ employer: b. FIT

employees

Identify which of the following taxes are paid by the employee and which are paid by the​ employer: c. FUTA

employer

Identify which of the following taxes are paid by the employee and which are paid by the​ employer: d. SUTA

employer

Adjusting journal​ entries:

must be journalized and posted.

The worksheet is a fiancial statement.

False

What is X−cel ​Company's net income or net loss if it had Revenue of $2,700​, Salary Expense of $300​, Utility Expense of $650​, and Withdrawals of $3,000 during​ October?

A. $1,750 net income

Given the following list of accounts with normal​ balances, what are the trial balance totals of the debits and​ credits? Cash $1,200 Accounts Receivable 1,000 Capital 2,100 Accounts Payable 500 Service Fees Earned 1,300 Rent Expense 1,700

A. $3,900 ​debit, $3,900 credit

When revenue is​ closed:

A. Income Summary will be credited.

​Bob's catered a reception. The total price was $700. The customer paid half of the fee in cash and placed the remainder on account. The journal entry to record this transaction​ is:

C. Cash 350 Accounts Receivable 350 Catering Service Fees 700

The following normal account balances were found on the general ledger before closing entries were​ prepared: Revenue ​$800 Cash ​$600 Expenses ​$410 Accounts Receivable ​$430 Capital ​$7,200 Withdrawals ​$1,300 After closing entries are​ posted, what is the balance in the Cash​ account?

C. ​$600

If Total Assets are $59,000 and Total​ Owner's Equity is $23,000​, Liabilities must​ equal:

C.$36,000

Go Big Red Retail Store collected $13,000 of its accounts receivable. The expanded accounting equation changes​ include:

Cash increases and Accounts Receivable decreases

Which of the following is a temporary​ account?

D. All of the above are temporary accounts

The entry to record the payment of office salaries would​ be:

D. Debit Salaries Expense; Credit Cash

From the following​ information, calculate the payroll tax expense for Old Company for the payroll of April 9: The FICA Social Security tax rate is 6.2​% on the first $142,800 ​earned, and FICA Medicare is 1.45​% on all earnings. Federal unemployment tax is 0.6​% on the first​ $7,000 earned by each employee. The SUTA tax rate for Old Company is 5.7​% on the first​ $7,000 of employee earnings for state unemployment purposes.

FICA Social Security: $131.44 FICA Medicare: 30.74 FUTA: 10.80 SUTA: 102.60 Total: $275.58

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

a payment was made on account.

If the business records a number as 971 and it should be​ 179, this error would be​ called:

a transposition.

Journal entries that are needed in order to update account balances for internal business transactions​ (such as supplies and prepaid​ rent) at the end of the period are​ called:

adjusting entries.

A credit to an asset account was posted to a liability account. This would​ cause:

assets to be overstated.

A debit to an expense account was posted to an asset account. This would​ cause:

assets to be overstated.

Identify which of the following taxes are paid by the employee and which are paid by the​ employer: a. FICA Social Security and Medicare

both employees and employers

The adjusting entry to record depreciation for the company automobile would​ be:

debit Depreciation​ Expense, Automobile; credit Accumulated​ Depreciation, Automobile.

The adjusting entry to record the expired rent would be​ to:

debit Rent​ Expense; credit Prepaid Rent.

The adjusting entry for accrued salaries is​ to:

debit Salaries​ Expense; credit Salaries Payable.

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

journalizing.

On Petro​ Company's worksheet, the Revenue account had a normal balance of $3,100. The entry to close the account would include​ a:

B. credit to Income Summary for $3,100.

M. Sims showed a net income of​ $8,000. The entry to close the Income Summary account would include​ a: Question content area bottom Part 1 A. debit to M. Sims​ Capital, $8,000. M. Sims showed a net income of​ $8,000. The entry to close the Income Summary account would include​ a: Question content area bottom Part 1 A. debit to M. Sims​ Capital, $8,000. B. credit to M. Sims​ Capital, $8,000. C. debit to Income​ Summary, $8,000. D. Both B and C are correct.

B. credit to M. Sims​ Capital, $8,000. C. debit to Income​ Summary, $8,000. D. Both B and C are correct.

Internal control over a​ company's assets should NOT include the following​ procedures:

B. All cash receipts will be accumulated for several days until significant enough for a major deposit.

Which of the following sequence of actions describes the proper order in the accounting cycle when worksheets are​ used?

B. Analyze transactions, journalize, post, worksheet, adjustments on worksheet, prepare financial statements, journalize and post adjusting entries, journalize and post closing entries.

Crystal Clear Imagery received and paid a utility bill for​ $600 for the month of November. This transaction​ will:

B. Decrease Cash and increase Utility Expense.

Pat purchased $14,000 of new electronic equipment for her BJ Company on account. The effect on the basic accounting equation was​ to:

B. increase Equipment $14,000 and increase Accounts Payable $14,000.

The following normal account balances were found on the general ledger before closing entries were​ prepared: Revenue ​$1,700 Cash ​$1,100 Expenses ​$610 Accounts Receivable ​$360 Capital ​$7,400 Withdrawals ​$1,600 After all closing entries are​ posted, what is the balance in the Capital​ account?

B.$6,890

​John's Tree​ Service's depreciation expense on its equipment for the month is $700. The adjusting journal entry​ is:

D. Depreciation​ Expense, Equipment 700 Accumulated​ Depreciation, Equipment

​Tom's Electrical Service purchased tools for $6,000. Depreciation expense for the month is ​$300. The adjusting journal entry for the month​ is:

D. Depreciation​ Expense, Tools 300 Accumulated​ Depreciation, Tools 300

J. Oakely showed a net loss of $6,500. The entry to close the Income Summary account would include​ a:

D. debit to J.​ Oakely, Capital, $6,500.

If beginning capital was $130,000​, ending capital is $90,000​, and the​ owner's withdrawals were $16,000​, the amount of net income or net loss​ was:

D. net loss of $24,000

If beginning capital was $120,000​, ending capital is $95,000​, and the​ owner's withdrawals were $20,000​, the amount of net income or net loss​ was:

D. net loss of $5,000

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

D. Equipment 1,500 Accounts Payable 1,000 Cash 500

After closing the revenue and expense​ accounts, Income Summary showed a debit balance of​ $1,900. Which of the following statements is​ true?

D. The company had a net loss of $1,900.

The final step in the accounting cycle is:

preparing a post-closing trial balance

Revenue is traditionally recognized in the accounting records​ when: Question content area bottom

services are rendered and cash may or may not be received.

The inside columns on the financial statements are used​ to:

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