ACCT 210 Quiz 3
An account is said to have a debit balance if:
the amount of the debits exceeds the amount of the credits
A trial balance is a(n):
tool used to prove the equality of debits and credits in the general ledger.
All of the following accounts have normal debit balances except:
Service revenue
Which of the following accounts is increased by a credit entry?
Service revenue
The two-column record used to accumulate increases and decreases for individual assets, liabilities, equity, revenue, expense, and dividends items is a:
T-account.
Which of the following accounts is decreased by a debit entry?
Unearned revenue
Set up T-accounts and post each transaction to the T-accounts. (Ignore beginning balances.)
Vehicles 6/1 19400 (debit) Cash 6/8 25000(debit) 6/1 1400 (credit) Notes Payable 6/1 18000 (credit) Accounts Receivable 6/8 45000 (debit) Service Revenue 6/8 70000 (credit) Land 6/22 65000 (debit) Common Stock 6/22 65000 (credit) Advertising Expense 6/30 1400 (debit) Accounts Payable 6/30 1400 (credit)
The purchase of office equipment on credit has what effect on the accounting equation?
Assets and liabilities increase
The accounts in the ledger of Monroe Entertainment Co. are listed in alphabetical order. All accounts have normal balances. Accounts payable 3,500 Fees earned 4,000 Accounts receivable 4,500 Insurance expense 800 Investment 3,000 Land 3,000 Cash 1,600 Wages expense 1,400 Dividends 2,200 Capital stock 9,000 Prepare a trial balance. The total of the debits is:
$16,500.
Bellarim Corporation made cash sales to customers. What effect does this transaction have on the accounting equation?
Assets and retained earnings increase
Listed below are selected accounts from the financial statements of Ellison Company for the year ended December 31. In the spaces provided for each account, indicate what type of account it is, its normal balance, and the debit/credit rules for increasing and decreasing it. Use the following abbreviations for your answer: Normal Rules to Increase or Type of Account Account Balance Decrease the Account A = Asset Dr = Debit Dr = Debit L = Liability Cr = Credit Cr = Credit SE = Stockholders' equity R = Revenue E = Expense D = Dividend 1. Accounts payable 2. Retained earnings 3. Prepaid insurance 4. Service revenue 5. Notes payable 6. Intangibles 7. Common stock 8. Salaries expense 9. Accounts receivable 10. unearned revenue
1. Accounts payable liability, normal balance= Cr 2. Retained earnings SE, normal balance= Cr 3. Prepaid insurance A, normal balance= Dr 4. Service revenue R, normal balance= Cr 5. Notes payable L, Cr 6. Intangibles A, normal balance= Dr 7. Common Stock SE, normal balance= Cr 8. Salaries expense E, normal balance= DR 9. Accounts receivable A, normal balance= Dr 10. unearned revenue L, normal balance= Cr
Machinery is purchased on credit. What effect does this transaction have on the accounting equation?
Assets and liabilities increase
Which pair of accounts has the same set of rules for debit and credit entries?
Common stock and Accounts payable
Which of the following accounts is increased by a debit entry?
Equipment
Prepare a trial balance in proper format. Assume that Inferex had no additional accounts or balances other than those created from the June transactions.
Inferex Corporation Trial Balance June 30, 2012 Account Debit Credit Cash $ 23600 . $ 0 Accounts Receivable 45000 . 0 Land 65000 0 Vehicles 19400 blank Accounts Payable 0 1400 Notes Payable 0 18000 Common Stock 0 65000 Service Revenue 0 70000 Advertising Expense 1400 0 Totals $ 154400 $ 154400
The following transactions were incurred by the Inferex Corporation during June 2012. June 1 Inferex purchased a vehicle for $19,400, paying $1,400 now and issuing a note payable for the balance; the note is due in monthly installments of $500 plus 10% interest on the unpaid principal balance. June 8 Inferex recorded service revenue earned; $25,000 cash from customers and $45,000 for customers billed for completed services. June 22 Inferex issued common stock in exchange for land having a fair value of $65,000. June 30 An invoice for $1,400 was received from the company's advertising agency for radio and television ads which were run during June; the invoice is due in 30 days. Record each transaction in proper journal entry format in the journal provided. A written explanation for each journal entry is not required
June 1 Vehicles 19400 blank Cash blank 1400 Note Payable blank 18000 June 8 Cash 25000 blank Accounts Receivable 45000 blank Service Revenue blank 70000 June 22 Land 65000(debit) Common Stock 65000(credit) June 30 Advertising Expense 1400(debit) Accounts Payable 1400(credit)
A list of all asset, liability, equity, revenue, expense, and dividend accounts which are used by the company is called a:
chart of accounts.
An entry made to the right side of an account is always a(n):
credit.
The term for the process of recording accounting transactions in the general journal is:
journalizing.
Debit entries are used to:
increase asset accounts.
Credit entries are used to:
increase liability accounts
