chap 2
The accounts in the ledger of Monroe Entertainment Co. are listed below. All accounts have normal balances. Accounts Payable $1,500 Fees Earned $3,600 Accounts Receivable 1,800 Insurance Expense 1,300 Prepaid Insurance 2,000 Land 3,000 Cash 3,200 Wages Expense 1,400 Drawing 1,200 Capital 8,800 Prepare a trial balance. The total of the debits is
$13,900
The Posting Reference columns are used to trace transactions from the ledger to the journal. What will be entered in the Posting Reference column of (1) the journal and (2) the ledger?
(1) the account number and (2) the journal page number
Cash was paid by Janer's Cleaning Service to creditors on account. Which of the following entries for Janer's Cleaning Service records this transaction?
Accounts Payable, debit; Cash, credit
Which of the following accounts would be increased with a credit?
Accounts Payable; Unearned Revenue; Collins, Capital
A client has a massage and asks the company bookkeeper to mail her the bill. The bookkeeper should make which entry to record the invoice?
Accounts Receivable, debit; Fees Earned, credit
Which of the following groups of accounts have a normal debit balance?
Assets and expenses
Which of the following entries records the receipt of cash from clients on account?
Cash, debit; Accounts Receivable, credit
Which of the following entries records the collection of cash from cash customers?
Cash, debit; Fees Earned, credit
Which of the following entries records the receipt of cash for two months' rent? The cash was received in advance of providing the service.
Cash, debit; Unearned Rent, credit
Joshua Scott invests $40,000 into his new business. How would this transaction be entered in the journal in good form?
Cash40,000 Joshua Scott, Capital40,000 Invested cash in business.
Which of the following entries records the payment of an account payable?
Debit Accounts Payable; Credit Cash
Which of the following entries records the investment of cash by Taylor Thomas, owner of a proprietorship?
Debit Cash; Credit Taylor Thomas, Capital
Which of the following entries records the payment of a bill for your insurance premium?
Debit Prepaid Insurance; Credit Cash
Which of the following entries records the withdrawal of cash by Sally Anderson, owner of a proprietorship, for personal use?
Debit Sally Anderson, Drawing; Credit Cash
In accordance with the debit and credit rules, which of the following is true?
Debits increase assets.
Which of the following is not true with a double-entry accounting system?
Each business transaction will have two debits.
Gently Laser Clinic purchased laser equipment for $8,500 and paid $2,250 down, with the remainder to be paid later. The correct entry would be
Equipment8,500 Accounts Payable6,250 Cash2,250
Which of the following applications of the rules of debit and credit is true?
Increase Equipment with a debit and the normal balance is a debit
A debit balance in which of the following accounts would likely indicate an error?
Notes Payable
Which of the following entries records the acquisition of office supplies on account?
Office Supplies, debit; Accounts Payable, credit
Apr. 14 Equipment 15,000 Cash 5,000 Notes Payable 10,000 ???????????? Which is the best explanation for this journal entry?
Purchased equipment; paid cash of $5,000, with the remainder to be paid in the future.
Which of the following owner's equity accounts follows the same debit and credit rules as liabilities?
Revenue accounts only
Which of the following types of accounts have a normal credit balance?
Revenues and capital
A credit balance in which of the following accounts would likely indicate an error?
Salary Expense
Which of the following situations increases owner's equity?
Services are provided on account.
Which of the following is not a correct rule of debits and credits?
The normal balance for revenues and expenses is a credit.
Which of the following is true regarding normal balances of accounts?
The normal balance is on the increase side of the account.
All of the following accounts are increased with a debit except
Unearned Revenue
The balance of an account is determined by
adding all of the debits, adding all of the credits, and then subtracting the smaller sum from the larger sum
In which of the following types of accounts are decreases recorded by credits?
assets
Which of the following accounts are debited to record increases?
assets and expenses
Which of the following groups of accounts is increased with a debit?
assets, drawing, expenses
Which of the following entries records the payment of insurance for the current month?
c.Insurance Expense, debit; Cash, credit
The payment for the monthly rent will require which of the following entries?
debit Rent Expense and credit Cash
A credit may signify a
decrease in assets
When a transposition error is made on the trial balance, the difference between the debit and credit totals on the trial balance will be
divisible by 9
May 23 Cash 22,000 Scott Clark, Capital 22,000 Invested cash in business. This journal entry will
increase Cash and increase Capital
The ____ is where a transaction can first be found in the accounting records.
journal
The process of initially recording a business transaction is called
journalizing
In which of the following types of accounts are decreases recorded by debits?
liabilities
Which of the following groups of accounts increases with a credit?
liabilities, capital, revenues
The classification and normal balance of the accounts payable account are
liability, credit balance
The classification and normal balance of the drawing account are
owner's equity, debit balance
The process of recording a transaction in the journal is called
posting
The process of transferring the debits and credits from the journal entries to the accounts is called
posting
Which of the following describes the classification and normal balance of the fees earned account?
revenue, credit
A debit signifies a decrease in
revenues
In which of the following types of accounts are increases recorded by credits?
revenues and liabilities
Expenses follow the same debit and credit rules as
the drawing account
That the total dollar amount of the debits equals the total dollar amount of the credits in the ledger accounts can be verified through a(n)
trial balance
