Chapter 1 & 2 Test

A sole proprietorship reported the following transactions for the month of March. The transactions have been journalized and posted to the proper accounts. Mar. 1 The business received $10,000 cash from the owner in exchange for capital. Mar. 2 Paid the first​ month's rent of $500. Mar. 3 Purchased equipment by paying $3,000 cash and executing a note payable for $5,000. Mar. 4 Purchased office supplies for $550 cash. Mar. 5 Billed a client for $11,000 of design services completed. Mar. 6 Received $7,000 on account for the services previously recorded. What is the balance in Accounts​ Receivable?

$11,000 - $7,000 = $4,000

A sole proprietorship reported the following transactions for the month of March. The transactions have been journalized and posted to the proper accounts. Mar. 1 The business received $8,000 cash from the owner in exchange for capital. Mar. 2 Paid the first​ month's rent of $800. Mar. 3 Purchased equipment by paying $2,000 cash and executing a note payable for $3,000. Mar. 4 Purchased office supplies for $500 cash. Mar. 5 Billed a client for $12,000 of design services completed. Mar. 6 Received $7,000 on account for the services previously recorded. What is the balance in Accounts​ Receivable?

$12,000 - $7,000 = $5,000

The following transactions for the month of March have been journalized and posted to the proper accounts of a sole proprietorship. Mar. 1 The business received $10,000 cash from the owner of the​ business, Morris Tharps. The business gave capital to Morris Tharps. Mar. 2 Paid the first​ month's rent of $800. Mar. 3 Purchased equipment by paying $3,000 cash and executing a note payable for $8,000. Mar. 4 Purchased office supplies for $730 cash. Mar. 5 Billed a client for $11,000 of design services completed. Mar. 6 Received $7,700 on account for the services previously recorded. What is the balance in Cash on March​ 6?

$13,170

The equity of Alliance Company is $110,000 and the total liabilities are $30,000. The total assets are​ ________.

$140,000

The Accounts Payable account of Waterford Company has the following​ postings: Accounts Payable ​16,000 I ​ 27,000 ​7,000 I​ 11,000 Calculate the ending balance of the account.

$15,000 credit

The Accounts Receivable account of Brownstone Company has the following​ postings: Accounts Receivable 21,000 I 6,000 6,000 I Calculate the ending balance of the account.

$21,000 debit

The following are selected current​ month's balances for Morgan Company. Accounts Payable $7000 Revenue 9000 Cash 4250 Expenses 1500 Furniture 12000 Accounts Receivable 16000 ​Morgan, Capital 10250 Notes Payable 7500 Based on this​ information, calculate the total amount of credits for the trial balance.

$33,750

The following are the current​ month's balances for selected accounts of Sandlin Marketing Company. Accounts Payable $8000 Revenue 9000 Cash 5250 Expenses 1500 Furniture 11000 Accounts Receivable 16000 ​Sandlin, Capital 10250 Notes Payable 6500 What is the net income for Sandlin Marketing for the current​ month?

$7,500

The following transactions have been journalized and posted to the proper accounts. March is the first month of business operations for the sole proprietorship. Mar. 1 The business received $7000 cash from the owner in exchange for capital. Mar. 2 Paid the first​ month's rent of $600. Mar. 3 Purchased equipment by paying $1000 cash and executing a note payable for $5000. Mar. 4 Purchased office supplies for $700 cash. Mar. 5 Billed a client for $11000 of design services completed. Mar. 6 Received $9000 on account for the services previously recorded. What is the ending balance in the Service Revenue​ account?

11000

Jones Supply Services paid​ $350 cash, the amount owed from the previous​ month, to a materials supplier. Which of the following accounts​ decrease?

Accounts Payable

The Accounts Receivable account of Brownstone Company has the following​ postings: Accounts Receivable 25,000 I 6,000 3,000 I Calculate the ending balance of the account.

Accounts Receivable Balance = $25000 + $3000 - $6000 = $22,000 debit

The following are selected current​ month's balances for Allbright Enterprises. Accounts Payable $7,000 Revenue 8,000 Cash 6,000 Expenses 1,200 Furniture 10,000 Accounts Receivable 14,000 ​Allbright, Capital 9,250 Notes Payable 6,950 Based on this​ information, calculate the total amount of debits for the trial​ balance?

All expenses and assets are recorded as debits in trial balance = Cash 6,000 + Expenses 1,200 + Furniture 10,000 + Accounts Receivable 14,000 = $31,200

Watson Foods​ Company, a sole​ proprietorship, reported the following transactions for​ September: ​a) The business received $22000 cash from the owner in exchange for capital. ​b) The business purchased office equipment for $11000 for which $3000 cash was paid and the balance was put on a note payable. ​c) Paid insurance expense of $1800 cash. ​d) Paid the September utility bill for $900 cash. ​e) Paid $1700 cash for September rent. ​f) The business had sales of $12000 in September. Of these​ sales, 40​% were cash​ sales, and the balance was credit sales. ​g) The business paid $8000 cash for office furniture. What are the total liabilities at the for​ September?

Amount set as note payable = $11,000-$3,000 = $8000

Watson Foods​ Company, a sole​ proprietorship, reported the following transactions for​ September: ​a) The business received $24,000 cash from the owner in exchange for capital. ​b) The business purchased office equipment for $9,000 for which $4,000 cash was paid and the balance was put on a note payable. ​c) Paid insurance expense of $1,400 cash. ​d) Paid the September utility bill for $800 cash. ​e) Paid $1,800 cash for September rent. ​f) The business had sales of $12,000 in September. Of these​ sales, 40​% were cash​ sales, and the balance was credit sales. ​g) The business paid $8,000 cash for office furniture. What are the total liabilities at the for​ September?

Amount set as note payable = $9,000-$4,000 = $5,000

Which of the following is a financial statement that presents a​ business's accounting​ equation?

Balance Sheet

The following transactions for the month of March have been journalized and posted to the proper accounts of a sole proprietorship. Mar. 1 The business received $9,000 cash from the owner of the​ business, Morris Tharps. The business gave capital to Morris Tharps. Mar. 2 Paid the first​ month's rent of $900. Mar. 3 Purchased equipment by paying $2,500 cash and executing a note payable for $6,000. Mar. 4 Purchased office supplies for $720 cash. Mar. 5 Billed a client for $8,000 of design services completed. Mar. 6 Received $7,900 on account for the services previously recorded. What is the balance in Cash on March​ 6?

Balance in cash = Cash receipts - cash payments = ($9,000+$7,900) - ($900+$2,500+$720) = 16,900 - 4120 = $12,780

A business paid​ $1,000 cash for the current​ month's rent. Which of the following accounts is​ credited?

Cash

A business purchases equipment for​ $8,000 cash. Which of the following accounts is​ credited?

Cash

Which of the following journal entries would be recorded if a business performs services and receives cash of​ $900 from the​ customer?

Cash 900 Service Revenue 900

The following are selected current​ month's balances for Allbright Enterprises. Accounts Payable $10,000 Revenue $8,000 Cash $6,000 Expenses 1,200 Furniture 12,000 Accounts Receivable 13,000 ​Allbright, Capital 10,250 Notes Payable 3,950 Based on this​ information, calculate the total amount of debits for the trial​ balance?

D. $32,200

Which of the following organizations is responsible for the creation and governance of accounting standards in the United​ States?

Financial Accounting Standards Board

GAAP refers to guidelines for accounting information in the United States. The acronym GAAP in this statement refers to​ ________.

Generally Accepted Accounting Principles

Which of the following is the correct order of preparation of financial​ statements?

Income statement --> statement of​ owner's equity --> balance sheet --> statement of cash flows

The following are the current​ month's balances for selected accounts of Sandlin Marketing Company. Accounts Payable $7,000 Revenue 12,000 Cash 4,950 Expenses 1,300 Furniture 14,000 Accounts Receivable 13,000 ​Sandlin, Capital 10,250 Notes Payable 4,000 What is the net income for Sandlin Marketing for the current​ month?

Net income is equal to=Revenue-Expenses =12000-1300 =$10,700

Which of the following journal entries would be recorded if a business purchased​ $800 of office supplies on​ account?

Office Supplies 800 Accounts Payable 800

The account title used for recording the payment of rent in advance for an office building is​ _______.

Prepaid Rent

A business paid employee salaries of​ $4,400. Which of the following accounts is​ debited?

Salaries Expense

The equity of Alliance Company is $180,000 and the total liabilities are $50,000. The total assets are​ ________.

Total Assets = $180,000 + $50,000 = $230,000

The following are selected current​ month's balances for Morgan Company. Accounts Payable $7,000 Revenue 8,000 Cash 3,500 Expenses 1,750 Furniture 10,000 Accounts Receivable 12,000 ​Morgan, Capital 8,250 Notes Payable 4,000 Based on this​ information, calculate the total amount of credits for the trial balance.

Trail balance Credit Total = Accounts payable + Revenue + Morgan, Capital + Notes payable = 7000 + 8000 + 8250 + 4000 Trial balance credit Total = $27,250

For Office​ Supplies, the category of account and its normal balance is​ ________.

assets and a debit balance

The following transactions have been journalized and posted to the proper accounts. March is the first month of business operations for the sole proprietorship. Mar. 1 The business received $10,000 cash from the owner in exchange for capital. Mar. 2 Paid the first​ month's rent of $500. Mar. 3 Purchased equipment by paying $3,000 cash and executing a note payable for $6,000. Mar. 4 Purchased office supplies for $700 cash. Mar. 5 Billed a client for $11,000 of design services completed. Mar. 6 Received $9,000 on account for the services previously recorded. What is the ending balance in the Service Revenue​ account?

ending balance in the Service Revenue=Mar. 5 Billed a client for $11,000 of design services completed. = 11,000

Transactions are first recorded in a​ ________.

journal

Which one of the following account groups normally has a credit​ balance?

liabilities and revenues

Posting a transaction means​ ________.

transferring data from the journal to the ledger