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Exam 2: Analyzing Transactions

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Question 31

Multiple Choice

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Richardson Company has a condensed income statement as shown.​ Using horizontal analysis, calculate the amount and percent change for sales. Round to one decimal place.

A) $(17,000) , (11.3%)
B) $(15,500) , (10.3%)
C) $(18,000) , (10.9%)
D) $(15,500) , (9.4%)

E) B) and D)
F) A) and C)

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Question 32

True/False

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When an owner invests assets in the business, the capital account increases due to revenue being earned.

A) True
B) False

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Question 33

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Revenues are equal to the difference between cash receipts and cash payments.

On November 1, Nickle Company made a cash payment of $200,000 on a note payable that was generated in the purchase of a building and land. Provide the journal entry for this transaction.

Which of the following entries records the receipt of cash from clients on account?

A notation in the Post. Ref. column of the general journal indicates that the amount has been posted to the ledger.

The order of the flow of accounting data is (1) record in the ledger, (2) record in the journal, and (3) prepare the financial statements.

Several types of errors can be made during the journalizing and posting process. Match the following with their best description. -Debit or credit posting omitted

Which of the following accounts are debited to record increases?

Which of the following entries records the payment of a bill for your insurance premium?

The following errors took place in journalizing and posting transactions: a. A withdrawal of $5,000 by Stan Norton, owner of the business, was recorded as a debit to Office Expense and a credit to Cash. b. An accounts receivable payment for $7,800 was recorded as a debit to Cash and a credit to Fees Earned. ​ Journalize the entries to correct the errors. Omit the explanations.

A debit may signify a (n)

An account is said to have a debit balance if

On September 1, Erika Company purchased land for $47,500 cash. Provide the journal entry for this transaction.

Match each of the following accounts with its proper account group from the groups listed below. ​ -Prepaid Insurance

Which of the following is an internal report that will determine if debit balances equal credit balances in the ledger?

The posting reference notation used in the ledger is the account number.

The accounts in the ledger of Monroe Entertainment Co. are listed below. All accounts have normal balances.?? $\begin{array} { l r l r } \text { Accounts Payable } & \$ 1,500 & \text { Fees Earned } & \$ 3,600 \\\text { Accounts Receivable } & 1,800 & \text { Insurance Expense } & 1,300 \\\text { Prepaid Insurance } & 2,000 & \text { Land } & 3,000 \\\text { Cash } & 3,200 & \text { Wages Expense } & 1,400 \\\text { Drawing } & 1,200 & \text { Capital } & 8,800\end{array}$ Prepare a trial balance. The total of the debits is a. $13,900 b. $11,200 c. $12,700 d. $9,700

The chart of accounts for Corning Company includes the following: $\begin{array} { | l | c | } \hline{ \text { Account Name } } & \text { Account Number } \\\hline \text { Cash } & 11 \\\hline \text { Accounts Receivable } & 13 \\\hline \text { Prepaid Insurance } & 15 \\\hline \text { Accounts Payable } & 21 \\\hline \text { Unearned Revenue } & 24 \\\hline \text { Corning Capital } & 31 \\\hline \text { Corning Drawing } & 32 \\\hline \text { Fees Earned } & 41 \\\hline \text { Salaries Expense } & 54 \\\hline \text { Rent Expense } & 56 \\\hline\end{array}$ ? Page 3 of the journal contains the following entry: Prepaid Insurance........1,530 Cash.............................1,530 -What is the posting reference that will be found in the prepaid insurance account?

Several types of errors can be made during the journalizing and posting process. Match the following with their best description. -Wrong amount posted to an account