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Exam 2: Analyzing Transactions

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Question 51

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Which of the following owner's equity accounts follows the same debit and credit rules as liabilities?

A) expense accounts only
B) drawing accounts only
C) revenue accounts only
D) expense and drawing accounts

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

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Question 52

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In the chart of accounts, the balance sheet accounts are normally listed in which order?

A) liabilities, assets, owner's equity
B) assets, liabilities, owner's equity
C) owner's equity, assets, liabilities
D) assets, owner's equity, liabilities

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

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Question 53

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Which of the following is true about assets?

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

Which of the following accounts would be increased with a credit?

An account in its simplest form has three parts to it: a title, an increase side, and a decrease side.

On October 17, Nickle Company purchased a building and a plot of land for $750,000. The building was valued at $500,000 while the land carried a value of $250,000. Nickle paid $300,000 down in cash and signed a note payable for the balance. Provide the journal entry for this transaction.

Which of the following is true about T accounts?

Revenue accounts are increased by credits.

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 posting references will be found in the journal entry?

When an account payable is paid with cash, the owner's equity in the business decreases.

A trial balance determines the accuracy of the numbers.

Which of the following is not a useful step in finding errors on the trial balance?

Calculate the following: (a)Determine the cash receipts for April based on the following data: (b)Determine the cash received from customers on account during April based on the following data:

On January 1, Merry Walker established a catering service. Listed below are accounts to use for transactions (a) through (d), each identified by a number. Following this list are the transactions that occurred during the first month of operations. You are to indicate for each transaction the accounts that should be debited and credited by placing the account number (s) in the appropriate box. 1.Cash 2.Accounts Receivable 3.Supplies 4.Prepaid Insurance 5.Equipment 6.Truck 7.Notes Payable 8.Accounts Payable 9.Merry Walker, Capital 10.Merry Walker, Drawing 11.Fees Earned 12.Wages Expense 13.Rent Expense 14.Utilities Expense 15.Truck Expense 16.Miscellaneous Expense​

Several transactions are listed below, with the accounting equation stated to the right side of each. Use the following identification codes to indicate the effects of each transaction on the accounting equation. Write your answers in the space provided under the accounting equation. You need an identification code for each element of the accounting equation. An example is given before the first transaction.I-IncreaseD-DecreaseNE-No Effect​​ ​​​

Which of the following groups of accounts is increased with a debit?

Prepaid expenses are an example of an expense.

For a month's transactions for a typical medium-sized business, the accounts payable account is likely to have only credit entries.

When an account receivable is collected in cash, the total assets of the business increase.