Exam 3: Review of a Company S Accounting System

The Oliver Construction Company received $18,000 for six months rental income in advance on November 1, 2015, and credited the Rental Revenue account. The required adjusting entry on December 31, 2015, would include a

Net sales are computed as sales minus sales returns and allowances and purchase discounts.

When you prepare a journal entry, the standard format is to list all

Several transactions for Trolley, Inc. are presented below. The company adjusts its books only at year-end. a. On August 1, the company rented some land from another company for $2,660 for a three- year time period. Trolley charged an expense account on August 1. b. On February 1, Trolley paid $8,000 for a four-year technical service contract. Trolley will receive services evenly throughout the four-year period. The company debited the asset account, Prepaid Service Contract, on February 1. c. On May 1, Trolley loaned $3,400 to another company on a 12%, one-year note. d. The weekly five-day) payroll of Trolley amounts to $2,500. All employees are paid at the close of business each Friday. December 31 falls on a Thursday. Required: Prepare adjusting entries for December 31. Round to the nearest whole dollar.)

The Samuel Company uses the straight-line method to depreciate its equipment. On May 1, 2015, the company purchased some equipment for $224,000. The equipment is estimated to have a useful life of ten years and a salvage value of $20,000. On December 31, 2015, how much depreciation expense should Samuel record for the equipment in the adjusting entry?

Adjusting journal entries are made

When reconciling its accounts, Boris Company found the accounts receivable general ledger account had a balance of $35,000, and the accounts receivable subsidiary ledger account balances totaled $33,000. The most likely reason for this difference was

What is the order in which financial statements should be prepared?

Prior to preparing the organization's financial statements, the accountant prepares

The accountant failed to make the adjusting entry to record the depreciation for the year. This error would cause

An example of a transposition is

Which of the following is true regarding the general journal?

Which statement is true?

Garrison Company has provided you with the following information relating to four transactions during the month of March: a. Garrison acquired $18,000 of office supplies for cash. Office supplies on hand at the beginning of March totaled $3,400, while $2,000 remained at the end of March. b. Garrison pays salaries monthly on the 2nd day of the month. Salaries earned by employees in March totaled $56,000. Salaries owed on March 1 and paid on March 2 totaled $51,000. c. Advance deposits on hand at the beginning of March for work orders to be completed in March and April for customers totaled $75,000. Work completed and delivered during March on those work orders was $35,000. No new advance deposits were received in March. d. Garrison had uncollected account receivables at March 1 totaling $38,000. Collections during March totaled $136,000, which included the entire March 1 receivables balance. New, end-of March billings to customers who bought goods in March on account and will pay in April totaled $40,000. Garrison records operating revenues and expenses on the cash basis during the month. Adjusting entries are recorded monthly, the books are closed at the end of each month, and appropriate reversing entries are prepared as the first entries of each new month. Required: For each of the four transaction information sets a-d), complete the t-accounts below showing 1) the appropriate March 1 balances 2) all changes to the accounts that would be posted during March, including adjusting and closing entries as are appropriate 3) all April 1 reversing entries

On a worksheet, which account will not be extended to the Balance Sheet columns?

Special journals are used to divide accounting tasks, minimize errors, and to keep up-to-date records of customers and suppliers.

The Puzzle Maze Company sells games and puzzles using a perpetual inventory method. The following transactions took place during the month of April. 1 Paid $12,000 in advance for rent. 3 Purchased supplies for the office paying cash in the amount of $1,560. 4 Cash sales in the amount of $3,450 and credit sales of $1,240 were received for puzzles sold. Inventory cost was $2,345 8 Purchased inventory on account in the amount of $2,345. 14 Paid wages of $2,367. The wages had not been previously accrued. 16 Received cash sales in the amount of $1,246; the cost of inventory sold was $623. 24 Paid for the inventory purchased on April 8. 26 Paid the utility bill for $256 and paid for internet access in the amount of $175. 29 Purchased advertising on account in the amount of $650. The advertising charge was for three months, starting May 1. 30 Received cash sales in the amount of $2,450 and credit sales of $3,240 for puzzles sold. Inventory costs were $2,845.

Which of the following transactions would be recorded in a sales journal of the type illustrated in the text?

Which statement is false?

Manny Corporation has an accounting system that includes five journals: the sales, purchases, cash receipts, cash payments, and general journals. The following transactions occurred during the month of May. May 2 Sold merchandise to Tom Smith on account, $80,000, terms 2/10, n/30. 7 Purchased merchandise from the Karen Ruth Company for $11,000, paying cash. 9 Purchased merchandise from Joan Wholesalers on account for $5,500, terms n/30. 11 Received payment from Tom Smith for the $80,000 invoice amount, less the 2% sales discount. 15 Purchased office equipment from Lew Supply Company for $50,000 on account. 16 Made a cash sale of $4,000 to Smithtown distributors. 17 Paid Joan Wholesalers for the $5,500 invoice. 19 Sold land for $9,000 cash. The original cost of the land was $9,900. Required: Prepare in general journal form) the journal entries necessary to record the above transactions in the month of May, and indicate in which special) journal they would have been recorded. Assume that Manny Corporation uses the periodic inventory system.