Exam 3: The Accounting Information System

Which of the following statements is true?

At June 1, 2014, Massoth Industries had an Accounts Receivable balance of $18,000. During the month, the company had credit sales of $25,000 and collected Accounts Receivable of $27,000. What is the balance in Accounts Receivable at June 30, 2014?

Which one of the following is not a part of an account?

If expenses are paid in cash, then

Barnes Company showed the following balances at the end of its first year: Cash \ 14,000 Prepaid insurance 700 Accounts receivable 3,500 Accounts payable 2,800 Notes payable 4,200 Common stock 5,400 Dividends 700 Revenues 24,000 Expenses 17,500 Mc. 141 (count) What did Barnes Company show as total credits on its trial balance?

At September 1, 2014, Kern Enterprises reported a cash balance of $70,000. During the month, Kern collected cash of $30,000 and made disbursements of $50,000. At September 30, 2014, the cash balance is

At October 1, 2014, Metz Industries had an Accounts Payable balance of $70,000. During the month, the company made purchases on account of $50,000 and made payments on account of $80,000. At October 31, 2014, the Accounts Payable balance is

The principal purpose of posting is to

Which of the following accounts has a normal debit balance?

Some of the following errors would cause the debit and credit columns of the trial balance to have unequal totals. For each of the four cases, state whether the error would cause unequal totals in the trial balance. If the error causes unequal totals, indicate the amount of difference between the columns and state whether the debit or credit is larger. Each case is to be considered independently of the others. 1. A collection on account of $400 was journalized and posted as a debit to Cash $400 and a credit to Service Revenue $400. 2. A $950 purchase of supplies on account was recorded as a debit of $950 to Equipment and a credit of $950 to Accounts Payable. 3. A purchase of equipment for $3,500 on account was not recorded. 4. A $270 receipt on account was recorded as a $720 debit to Cash and a $270 credit to Accounts Receivable.

A journal is not useful for

Transactions are entered in the ledger accounts and then transferred to journals.

An increase in an asset is recorded by a debit.

Borrowing money and issuing shares of stock are

The normal balance of the dividend account is a credit.

European companies rely

When a service has been performed, but no cash has been received, which of the following statements is true?

Prepaid expenses are assets.

The entire group of accounts maintained by a company is referred to collectively as the journal.

Assets are decreased with a credit.