Exam 2: Recording Business Transactions

Given the following transactions for The Warren Candle Company, prepare a trial balance as of August 31, 2019 a)Owner, Wendy Warren invested $16,000 cash and equipment with a value of $7,500 into the business. b)Purchased supplies on account, $350. c)Rented office space paying one month's rent, $950. d)Performed a service on account, $1,500. e)Purchased a truck by paying $2,000 down and signing a note for the balance of $19,900. f)Performed a service and immediately collected $900 cash. g)Owner, Wendy Warren withdrew $900 for personal use.

A $300 receipt of cash on account was recorded as a $500 debit to cash and a $500 credit to accounts receivable. This error will cause:

A trial balance proves the equality of the debits and credits at the end of the accounting period.

A trial balance is a list of income statement accounts and their balances.

An owner investment of land valued at $20,000 and a building valued at $55,000 into the business would include a:

A chart of accounts is a list of all of a company's accounts with their account numbers.

Given the following transactions in the month of July for Kootenay Outdoor Adventures, prepare journal entries; and, a trial balance and balance sheet as of July 31, 2019. a)Owner, Bill Thompson invested $35,000 cash and equipment with a value of $67,500 into the business. b)Purchased supplies on account, $250. c)Rented office space paying one month's rent, $950. d)Performed guide service on account, $4,500. e)Purchased a truck by paying $4,000 cash and signing a promissory note for the balance of $29,800. f)Performed guiding service and immediately collected $2,900 cash. g)Owner, Bill Thompson withdrew $900 for personal use.

Performing a service for $500 cash and $700 on account would include a:

Post the journal entries to T-accounts and calculate the balance of each account.

If the credit amount of an entry to record the purchase of supplies on account was not posted:

The basic summary device of accounting is the:

State whether the account should be debited or credited and the normal balance of the account for the items listed below: Account Recorded as a debit or credit Normal balance of the account a) Decrease in Accounts payable b) Decrease in Salary expense c) Increase in Withdrawals d) Increase in Capital e) Increase in Supplies f) Decrease in Accounts receivable g) Increase in Note payable h) Increase in Note receivable i) Decrease in Rent expense j) Increase in Land

Incurring an expense in the current accounting period, which is paid in the current accounting period, will require:

The purchase of a building with a down payment of cash and the signing of a note payable for the remainder would include a debit to building and a credit to note payable and to cash.

Incurring an expense in the current accounting period, which will be paid in the following accounting period, will require:

A $100 collection on account was posted as a debit to cash and a credit to accounts payable. This error will cause:

Performing a service on account would include a:

Prepare a trial balance, in good form, based on the following transactions. a. Edward Wilson invested $8,000 cash in his new landscaping business. b. The business paid the first month's rent with $300 cash. c. The business purchased equipment by paying $2,000 cash and executing a note payable for $3,000. d. The business purchased supplies for $200 cash. e. The business billed clients for a total of $1,000 for design services rendered. f. The business received $750 cash from clients for services rendered above. g. The owner took a withdrawal of $2,000. Account Title Debit Credit

Notes receivable is a liability account.

Performing a service for cash would: