Exam 2: Accounting System and Financial Statements

A trial balance that is in balance is proof that no errors were made in journalizing the transactions,posting to the ledger,and preparing the trial balance.

The general ledger of a business:

A company paid $2,500 cash to satisfy a previously recorded account payable,the only liability on the books.Assume the company had a $4,000 balance in Cash immediately prior to this transaction.Set up the necessary T-accounts below and show how this transaction would be recorded directly in those accounts.Show ending account balances.

On November 30,a company had an Accounts Receivable balance of $5,100.During the month of December,total credits to Accounts Receivable were $76,000 from customer payments.The 31 Accounts Receivable balance was $43,000 on December 31.What was the amount of credit sales during December?

Which of the following situations would result in a trial balance that does not balance?

Unearned revenue is classified as _______________ that is satisfied by delivering products or services in the future.

The purchase of supplies on credit should be recorded with a debit to Supplies and a credit to Accounts Payable.

The accounting process begins with:

Flora Accounting Services completed these transactions in February: a.Purchased office supplies on account,$300. b.Completed work for a client on credit,$500. c.Paid cash for the office supplies purchased in (a). d.Completed work for a client and received $800 cash. e.Received $500 cash for the work described in (b). f.Received $1,000 from a client for accounting services to be performed in March. Prepare journal entries to record the above transactions.Explanations are not necessary.

A company failed to post a $50 debit to the Office Supplies account.The effect of this error will be that the:

Nancy O'Rode starts a consulting business called EducateMe.On May 1,the company paid $1,200 cash for six months of insurance coverage beginning on June 1.How would EducateMe record this transaction?

What is another name for the general journal?

Carl's Carpentry purchased $10,000 of land and a building for $40,000.The company paid $20,000 cash and signed a long-term note for the amount still owed.How would the company record this transaction?

Which of the following statements is correct?

David Roberts is a real estate appraiser.Shown below are (a) several accounts in his ledger with each account preceded by an identification number and (b) several transactions completed by Roberts.Indicate the accounts debited and credited when recording each transaction by placing the proper account identification numbers to the right of each transaction.

Revenues and expenses are two categories of ____________________ accounts.

Explain debits and credits and their role in the accounting system.

List the steps in processing transactions.

If the Debit and Credit column totals of a trial balance are equal,then:

The balances for the accounts of Lance's Consulting Firm,Inc.for the year ended December 31 are shown below.Each account shown had a normal balance. -Calculate net income.