Exam 2: Double-Entry Accounting

On October 1, the accounts receivable account balance was $208,400. During October, $298,500 was collected from customers on account. Assuming the October 31 balance was $125,300, determine the fees billed to customers on account during October.

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

The normal balance of the dividends account is a debit.

A transaction that is recorded in the journal is called a journal entry.

Which of the following abbreviations is correct?

On January 1, Merry Walker and other stockholders established a catering service. Listed below are accounts to use for transactions (a) through (f), each identified by a number. Following this list are the transactions that occurred in Walker's 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. ​

The trial balance is out of balance and the accountant suspects that a transposition or slide error has occurred. What will the accountant do to confirm this suspicion?

When a business receives a bill from the utility company, no entry should be made until the invoice is paid.

A debit signifies a decrease in

The process of transferring the data from the journal to the ledger accounts is called posting.

Complete the following for Wickers Restoration Services. (a) Record the following selected transactions for May in a two-column journal, identifying each entry by number. Explanations may be omitted. (b) Prepare T accounts for each account used and post the journal entries to these accounts, placing the appropriate number to the left of each amount to identify the transactions. (c) Prepare an unadjusted trial balance as of May 31. (d) Determine the net income for May. (e) Determine the retained earnings at the end of May, assuming this was the first month of business. (1) Received $\$ 48,000$ from sale of common stock. (2) Paid rent on office for the month, $\$ 880$ . (3) Purchased supplies on account, $\$ 1,750$ . (4) Earned fees, receiving cash, $\$ 12,600$ . (5) Paid creditor on account, $\$ 1,000$ . (6) Paid automobile expenses for month, $\$ 375$ , and miscell aneous expenses, $\$ 250$ . (7) Paid office salaries for the month, $\$ 3,900$ . (8) Earned fees which the customer will pay next month, $\$ 2,400$ . (9) Determined that the cost of supplies used was $\$ 280$ . (10) Paid dividends, $\$ 2,400$ .

Liabilities are increased with debits and decreased with credits.

The recording of cash receipts to the cash account will be done by debiting the account.

The double-entry accounting system records each transaction twice.

Journalizing transactions using the double-entry bookkeeping system will eliminate fraud.

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. ​ ​

Randomly listed below are the steps for preparing a trial balance: ​ What is the proper order of these steps?

Transactions are initially entered into a record called a journal.

Prepare a journal entry on October 12 for the fees earned on account, $14,600. Omit explanation.