Exam 3: The Double-Entry Accounting System

The following is a trial balance of Barnhart Company as December 31,Year 1: What is the total amount of assets that will be reported on the balance sheet prepared as of December 31,Year 1?

Warren Company began the accounting period with a $32,000 debit balance in its accounts receivable account.During the accounting period,the company recorded revenue on account amounting to $88,000.The accounts receivable account at the end of the accounting period contained a $16,000 debit balance.Based on this information,what is the amount of cash collected from customers during the period?

On November 1,Year 1,Shumate Company paid $1,200 in advance for an insurance policy that covered the company for six months.Which of the following will be included in the adjustment required on December 31,Year 1?

What is the term that is used to describe the difference between the total debit and credit amounts in a T-account?

An adjusting entry can never be an asset exchange transaction.

Wichita,Inc.reported the following amounts on its financial statements prepared as of the end of the current accounting period: -What is the company's return-on-assets ratio?

A business's chart of accounts is prepared to verify the equality of debits and credits.

The Baker Company purchased $1,000 of supplies on account.How would this event be reflected in T-accounts?

Which of the following statements regarding credit entries is true?

Debits decrease asset accounts.

An increase to a liability account is recorded with a debit entry.

The year for which companies prepare their financial statements is their fiscal year.

A transaction has been recorded in the journal of Davis Company as follows: Which of the following describes the effect of this transaction on the company's financial statements?

The entry to record revenue earned on account includes a debit to accounts receivable and a credit to revenue.

A transaction has been recorded in the T-accounts of Powell Corporation as follows: Which of the following reflects how this event affects the company's financial statements?

Source documents provide information that serves as the basis for entries into the accounting system.Examples of source documents include invoices and deposit tickets.

The adjusting entry to record expense related to the use of a delivery van would involve which of the following?

The trial balance of Barger Company at the end of the accounting period,immediately prior to recording closing entries,showed the following: What will the balance of the retained earnings account be after the closing entries are recorded?

During Year 5,Magellan Corporation earned net income of $32,000 and paid cash dividends of $8,500 to its stockholders.Which of the following choices reflects the effect of closing entries on the company's financial statements?

A transaction has been recorded in the general journal of Manella Company as follows: Which of the following could be an explanation for this transaction?