Exam 16: Accounting for Business Transactions

Jason Hope opened a hotel. Prepare journal entries to record the following transactions. Hope uses the accounts Room Rental Revenue and Event Revenue. All expenses for special events are recorded as Event Expense. (Omit explanations.)

Identify the account used by businesses to record the transfer of assets from a business to its stockholders:

When a company bills a customer for $700 for services performed, the journal entry to record this transaction will include a $700 debit to Services Revenue.

Unearned revenues are generally:

Sarah's Paralegal 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 in advance from a client for services to be performed in March. Prepare journal entries to record the above transactions. Explanations are not necessary.

Andrea Apple opened Apple Photography on January 1 of the current year. During January, the following transactions occurred and were recorded in the company's books: 1. Andrea invested $13,500 cash in the business in exchange for common stock. 2) Andrea contributed $20,000 of photography equipment to the business. 3) The company paid $2,100 cash for an insurance policy covering the next 24 months. 4) The company received $5,700 cash for services provided during January. 5) The company purchased $6,200 of office equipment on credit. 6) The company provided $2,750 of services to customers on account. 7) The company paid cash of $1,500 for monthly rent. 8) The company paid $3,100 on the office equipment purchased in transaction #5 above. 9) Paid $275 cash for January utilities. Based on this information, the amount reported as total stockholders' equity on the balance sheet at month-end would be:

At year-end, Henry Laundry Service noted the following errors in its trial balance: 1. It understated the total debits to the Cash account by $500 when computing the account balance. 2. A credit sale for $311 was recorded as a credit to the revenue account, but the offsetting debit was not posted. 3. A cash payment to a creditor for $2,600 was never recorded. 4. The $680 balance of the Prepaid Insurance account was listed in the credit column of the trial balance. 5. A $24,900 van purchase was recorded as a $24,090 debit to Equipment and a $24,090 credit to Notes Payable. 6. A purchase of office supplies for $150 was recorded as a debit to Office Equipment. The offsetting credit entry was correct. 7. An additional investment of $4,000 by stockholders was recorded as a debit to Common Stock and as a credit to Cash. 8. The cash payment of the $510 utility bill for December was recorded (but not paid) twice. 9. The revenue account balance of $79,817 was listed on the trial balance as $97,817. 10. A $1,000 cash dividend was recorded as a $100 debit to Dividends and $100 credit to cash. Using the form below, indicate whether each error would cause the trial balance to be out of balance, the amount of any imbalance, and whether a correcting journal entry is required.

A record containing all the separate accounts for a company as well as all of their balances is called the________

The four categories of equity accounts are ________, ________, ________, and ________.

Neither U.S. GAAP nor IFRS require the use of accrual basis accounting.

Alicia Tax Services paid $500 to settle an account payable. Which of the following general journal entries will Alicia Tax Services make to record this transaction?

If cash is received from customers in payment for services that have not yet been performed, the business would record the cash receipt as:

Cloud Solutions had the following accounts and balances as of December 31: Using the information in the table, calculate the total assets reported on the balance sheet for the period.

________ and ________ are the starting points for the analyzing and recording process.

A credit is used to record an increase in all of the following accounts except:

The same four basic financial statements are prepared by both U.S. GAAP and IFRS.

Dividends are subtracted on the income statement as a business expense.

Identify which error will cause the trial balance to be out of balance.

The fourth step in the analyzing and recording process is to transfer (or post) entries from the journal to the ________.

A company's ledger is: