Exam 16: Accounting for Business Transactions

On January 1 of the current year, Jimmy's Sandwich Company reported total stockholders' equity of $122,500. During the current year, total revenues were $96,000 while total expenses were $85,500. Also, during the current year the company paid $20,000 in dividends. No other changes in equity occurred during the year. The change in total equity during the year was:

If insurance coverage for the next two years is paid for in advance, the amount of the payment is debited to an asset account called Prepaid Insurance.

Dividends paid to stockholders are not reported on a business's income statement.

Identify the statement below that is true.

Identify the statement below that is correct:

Centurion Co. had the following accounts and balances at December 31: Using the information in the table, calculate the company's reported net income for the period.

At the beginning of January of the current year, Sorrel Co.'s ledger reflected a normal balance of $52,000 for accounts receivable. During January, the company collected $14,800 from customers on account and provided additional services to customers on account totaling $12,500. Additionally, during January one customer paid Mikey $5,000 for services to be provided in the future. At the end of January, the balance in the accounts receivable account should be:

At year-end, a trial balance showed total credits exceeding total debits by $4,950. This difference could have been caused by:

The debt ratio of Braun is 0.9 and the debt ratio of Kemp is 1.0. Based on this information, an investor can conclude:

GreenLawn Co. provides landscaping services to clients. On May 1, a customer paid GreenLawn $60,000 for 6-months services in advance. GreenLawn's general journal entry to record this transaction will include a:

Identify the account below that impacts the equity of a business:

A $15 credit to Sales was posted as a $150 credit. By what amount is the Sales account in error?

Jay's Limo Services paid cash dividends of $100. Which of the following general journal entries will Jay's Limo Services make to record this transaction?

Which of the following is not one of the four steps of processing transactions?

On December 3, the XFL Company paid $1,400 cash in salaries to employees. Prepare the general journal entry to record this transaction.

Willow Rentals purchased office supplies on credit. The general journal entry made by Willow Rentals will include a:

Unearned revenues are classified as liabilities.

________ documents identify and describe transactions and events entering the accounting system.

Identify the statement below that is incorrect.

Identify the accounts that would normally have balances in the debit column of a business's trial balance.