Exam 3: The Accounting Cycle: Capturing Economic Events

[The following information applies to the questions displayed below.] Montauk Oil Co.reports these account balances at December 31,2017 On January 2,2018,Montauk Oil collected $50,000 of its accounts receivable and paid $20,000 of its accounts payable. -In a trial balance prepared at December 31,2017 the total of the debit column is:

Brett Tarek,a manager at D&J Landscaping,Inc.needs information regarding the amount of accounts payable currently owed by the company.This information would most easily be found in the:

Ledger accounts are updated through a process called posting.

When a company uses the double-entry method,the total dollar amount of debits recorded must equal the total dollar amount of credits recorded,but the number of debit and credit entries may differ.

Which of the following errors would be disclosed by preparation of a trial balance?

Which of the following errors would not be disclosed by preparation of a trial balance?

Since most companies update their Retained Earnings balances only once per year,the Retained Earnings balance will always have a $0 balance in the trial balance.

The essential point of a double-entry system of accounting is that every transaction:

Effects of a series of transactions on balance sheet items Clark Plumbing had the following transactions during the month of June,the first month of operations for the business: * The corporation issued 12,000 shares of capital stock to Bill Clark in exchange for his investment of $72,000 cash. * Purchased $36,000 of equipment;made an $8,000 down payment and signed a note payable for the balance. * Made payment of $4,000 on the amount owed for equipment. (A. )Compute the balance in the Cash account at the end of June. (B. )What are the total assets of Clark Plumbing at the end of June? (C. )Compute the balance in the Notes Payable account at the end of June. (D. )What is the total amount of owners' equity at the end of June?

The reason that both expenses and dividends are recorded by debit entries is that:

A CEO or CFO associated with fraudulent financial reporting may be fined,but not imprisoned,under the Sarbanes Oxley Act.

Collection of an accounts receivable:

[The following information applies to the questions displayed below.] The bookkeeper for Wood Mfg.made the following journal entry on January 30,2018: -This transaction involves:

"I was just following orders" is an acceptable defense if you commit an unethical action during an audit.

Revenues increase owners' equity and are,therefore,recorded by crediting the revenues account.

The agreement of the debit and credit totals of the trial balance gives assurance that:

When recording a journal entry,asset accounts are shown first,followed by liabilities,and finally owners' equity accounts.

The sequence of accounting procedures used to record,classify,and summarize accounting information is called the:

A transaction is first recorded in which of the following accounting records?

The purchase of equipment on credit is recorded by a: