Exam 3: The Accounting Cycle: Capturing Economic Events

[The following information applies to the questions displayed below.] Ceramic Products,Inc.reports these account balances at January 1,2018 (shown in alphabetical order): On January 5,Ceramic Products collected $12,000 of its accounts receivable and paid $11,000 on its note payable. -In a trial balance prepared on January 6,2018,the total of the credit column is:

Master Equipment has a $17,400 liability to Arrow Paint Co.When Master Equipment makes a partial payment of $7,600 on this liability,which of following occurs on Master's books?

Earning revenue increases owners' equity and expenses reduce owners' equity,therefore,revenues are recorded with debit entries and expenses are recorded with credit entries.

[The following information applies to the questions displayed below.] The following transactions occurred during March,the first month of operations for Quality Galleries,Inc.: * Capital stock was issued in exchange for $360,000 cash. * Purchased $180,000 of equipment by making a $60,000 cash down payment and signing a note payable for the balance. * Made a $35,000 cash payment on the note payable from the purchase of equipment. * Sold a piece of equipment for cash of $18,000.The equipment was sold at cost,so there is no gain or loss on the sale. -What is the balance in the Note Payable account at the end of March?

A journal entry to record revenue could include each of the following,except:

The following trial balance of Brian's Pickle Co.for June 30,2018 does not balance. The following errors were discovered: 1.A purchase of supplies for cash was posted as $40 when it should have been $400. 2.The first two numbers of the amount for notes payable were transposed while being copied from the account balance to the trial balance.The correct amount of Notes Payable should be $51,500. 3.A collection of cash was debited to the cash account in the amount of $5,500 but was not credited to the revenue account. 4.A purchase of supplies for $725 on account was not recorded. Instructions: Prepare a corrected trial balance

Matching principle In April,Grinnel Paving,Inc.acquired a large quantity of crushed stone on account with payment due in 90 days.The stone was used in May when Grinnel Paving,Inc.completed a large parking lot for a local shopping center.In early July,Grinnel Paving,Inc.paid the supplier from which the crushed stone had been purchased.In which month should Grinnel Paving,Inc.recognize the cost of the crushed stone as an expense? What accounting principle provides the justification for the answer?

[The following information applies to the questions displayed below.] Indirect Oil Co.reports these account balances at December 31,2017 On January 2,2018,Indirect Oil collected $25,000 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:

The journal entry to record a particular business transaction includes a credit to the Cash account.This transaction is most likely also to include:

A trial balance that is out of balance indicates that:

[The following information applies to the questions displayed below.] The bookkeeper for Wood Mfg.made the following journal entry on January 30,2018: -Before the journal entry above,Wood had assets,liabilities,and owners' equity of $450,000,$100,000,and $350,000,respectively.What are total assets immediately after the above transaction occurs?

[The following information applies to the questions displayed below.] The following entry appears in Galloway Paints general journal on April 23,2018: -This transaction involves:

At the end of October,Flagship Marina received a bill for fuel used in October.Payment is not due until November 30.This transaction:

Steps in the accounting cycle include (1)prepare financial statements, (2)post each journal entry to the appropriate ledger account,and (3)journalize transactions.Which of the following reflects the correct order of these steps?

[The following information applies to the questions displayed below.] The following transactions occurred during March,the first month of operations for Quality Galleries,Inc.: * Capital stock was issued in exchange for $360,000 cash. * Purchased $180,000 of equipment by making a $60,000 cash down payment and signing a note payable for the balance. * Made a $35,000 cash payment on the note payable from the purchase of equipment. * Sold a piece of equipment for cash of $18,000.The equipment was sold at cost,so there is no gain or loss on the sale. -What is the total owners' equity at the end of March?

On June 27,Healthy Life Services,Inc.performed extensive tests on lab specimens submitted by several customers and sent invoices totaling $5,200,due in 30 days.

The left-hand side of an account is used for recording debits and the right-hand side for recording credits.

Journalize and post basic transactions Precision Grading Co.was organized to grade construction sites. * On June 1,owner Dave Precision deposited $90,000 in a new bank account opened in the name of the business in exchange for stock. * On June 3,the company acquired grading equipment costing $89,000,paying $43,000 cash and signing a note payable for the balance. * On June 10,the company paid $13,000 of the amount owed for equipment acquired on June 3. Instructions: Journalize these three transactions and post to the ledger accounts.

Recording transactions in general journal Enter the following transactions in the two-column journal of Baumann Bathrooms.Include a brief explanation of the transaction as part of each journal entry.

An increase in a liability is recorded by a credit;an increase in owners' equity by a debit.