Fundamentals of Financial Accounting Assignment -
Multiple Choices - Identify the choice that best completes the statement- or answers the question.
Q1. The normal balance of a capital account
a. can be either a debit or a credit balance.
b. is a debit balance.
c. is a credit balance.
d. is called a footing.
Q2. Because the first formal accounting record of a transaction is made in a journal from source document information, a journal is commonly referred to as a(n)
a. ledger.
b. account.
c. cross-reference.
d. book of original entry.
Q3. The item column in the general ledger is used for
a. account titles.
b. the balance of account.
c. a description of special entries.
d. footings.
Q4. Cash is used to pay for a car for personal use by the owner. The transaction includes
a. debiting Cash and crediting Drawing.
b. debiting Drawing and crediting Cash.
c. debiting Capital and crediting Cash.
d. debiting Car Expense and crediting Cash.
Q5. The payment of a telephone bill for the month would include
a. debiting Capital and crediting Accounts Payable.
b. debiting Cash and crediting Telephone Expense.
c. debiting Telephone Expense and. crediting Accounts Payable.
d. debiting Telephone Expense and crediting Cash.
Problems -
Q6. Analyze the following transactions using the T account approach. Place the dollar amounts on the debit and credit sides. Indicate next to each entry the number for that transaction. After all transactions have been recorded, foot the accounts where necessary and enter the balance in the proper place for each account.
1. Nick Bowman invested cash of $12,000 in the business.
2. Received and paid utility bill of $125.
3. Bought $300 of supplies on account.
4. Sold services worth $2,500 to customers on account.
5. Received cash payment of $800 from credit customers.
Analyze the following transactions using the T account approach -
- Cash
- Accounts Receivable
- Supplies
- Accounts Payable
- Owner's Capital
- Utilities Expense
- Revenue
Q7. Record the following transactions in, the T accounts below. Indicate next to each entry the number for that transaction. After all transactions have been recorded, foot the accounts where necessary and enter the balances in the proper places. Prepare a trial balance for Douglas Distinctive Services as of December 31, 20--.
1. Mr. Douglas invested $25,000 cash in the business.
2. Purchased equipment worth $7,000 with a $500 down payment. The remainder is due in 30 days.
3. Paid $900 cash for a six-month insurance policy.
4. Received $3,000 cash from customers for services rendered.
5. Paid wages, $1,750.
6. Received and paid advertising bill of $100.
7. Performed services worth $2,500 for credit customers.
8. Received $1,700 cash from customers previously billed on account.
9. Mr. Douglas withdrew $5,300 cash for personal use
10. Paid utility bill, $205.
Record the following transactions in, the T accounts -
- Cash
- Accounts Receivable
- Prepaid Insurance
- Equipment
- Accounts Payable
- Douglas, Capital
- Douglas, Drawing
- Repair Fees
- Wages Expense
- Advertising Expense
- Utilities Expense
Q8. The accounts below all have not mal balances. Prepare a trial balance for Alana's Florist Shop as of September 30, 20--.
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Service Fees
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$40,650
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Accounts Receivable
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18,000
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Rent Expense
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3,700
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Utilities Expense
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1,400
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Alana, Capital
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42,100
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Alana, Drawing
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2,700
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Wages Expense
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18,300
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Equipment
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35,000
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Supplies
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4,400
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Accounts Payable
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10,400
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Prepaid Insurance
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1,600
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Cash
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8,050
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Q9. Prepare general journal entries to record the following transactions. Omit the explanations after each entry.
Mar. 1 J. Lynch invested in a neighborhood movie house. Land, $100,000; building, $400,000; and equipment, $50,000; totaling $550,000.
Mar. 2 Rental expense for the movies shown for the month, $6,000 on, account.
Mar. 5 Ticket sales for the month, $22,000 cash.
Mar. 8 Wages paid for the month, $11,000.
Mar. 12 Purchased a new popcorn machine, $3,300 on account.
Mar. 17 Paid monthly fee to maintenance company, $2,700.
Mar. 23 Rented the theater to an organization for a night. Billed them $2,300.
Mar. 30 Paid $600 on the amount owed for the new popcorn machine.
Q10. The following transactions occurred at Forever Green Lawn Service. Identify which account would be debited and credited to record each transaction. Write the identifying letters in the proper columns. The first transaction has been completed as an example.
A. Cash
B. Accounts Receivable
C. Supplies
D. Equipment
E. Accounts Payable
F. Fees Income
G. Rent Expense
H. Salaries Expense
I. Telephone Expense
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Debit
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Credit
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Ex. Issued a check for monthly rent.
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G
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A
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1. Purchased supplies on account.
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2. Purchased new equipment, issuing a check for a down payment, with balance due in thirty days.
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3. Provided services on account.
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4. Purchase supplies for cash.
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5. Issued a check to pay a creditor on account.
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6. Collected payment from credit customer.
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7. Issued checks to pay employees their monthly salaries.
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8. Performed services for cash.
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9. Received cash for damaged supplies returned.
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10. Issued a check to pay the telephone bill.
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Q11. George Smyth opened a computer repair business on Apr. 1, 20--. During the first month of operations, the firm had the following transactions. Record these transactions on page 1 of the general journal. Omit explanations. Post appropriate transactions to the general ledger.
Apr. 1 George Smyth invested $30,000 cash in the business.
Apr. 2 Paid rent for April, $2,100.
Apr. 8 Bought equipment for $12,000 and issued a check for $3,000 as a down payment.
Apr. 12 Performed services for $3,200 in cash, and $1,200 on credit.
Apr. 19 Paid electric bill, $225.
Apr. 25 Received $900 on account from credit customers.
Completion - Complete each statement.
Q12. To increase a liability account will require a(n) ________ to the account.
13. To ________ an account means to enter an amount on the right side of the account.
14. A list of all accounts (account titles) used by a business is called a(n) ________ .
15. A(n) ________ occurs when debit or credit amounts move a digit or two to the left or right when entered.
16. A(n) ________ can be prepared daily, weekly, Monthly, or whenever desired to prove the equality of the debits and credits in the ledger accounts.
Matching - Match the terms with the definitions:
a. book of original entry
b. chart of accounts
c. compound entry
d. correcting entry
e. cross-reference
f. four-column account
g. general ledger
h. journal
i. journalizing
j. posting
k. ruling method
l. slide error
m. source document
n. transposition error
o. trial balance
Q17. Occurs when debit or credit amounts move a digit or two to the left or right when entered.
Q18. Entering the transactions in a journal.
Q19. A day-by-day listing of the transactions of a business.
Q20. The process of copying the debits and credits from the journal to the ledger accounts.
Q21. Used to prove the equality of the debits and credits in the ledger accounts.