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Exam 2: Analyzing Transactions

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Question 71

True/False

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Consuming goods and services in the process of generating revenues results in expenses.

A) True
B) False

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verified

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Question 72

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Accounts payable are accounts that you expect will be paid to you.

A) True
B) False

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Question 73

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Analyze the following transactions as to their effect on the accounting equation. Some of the possible effects of a transaction on the accounting equation are listed below: Put the appropriate letter next to each transaction.

Debits will increase Unearned Revenues and Revenues.

Which of the following errors will cause the trial balance totals to be unequal?

On June 1, the cash account balance was $96,750. During June, cash receipts totaled $305,000 and the June 30 balance was $75,880. Determine the cash payments made during June.

The accounts in the ledger of Monroe Entertainment Co. are listed in alphabetical order. All accounts have normal balances. $\begin{array}{llll}\text { Accounts Payable } & 1,500 & \text { Fees Earned } & 3,600 \\\text { Accounts Receivable } & 1,800 & \text { Insurnce Expense } & 1,300 \\\text { Prepaid Insurance } & 2,000 & \text { Land } & 3,000 \\\text { Cash } & 3,200 & \text { Wages Expense } & 1,400 \\\text { Drawing } & 1,200 & \text { Capital } & 8,800\end{array}$ Prepare a trial balance. The total of the debits is

$\begin{array} { | l | l | c | l | l | l | } \hline \text { May } & 24 & \text { Land } & & 105,000 & \\\hline & & \text { Cus } & & & 105,000 \\\hline & & \text { Purchased land for business } & & & \\\hline & & & & & \\\end{array}$ What effects does this journal entry have on the accounts?

Which of the following entries records the collection of cash from cash customers?

Which of the following describes the classification and normal balance of the fees earned account?

Revenue should be recognized when

Which of the following is not a correct rule of debits and credits?

$\begin{array}{|l|l|l|l|l|l|}\hline \text { April } & 14 & \text { Equipment } & & 15,000 & \\\hline & & \text { Cash } & & & 5,000 \\\hline & & \text { Note Payable } & & & 10,000 \\\hline & & \text { ????????? } & & & \\\hline & & & & & \\\end{array}$ Which is the best explanation for this journal entry?

Supplies purchased on account were incorrectly recorded as Office Equipment. The correcting entry would be

The payment for the monthly rent will require the following entry

The cash account will always be debited.

The chart of account for the Corning Company includes some of the following accounts: $\begin{array}{|l|l|}\hline \text { Account Name } & \text { Account Number } \\\hline \text { Cash } & 11 \\\hline \text { Accounts Receivable } & 13 \\\hline \text { Prepaid Insurance } & 15 \\\hline \text { Accounts Payable } & 21 \\\hline \text { Unamed Revenue } & 24 \\\hline \text { Corning, Capital } & 31 \\\hline \text { Corning, Drawing } & 32 \\\hline \text { Fees Earned } & 41 \\\hline \text { Salaries Expense } & 54 \\\hline \text { Rent Expense } & 56 \\\hline & \\\end{array}$ On the journal page 3, the following transaction was found: $\begin{array} { | l | l | l | } \hline \text { Prepaid Insuranse } & 1,530 & \\\hline \text { Cash } & & 1,530 \\\hline & &\end{array}$ What is the post reference that will be found on the journal entry?

The classification and normal balance of the accounts payable account is

Which of the following will increase owner's equity?

Journal entries can have more than two accounts as long as the debits equal the credits.