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Exam 2: The Recording Process

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Question 71

Multiple Choice

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The right side of an account

A) is the correct side.
B) reflects all transactions for the accounting period.
C) shows all the balances of the accounts in the system.
D) is the credit side.

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Question 72

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The trial balance will not balance when incorrect account titles are used in journalizing or posting.

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Question 73

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Which of the following journal entries is recorded correctly and in the standard format?

An account is an important accounting record where financial information is stored until needed. Briefly explain (1) the nature of an account, (2) the different types of accounts, and (3) the manner in which an account is increased and decreased and its normal balance.

An accounting record of the balances of all assets, liabilities, and equity accounts is called

During February 2014, its first month of operations, the owner of Alona Enterprises invested cash of $75,000. Alona had cash revenues of $12,000 and paid expenses of $21,000. Assuming no other transactions impacted the cash account, what is the balance in Cash at February 28?

John Dough, a fellow employee, wants to understand the basic steps in the recording process. Identify and briefly explain the steps in the order in which they occur.

Prepare a trial balance from the ledger accounts of Attica Company as of January 31, 2014.

One difference between GAAP and IFRS is that

Each transaction must be analyzed in terms of its effect on the accounts before it can be recorded in a journal.

Identify the accounts to be debited and credited for each of the following transactions. 1. The owners invested $10,000 cash in the business in exchange for ordinary shares. 2. Purchased supplies on account for $1,000. 3. Billed customers $2,000 for services performed. 4. Paid salaries of $900.

In recording business transactions, evidence that an accounting transaction has taken place is obtained from

The final step in the recording process is to transfer the journal information to the

After transaction information has been recorded in the journal, it is transferred to the

When the volume of transactions is large, recording them in tabular form is more efficient than using journals and ledgers.

The recording process occurs

The normal balance of an expense is a credit.

In the first month of operations for Widget Industries, the total of the debit entries to the cash account amounted to ₤9,000 (₤5,000 investment by the owners and revenues of ₤4,000) . The total of the credit entries to the cash account amounted to ₤5,000 (purchase of equipment ₤2,000 and payment of expenses ₤3,000) . At the end of the month, the cash account has a(n)

Under U.S. GAAP

Errors on the statement of financial position are called transpositions and errors on the income statement are called irregularities.