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Exam 2: The Recording Process

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Question 41

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The double-entry system is a logical method for recording transactions and results in equal amounts for debits and credits for each transaction.

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Question 42

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The procedure of transferring journal entries to the ledger accounts is called

A) journalizing.
B) analyzing.
C) reporting.
D) posting.

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Question 43

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A list of accounts and their balances at a given time is called a(n)

An accounting record of the balances of all assets liabilities and owner's equity accounts is called a

The chart of accounts used by Notwist Copy Company is listed below. You are to indicate the proper accounts to be debited and credited for the following transactions by writing the account number(s) in the appropriate boxes.

The recording process occurs

A chart of accounts usually starts with

On July 7 2016 Rancho Realty Co. performed cash services of $1900. The entry to record this transaction would include

The ledger accounts of the Flex Gym at June 30 2016 are shown below: Instructions Prepare a trial balance with the ledger accounts arranged in the proper financial statement order. Include the appropriate heading.

A trial balance may balance even when each of the following occurs except when

On January 14 Maxine Industries purchased supplies of $900 on account. The entry to record the purchase will include

Which of the following journal entries is recorded correctly and in the standard format? a. $\begin{array}{lr}\text { Salaries and Wages Expense } & 500 & \\\text { Cash } && 2,500\\ \text { Advertising Expense } & 2,000 \\\end{array}$ b. $\begin{array}{lr}\text { Salaries and Wages Expense } && 500 & \\ \text { Advertising Expense } && 2,000 \\\text { Cash } & 2,500\\\end{array}$ c. $\begin{array}{lr}\text { Cash } & 2,500\\\text { Salaries and Wages Expense } && 500 & \\ \text { Advertising Expense } && 2,000 \\\end{array}$ d. $\begin{array}{lr} \text { Salaries and Wages Expense } & 500 & \\ \text { Advertising Expense } & 2,000 & \\ \text { Cash } & & 2,500\end{array}$

The trial balance of Red House Painters shown below does not balance. $\begin{array}{c} \text { RED HOUSE PAINTERS}\\ \text { Trial Balance}\\ \text { June 30,2016}\\\\\begin{array}{lrr}&\text { Debit }&\text { Credit }\\ \text { Cash } &\$2,780\\ \text {Accounts Receivable } &7,420\\ \text { Supplies. } 600\\ \text { Equipment. } &8,300\\ \text { Accounts Payable } &&\$9,777\\ \text {Owner's Capital } &&1,952\\ \text {Owner's Drawings } &1,300\\ \text { Service Revenue. } &&15,200\\ \text { Salaries and Wages Expense } 3,800\\ \text {Maintenance and Repairs Expense } &1,600\\ \text { Totals } &\$25,800&\$26,929\\\end{array}\end{array}$ An examination of the ledger and journal reveals the following errors: 1. Each of the above listed accounts has a normal balance per the general ledger. 2. Cash of $270 received from a customer on account was debited to Cash $720 and credited to Accounts Receivable $720. 3. A withdrawal of $400 by the owner was posted as a credit to Owner's Drawings $400 and credit to Cash $400. 4. A debit of $300 was not posted to Salaries and Wages Expense. 5. The purchase of equipment on account for $700 was recorded as a debit to Repair Expense and a credit to Accounts Payable for $700. 6. Services were performed on account for a customer $510 for which Accounts Receivable was debited $510 and Service Revenue was credited $51. 7. A payment on account for $235 was credited to Cash for $235 and credited to Accounts Payable for $253. Instructions Prepare a correct trial balance.

Transactions are recorded in alphabetic order in a journal.

For the accounts listed below indicate if the normal balance of the account is a debit or credit. $\begin{array}{lrr}&\text {Normal Balance}\\ \underline{\text { Accounts }}& \underline{\text { Debit or Credit}}\\ \text { 1. Service Revenue} &\underline{\quad\quad\quad\quad}\\ \text {2. Rent Expense } &\underline{\quad\quad\quad\quad}\\ \text { 3. Accounts Receivable } &\underline{\quad\quad\quad\quad}\\ \text { 4. Accounts Payable} &\underline{\quad\quad\quad\quad}\\ \text { 5. Owner's Capital } &\underline{\quad\quad\quad\quad}\\ \text {6. Supplies } &\underline{\quad\quad\quad\quad}\\ \text { 7. Insurance Expense } &\underline{\quad\quad\quad\quad}\\ \text {8. Owner's Drawings } &\underline{\quad\quad\quad\quad}\\ \text { 9. Buildings } &\underline{\quad\quad\quad\quad}\\ \text { 10. Notes Payable} &\underline{\quad\quad\quad\quad}\\\end{array}$

TNT has the following transactions during April of the current year. Indicate (a) the effect on the accounting equation and (b) the debit-credit analysis. Apr. 1 Opens a law office investing $25000 in cash. 4 Pays rent in advance for 6 months $9000 cash. 16 Receives $8000 from clients for services provided. 27 Pays secretary $2800 salary.

Match the basic step in the recording process described by each of the following statements.

The first step in the recording process is to

The primary purpose of a trial balance is to prove the mathematical equality of the debits and credits after posting.

A simple journal entry requires only one debit to an account and one credit to an account.