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Exam 4: The General Journal and the General Ledger

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Question 31

Multiple Choice

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The journal entry to record the purchase of equipment for a $100 cash down payment and a balance of $400 due in 30 days would include:

A) a debit to Equipment for $100 and a credit to Accounts Payable for $400.
B) a debit to Equipment for $100 and a credit to Cash for $100.
C) a debit to Equipment for $500, a credit to Cash for $100, and a credit to Accounts Payable for
$400.
D) debit to Equipment for $500 and a credit to Cash for $500.

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Question 32

Multiple Choice

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Which of the following statements is CORRECT?

A) Accounts being debited should always follow the accounts being credited in a compound entry.
B) Compound entries affect more than one debit and/or more than one credit.
C) All transactions require compound entries.
D) Compound entries include only debits.

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Question 33

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Business papers, such as checks, invoices, receipts, letters, and memos, that furnish proof that a transaction has taken place are called:

If a journal entry that contains an error has already been posted, a correcting entry should be journalized and posted.

Bertrand Inc. purchased some shop equipment for $4,500 in cash. By mistake, the journal entry debited the Office Equipment account rather than the Shop Equipment account. What correcting entry would be necessary?

If a journal entry that contains an error has already been posted,

If an error is discovered before the entry is posted, the incorrect amount can be erased and the correct amount recorded.

Determine the accounts and amounts to be debited and credited for the following transactions for Monroe's Auto Repair. A. Marilyn Monroe invested $50,000 in cash to start the firm B. Issued check for $4,000 to pay the rent for current month C. Purchased an automobile that will be used to visit clients; issued check for $32,500 in full payment D. Purchased supplies for $800; paid immediately by check E. Purchased office equipment for $18,500 on credit from Denton, Inc.; received invoice, payable in 30 days F. Performed services for $2,580 in cash G. Returned damaged supplies for a cash refund of $50 H. Issued check for $15,600 to Denton, Inc., as payment on account I. Paid $120 for monthly telephone bill by check J. Withdrew $500 in cash for personal expenses

When an entry is made in the general journal,

Match the description with the accounting terms.

The balance ledger form always shows the current balance of an account.

Maria Sanchez operates a typing service. During the month of July, the first month of operations, the firm had the following transactions. Record these transactions on page 2 of a general journal. Omit the descriptions July 4 Provided services for $3,550 on credit 5 Purchased a new computer for $1,250, issued a check for a $500 down Purchased a new computer for $1,250, issued a check for a $500 down payment, with the balance payable in 30 days 7 Issued a check in the amount of $1,800 to pay a creditor on account 8 Collected $1,000 in cash from credit customers 9 Issued check for $3,000 for the August and September rent

The process of transferring the data from the journal to the general ledger is called:

A ledger is sometimes referred to as a record of original entry.

When a transaction is entered in a general journal, the first account title is indented about half an inch from the left margin of the Description column.

Bertrand Inc. performed services for clients in the amount of $1,350 on credit. If this transaction had been posted in error to the Cash account instead of the Accounts Receivable account, what correcting entry would be necessary?

Indicate how each of the following would be reflected in the journal entry required to record the effects described by using debit or credit to indicate the increase or decrease in each affected account.

The following errors in recording the transactions for December were discovered in the general journal the next month after the data had been posted to the ledger. Record the necessary correcting entries on page 12 of a general journal. Omit the descriptions. Dec. 5 Discovered that a purchase of office equipment for $1,000 cash was recorded as a debit to Shop Equipment and a credit to Cash 10 Discovered that a check for $2,500 to the owner, Hank Rudolph, to pay one month's utilities on his personal apartment was recorded as a debit to Utilities Expense and a credit to Cash 15 Discovered that a receipt of $30,000 cash from a customer for services performed was recorded as a debit to Cash and a credit to Accounts Receivable 20 Discovered that $3,000 for this month's rent was recorded as a debit to Cash and a credit to Prepaid Rent

Lourdes Yabar opened a computer repair business on May 1, 2019. During the first month of operations, the firm had the following transactions. Record these transactions on page 1 of the general journal. Omit the descriptions. Set up a Cash general ledger account and post the appropriate transactions to this account, account 101. 19 Issued Check 104 for $250 to pay for a newspaper advertisement 26 Issued Check 105 for $350 to pay the monthly electric bill 28 Performed services for $600 cash 29 Received $400 on account from credit customers 29 Issued Check 106 for $150 to pay the monthly telephone bill 31 Issued Check 107 for $7,000 to pay a creditor 31 Issued Check 108 for $2,500 to Lourdes Yabar for personal expenses

The journal entry to record the receipt of cash from credit clients would include: