FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 13: The Double-Entry Accounting System

Show Answer

Share

---

All types

Filters

Study Flashcards

Question 31

Multiple Choice

Review LaterAdd Note

Review Later

On August 1,Year 1,Bellisa Company issued a $10,000 6%,1-year note to Citizens Bank.Which of the following entries reflects the adjustment required as of December 31,Year 1?

A) $\begin{array} { | l | r | r | } \hline \text { Iriterest Experise } & 600 & \\\hline \text { Iriterest Payable } & & 600 \\\hline\end{array}$
B) $\begin{array} { | l | r | r | } \hline \text { Iriterest Payable } & 600 & \\\hline \text { Iriterest Experise } & & 600 \\\hline\end{array}$
C) $\begin{array} { | l | r | r | } \hline \text { Iriterest Experise } & 250 & \\\hline \text { Notes Payable } & & 250 \\\hline\end{array}$
D) $\begin{array} { | l | r | r | } \hline \text { Iriterest Experise } & 250 & \\\hline \text { Iriterest Payable } & & 250 \\\hline\end{array}$

Correct Answer

verified

Show Answer

Question 32

Multiple Choice

Review LaterAdd Note

Review Later

[The following information applies to the questions displayed below.] The following pre-closing accounts and balances were drawn from the records of Carolina Company on December 31, Year 1: $\begin{array}{lrlr}\text { Cash } & \$ 4,000 & \text { Accounts receivable } & \$ 3,400 \\\text { Dividends } & 2,000 & \text { Common stock } & 3,900 \\\text { Land } & 3,200 & \text { Revenue } & 3,200 \\\text { Accounts payable } & 1,800 & \text { Expense } & 2,200 \\\text { Retained earnings } & 5,900 & &\end{array}$ -What is the amount of net income that will be reported on the Year 1 income statement?

A) $2,200
B) $3,200
C) $1,000
D) $200

Correct Answer

verified

Show Answer

Question 33

Multiple Choice

Review LaterAdd Note

A transaction has been recorded in the T-accounts of Simpson Company as follows: $\begin{array}{cc}\text {Cash }\\\hline\begin{array}{ll|l}&850& \\\end{array}\end{array}$ $\begin{array}{cc}\text { Notes Payable}\\\hline\begin{array}{ll|l}&&850 \\\end{array}\end{array}$ Which of the following could be an explanation for this transaction?

The year for which companies prepare their financial statements is their fiscal year.

Posting is the process of determining the balance in an account by subtracting debits and credits.

The closing entry for the Dividends account would involve which of the following?

[The following information applies to the questions displayed below.] $\begin{array}{|c|l|}\hline \text { Account No. } &{\text { Account Title }} \\\hline(1) & \text { Cash } \\\hline(2) & \text { Service Revenue } \\\hline(3) & \text { Accounts Receivable } \\\hline(4) & \text { Salaries Expense } \\\hline(5) & \text { Dividends } \\\hline(6) & \text { Common Stock } \\\hline(7) & \text { Salaries Payable } \\\hline(8) & \text { Retained Earnings } \\\hline\end{array}$ -Which of the following is a true statement? (Note: A statement may be true even if it does not identify all accounts that appear on that particular financial statement.)

The general journal is a list of a business's accounts and their account numbers.

Which of the following statements is true regarding a trial balance that balances?

What effect will the following closing entry have on the retained earnings account? $\begin{array}{|l|r|r|}\hline \text { Service Revenue } & 18,800 \\\hline \text { Interest Expense } & & 750 \\\hline \text { Operating Expenses } & & 15,500 \\\hline \text { Retained Earnings } & & 2,550 \\\hline\end{array}$

Which of the following statement is true regarding the trial balance?

The Baker Company purchased $1,000 of supplies on account.How would this event be reflected in T-accounts?

Bijan Corporation earned $4,000 of revenue that had been deferred.How would the related adjusting entry be recorded in the company's T-accounts?

An increase to a liability account is recorded with a debit entry.

Explain how the following general journal entry affects the accounting equation. $\begin{array}{|l|r|r|}\hline \text { Accounts Receivable } & 500 & \\\hline \text { Service Revenue } & & 500 \\\hline\end{array}$

A transaction has been recorded in the journal of Davis Company as follows: $\begin{array} { | l | r | r | } \hline \text { Interest Expense } & \mathbf { 8 0 0 } & \\\hline \text { Interest Payable } & & \mathbf { 8 0 0 } \\\hline\end{array}$ Which of the following describes the effect of this transaction on the company's financial statements?

To record the purchase of supplies on account,an accountant would credit Supplies.

[The following information applies to the questions displayed below.] Packard Company engaged in the following transactions during Year 1, its first year of operations: (Assume all transactions are cash transactions.) 1) Acquired $950 cash from the issue of common stock. 2) Borrowed $420 from a bank. 3) Earned $650 of revenues. 4) Paid expenses of $250. 5) Paid a $50 dividend. During Year 2, Packard engaged in the following transactions: (Assume all transactions are cash transactions.) 1) Issued an additional $325 of common stock. 2) Repaid $220 of its debt to the bank. 3) Earned revenues of $750. 4) Incurred expenses of $360. 5) Paid dividends of $100. -Nelson Company began operations on December 1,Year 1.The following transactions and adjustments were recorded in December and posted to the company's ledger accounts: 1) Acquired $9,000 cash from the issue of common stock to its stockholders. 2) Provided services on account for $7,500. 3) Paid $4,500 cash for land. 4) Owed $3,000 of salaries expenses to employees for work done in December that will be paid during January. 5) Purchased $900 of supplies on account to be used in January. 6) Collected $3,900 from customers.

[The following information applies to the questions displayed below.] Packard Company engaged in the following transactions during Year 1, its first year of operations: (Assume all transactions are cash transactions.) 1) Acquired $950 cash from the issue of common stock. 2) Borrowed $420 from a bank. 3) Earned $650 of revenues. 4) Paid expenses of $250. 5) Paid a $50 dividend. During Year 2, Packard engaged in the following transactions: (Assume all transactions are cash transactions.) 1) Issued an additional $325 of common stock. 2) Repaid $220 of its debt to the bank. 3) Earned revenues of $750. 4) Incurred expenses of $360. 5) Paid dividends of $100. -How would the trial balance column totals be affected if a $600 credit to Service Revenue was erroneously posted as a $600 debit to Salaries Expense?

A transaction has been recorded in the T-accounts of Vernon Company as follows: $\begin{array}{cc}\text { Land}\\\hline\begin{array}{ll|l}&10,000& \\\end{array}\end{array}$ $\begin{array}{cc}\text {Cash }\\\hline\begin{array}{ll|l}&&10,000 \\\end{array}\end{array}$ Which of the following reflects how this event affects the company's financial statements? $\begin{array} { | c | c | c | c | c | c | c | c | c | c | c | c | } \hline&&&&&\text { Stk. }&&&&&&\text { Stmt of }\\ &\text { Asset }&=&\text { Liab. }&+&\text { Equity }&\text { Rev. }&-&\text { Exp. }&=&\text { Net Inc. }&\text { Cash Flows }\\\hline A&+&=&+&+&NA&NA&-&NA&=&NA&+FA\\\hline B&+&=&NA&+&+&NA&-&NA&=&NA&-FA\\\hline C&+&=&+&+&NA&NA&-&NA&=&NA&-IA\\\hline D&NA&=&NA&+&NA&NA&-&NA&=&NA&-IA\\\hline\end{array}$