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Exam 2: The Accounting Information System

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Question 41

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External events include all of the following except:

A) Paying employees' salaries.
B) Purchasing equipment.
C) Using office supplies.
D) Collecting an account receivable.

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Question 42

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For each of the following accounts,indicate whether we use a debit or a credit to increase the balance of the account. (a)Accounts Receivable (b)Accounts Payable (c)Salaries Expense (d)Service Revenue (e)Supplies (f)Common Stock (g)Advertising Expense (h)Dividends

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(a)debit; (b)credit;...

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Question 43

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Paying employees' salaries for the current period is recorded with a debit to Salaries Expense.

The following transactions occur for the Hamilton Manufacturers. (a)Provide services to customers on account for $4,500. (b)Purchase equipment by signing a note with the bank for $10,000. (c)Pay advertising of $1,500 for the current month.

Amounts owed from customers are recorded in the Accounts Receivable account.

Providing services to customers is recorded with a debit to Service Revenue.

Amounts owed to suppliers for supplies purchased on account are defined as:

Which of the following accounts would normally have a debit balance?

Schooner Inc.purchased equipment by signing a note payable.This transaction would be recorded as:

When cash payments are made to stockholders,what is the effect on the company's accounts?

Following are transactions of Gotebo Tanners,Inc.,a new company,during the month of January 2012: 1.Issued 10,000 shares of common stock for $15,000 cash. 2) Purchased land for $12,000,signing a note payable for the full amount. 3) Purchased office equipment for $1,200 cash. 4) Received cash of $14,000 for services provided to customers during the month. 5) Purchased $300 of office supplies on account. 6) Paid employees $10,000 for their first month's salaries. What was the total amount of Gotebo's liabilities following these six transactions?

A company receives a $50,000 cash deposit from a customer on October 15 but will not provide services until November 20.Which of the following statements is true?

When a company pays $2,500 dividends to its stockholders,the transaction should be recorded as:

Pumpkin Inc.sold $500 in pumpkins to a customer on account on January 1.On January 11 Pumpkin collected the cash from that customer.What is the impact on Pumpkin's accounting equation from the collection of cash?

A company purchases a building for $100,000,paying $20,000 cash and signing a note payable for the remainder.Record the transaction.

Consider the following list of accounts: $\begin{array} { l l } \text { Cash } & \text { Retained Earnings } \\\text { Service Revenue } & \text { Utilities Expense } \\\text { Salaries Expense } & \text { Accounts Receivable } \\\text { Accounts Payable } & \text { Common Stock } \\\text { Equipment } & \text { Dividends }\end{array}$ How many of these accounts have a normal debit balance?

The Accounts Payable account has a beginning balance of $12,000 and the company purchased $50,000 of supplies on account during the month.The ending balance was $10,000.How much did the company pay to creditors during the month?

The process of transferring the debit and credit information from the journal to individual accounts in the general ledger is called journalizing.

After we've posted transactions to the general ledger accounts,the sum of the accounts with debit balances should equal the sum of the accounts with credit balances.

Purchasing office supplies is recorded with a credit to office supplies.