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Exam 2: Analyzing Business Transactions

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Question 41

True/False

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A double line drawn under the figures in a money column shows that the computation is complete.

A) True
B) False

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verified

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Question 42

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When a business sells services for cash, assets increase and revenue ___________________.

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verified

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Question 43

Multiple Choice

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Ginger Yale Ice Company receives money from a customer on account. Recording this transaction will

When a business pays cash for salaries, assets decrease and expenses ___________________.

The income statement shows revenue, ___________________, and net income or net loss for a period of time.

The transactions listed below took place at the Mitchell Advertising Agency. These transactions affected the following accounts. Indicate the accounts affected and use plus and minus to show the changes caused by each transaction. $\begin{array}{ll}\text { Cash } & \text { K. Mitchell, Capital } \\\text { Accounts Receivable } & \text { Revenue } \\\text { Equipment } & \text { Expenses } \\\text { Accounts Payable } &\end{array}$ -Purchased a computer for cash

Assets and liabilities are reported on

The financial interest of the owner in a business is called owner's equity, or ___________________.

The statement of ____________________ reports the changes that have occurred in the owner's financial interest during the reporting period.

The transactions listed below took place at the Mitchell Advertising Agency. These transactions affected the following accounts. Indicate the accounts affected and use plus and minus to show the changes caused by each transaction. $\begin{array}{ll}\text { Cash } & \text { K. Mitchell, Capital } \\\text { Accounts Receivable } & \text { Revenue } \\\text { Equipment } & \text { Expenses } \\\text { Accounts Payable } &\end{array}$ -Performed services for cash

The balance sheet shows

On September 1, Shawn Dahl established Whitewater Rentals, a canoe and kayak rental business. The following transactions occurred in the month of September and affected the following accounts: $\begin{array}{ll}\text { Cash } & \text { Accounts Payable } \\\text { Accounts Receivable } & \text { Shawn Dahl, Capital } \\\text { Office Equipment } & \text { Revenue } \\\text { Canoe and Kayak Equipment } & \text { Expenses }\end{array}$ Transactions 1. Shawn Dahl invested $45,000 in cash to open the business 2. Paid $12,700 in cash for the purchase of kayak and canoe equipment 3. Paid $1,050 in cash for rent expense 4. Purchased additional kayak and canoe equipment for $3,800 on credit 5. Received $3,900 in cash for kayak rentals 6. Rented canoes and kayaks for $1,200 on account 7. Purchased office equipment for $125 in cash 8. Received $800 in cash from credit clients 9. Shawn Dahl withdrew $1,500 in cash for personal expenses -Based on the information shown above, what is the balance of Accounts Receivable for Whitewater Rentals at the end of September?

The transactions listed below took place at the Mitchell Advertising Agency. These transactions affected the following accounts. Indicate the accounts affected and use plus and minus to show the changes caused by each transaction. $\begin{array}{ll}\text { Cash } & \text { K. Mitchell, Capital } \\\text { Accounts Receivable } & \text { Revenue } \\\text { Equipment } & \text { Expenses } \\\text { Accounts Payable } &\end{array}$ -Issued checks to pay salaries

The transactions listed below took place at the Mitchell Advertising Agency. These transactions affected the following accounts. Indicate the accounts affected and use plus and minus to show the changes caused by each transaction. $\begin{array}{ll}\text { Cash } & \text { K. Mitchell, Capital } \\\text { Accounts Receivable } & \text { Revenue } \\\text { Equipment } & \text { Expenses } \\\text { Accounts Payable } &\end{array}$ -Received cash from credit customers

An expense by definition is not

When equipment is purchased for cash,

Funds taken from the business by the owner for personal use are called ___________________.

Owner's equity is

The total amount of Liabilities is

The property that a business owns is referred to as its ___________________.