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Exam 2: Accounting System and Financial Statements

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Question 111

True/False

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The ordering of accounts in a trial balance typically follows their identification number from the chart of accounts, that is, assets first, then liabilities, then common stock and dividends, followed by revenues and expenses.

A) True
B) False

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Question 112

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Wiley Hill opened Hill's Repairs, Inc. on March 1 of the current year. During March, the following transactions occurred and were recorded in the company's books: 1. Wiley invested $25,000 cash in the corporation. 2) Wiley contributed $100,000 of equipment to the corporation. 3) The company paid $2,000 cash to rent office space for the month. 4) The company received $16,000 cash for repair services provided during March. 5) The company paid $6,200 for salaries for the month. 6) The company provided $3,000 of services to customers on account. 7) The company paid cash of $500 for monthly utilities. 8) The company received $3,100 cash in advance of providing repair services to a customer. 9) The company paid $5,000 cash in dividends to Wiley. (sole shareholder) Based on this information, the balance in Stockholders' Equity reported on the Balance Sheet at the end of March would be:

A) $133,400.
B) $130,300.
C) $125,300.
D) $8,400.
E) $13,500.

F) B) and D)
G) C) and D)

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Question 113

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The _______________________ is a record containing all accounts used by a company as well as the transactions and ending balances of each of the accounts.

A simple tool that is widely used in accounting to represent a ledger account and to understand how debits and credits affect an account balance is called a:

At the beginning of January of the current year, Little Mikey's Catering ledger reflected a normal balance of $52,000 for accounts receivable. During January, the company collected $14,800 from customers on account and provided additional services to customers on account totaling $12,500. Additionally, during January one customer paid Mikey $5,000 for services to be provided in the future. At the end of January, the balance in the accounts receivable account should be:

List the steps necessary to get from transactions and events to financial statements.

The company paid $100 cash in dividends to J. Smith, the owner. Which of the following general journal entries will Jay's Limo Services, Inc. make to record this transaction?

Identify the account below that is classified as an asset in a company's chart of accounts.

J. Brown Consulting paid $500 cash for utilities for the current month. Given the choices below, determine the general journal entry that J. Brown Consulting will make to record this transaction.

Transactions are recorded first in the ledger and then transferred to the journal.

Compare the list of accounts below and choose the list that contains only accounts that would be classified as asset accounts on the Chart of Accounts.

A column in journals and ledger accounts that is used to cross reference journal and ledger entries is the:

The right side of a T-account is a(n) :

All of the following statements regarding a sales invoice are true except:

ABC Company made a $2,500 payment on account, to satisfy a previously recorded account payable. Set up the necessary T-accounts below by entering appropriate account names, and show how this transaction would be recorded directly in those accounts.

On February 5, Teddy's Catering purchased an oven that cost $35,000. The firm made a down payment of $5,000 cash and signed a long-term note payable for the balance. Show the general journal entry to record this transaction.

A $15 credit to Sales was entered on the trial balance as a $150 credit. By what amount is the Sales account in error?

Explain how accounts are used in recording information about a business's transactions.

Blade, Inc. has the following account balances at Dec 31 of the current year. What is the correct missing balance for Cash?

The trial balance can serve as a replacement for the balance sheet, since total debits must equal total credits.