Question 1

A law firm billed a client $1,800 for work performed in the current month. Which of the following general journal entries will the firm make to record this transaction?

Accepted Answer

A)   Debit Cash, $1,800; credit Accounts Receivable, $1,800.
B)   Debit Accounts Receivable, $1,800; credit Unearned Legal Fees Revenue, $1,800.
C)   Debit Accounts Receivable, $1,800; credit Legal Fees Revenue, $1,800.
D)   Debit Cash, $1,800; credit Unearned Legal Fees Revenue, $1,800.
E)   Debit Legal Fees Revenue, $1,800; credit Accounts Receivable, $1,800.F) A) and B)
G) B) and C)

Question 2

Andrea Apple opened Apple Photography on January 1 of the current year. During January, the following transactions occurred and were recorded in the company's books:

Andrea invested $13,500 cash in the business.
Andrea contributed $20,000 of photography equipment to the business.
The company paid $2,100 cash for an insurance policy covering the next 24 months. The company received $5,700 cash for services provided during January.
The company purchased $6,200 of office equipment on credit.
The company provided $2,750 of services to customers on account. The company paid cash of $1,500 for monthly rent.
The company paid $3,100 on the office equipment purchased in transaction #5 above. Paid $275 cash for January utilities.
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Based on this information, the balance in the cash account at the end of January would be:

Accepted Answer

A)   $12,225.
B)   $18,700.
C)   $13,500.
D)   $15,250.
E)   $41,450.F) A) and D)
G) A) and B)

Question 3

An account used to record the owner's investments in a business is called a(n) :

Accepted Answer

A)   Capital account.
B)   Expense account.
C)   Liability account.
D)   Withdrawals account.
E)   Revenue account.F) A) and E)
G) A) and D)

Question 4

J. Brown Consulting immediately 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.

Accepted Answer

A)     Prepaid Utilities 500 Accounts Payable 500\begin{array} { | l | r | r | } \hline 	ext { Prepaid Utilities } & 500 & \\hline 	ext { Accounts Payable } & & 500 \\hline\end{array} Prepaid Utilities  Accounts Payable ​500​500​​ 
B)     Utilities Expense 500 Cash 500\begin{array} { | l | r | r | } \hline 	ext { Utilities Expense } & 500 & \\hline 	ext { Cash } & & 500 \\hline\end{array} Utilities Expense  Cash ​500​500​​ 
C)     Cash 500 Accounts Payable 500\begin{array} { | l | r | r | } \hline 	ext { Cash } & 500 & \\hline 	ext { Accounts Payable } & & 500 \\hline\end{array} Cash  Accounts Payable ​500​500​​ 
D)     Utilities Expense 500 Accounts Payable 500\begin{array} { | l | r | r | } \hline 	ext { Utilities Expense } & 500 & \\hline 	ext { Accounts Payable } & & 500 \\hline\end{array} Utilities Expense  Accounts Payable ​500​500​​ 
E)     Cash 500 Utilities Expense 500\begin{array} { | l | r | r | } \hline 	ext { Cash } & 500 & \\hline 	ext { Utilities Expense } & & 500 \\hline\end{array} Cash  Utilities Expense ​500​500​​F) All of the above
G) B) and C)

Question 5

A $130 credit to Supplies was credited to Fees Earned by mistake. By what amounts are the accounts under- or overstated as a result of this error?

Accepted Answer

A)   Supplies, understated $130; Fees Earned, overstated $130.
B)   Supplies, overstated $130; Fees Earned, understated $130.
C)   Supplies, overstated $130; Fees Earned, overstated $130.
D)   Supplies, understated $260; Fees Earned, overstated $130.
E)   Supplies, overstated $260; Fees Earned, understated $130.F) B) and E)
G) B) and C)

Question 6

A law firm collected $1,800 on account for work performed in the previous month. Which of the following general journal entries will the firm make to record this transaction?

Accepted Answer

A)   Debit Accounts Receivable, $1,800; credit Legal Fees Revenue, $1,800.
B)   Debit Cash, $1,800; credit Unearned Legal Fees Revenue, $1,800.
C)   Debit Cash, $1,800; credit Accounts Receivable, $1,800.
D)   Debit Legal Fees Revenue, $1,800; credit Accounts Receivable, $1,800.
E)   Debit Accounts Receivable, $1,800; credit Unearned Legal Fees Revenue, $1,800.F) D) and E)
G) B) and C)

Question 7

Larry Bar opened a frame shop and completed these transactions: 
1. Larry started the shop by investing $40,000 cash and equipment valued at $18,000.
2)  Purchased $70 of office supplies on credit.
3)  Paid $1,200 cash for the receptionist's salary.
4)  Sold a custom frame service and collected $1,500 cash on the sale.
5)  Completed framing services and billed the client $200.
What was the balance of the cash account after these transactions were posted?

Accepted Answer

A)   $38,700.
B)   $40,300.
C)   $300.
D)   $41,500.
E)   $38,500.F) None of the above
G) C) and D)

Question 8

Revenues and expenses are two categories of ________ accounts.

Accepted Answer

The answer of Revenues and expenses are two categories of...

Question 9

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

Accepted Answer

general le...

Question 10

Mary Sunny began business as Sunny Law Firm on November 1. Record the following
November transactions by making entries directly to the T-accounts provided. Then, prepare a trial balance, as of November 30.
a) Mary invested $15,000 cash and a law library valued at $6,000.
b) Purchased $7,500 of office equipment from John Bronx on credit.
c) Completed legal work for a client and received $1,500 cash in full payment.
d) Paid John Bronx. $3,500 cash in partial settlement of the amount owed.
e) Completed $4,000 of legal work for a client on credit.
f) Mary withdrew $2,000 cash for personal use.
g) Received $2,500 cash as partial payment for the legal work completed for the client in (e).
h) Paid $2,500 cash for the legal secretary's salary.

Accepted Answer

The answer of Mary Sunny began business as Sunny Law...

Question 11

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.

Accepted Answer

None...

Question 12

A company provided $12,000 of consulting services, and was immediately paid in cash by the customer.Identify the journal entry below that properly records this transaction.

Accepted Answer

A)     Accounts receivable 12,000 Consulting services revenue 12,000\begin{array} { | l | r | l | } \hline 	ext { Accounts receivable } & 12,000 & \\hline 	ext { Consulting services revenue } & & 12,000 \\hline\end{array} Accounts receivable  Consulting services revenue ​12,000​12,000​​ 
B)     Accounts receivable 12,000 Cash 12,000\begin{array} { | l | r | r | } \hline 	ext { Accounts receivable } & 12,000 & \\hline 	ext { Cash } & & 12,000 \\hline\end{array} Accounts receivable  Cash ​12,000​12,000​​ 
C)     Consulting services revenue 12,000 Cash 12,000\begin{array} { | l | r | l | } \hline 	ext { Consulting services revenue } & 12,000 & \\hline 	ext { Cash } & & 12,000 \\hline\end{array} Consulting services revenue  Cash ​12,000​12,000​​ 
D)     Cash 12,000 Consulting services revenus 12,000\begin{array} { | l | r | r | } \hline 	ext { Cash } & 12,000 & \\hline 	ext { Consulting services revenus } & & 12,000 \\hline\end{array} Cash  Consulting services revenus ​12,000​12,000​​ 
E)     Accounts payable 12,000 Consulting services revenue 12,000\begin{array} { | l | r | l | } \hline 	ext { Accounts payable } & 12,000 & \\hline 	ext { Consulting services revenue } & & 12,000 \\hline\end{array} Accounts payable  Consulting services revenue ​12,000​12,000​​F) B) and C)
G) B) and E)

Question 13

The debt ratio of Jackson's Shoes is .9 and the debt ratio of Billy's Catering is 1.0. Based on this information, an investor can conclude:

Accepted Answer

A)   Billy's Catering has a lower risk from its financial leverage.
B)   Billy's Catering has the exact same dollar amount of total liabilities and total assets.
C)   Billy's Catering finances a relatively lower portion of its assets with liabilities than Jackson's Shoes.
D)   Jackson's Shoes has a higher risk from its financial leverage.
E)   Jackson's Shoes has less equity per dollar of assets than Billy's Catering.F) D) and E)
G) B) and E)

Question 14

Indicate on which of the financial statements the following items appears. Use I for income statement, E for statement of owner's equity, and B for balance sheet. More than one statement may be appropriate for some items.
 $\text { a. Fees Earned }$
$$\begin{array} { | l | l | } 
\hline \text { b. Cash } &\quad\quad\quad\quad \
\hline \text { e. Unearned Revenue } & \
\hline \text { d. Rent expense } & \
\hline \text { e. Owner, Capital } & \
\hline \text { f. Notes Payable } & \
\hline \text { g. Prepaid Rent } & \
\hline \text { h. Salaries Expense } & \
\hline \text { i. Notes Payable } & \
\hline \text { j. Owner, Withdrawal } & \
\hline
\end{array}$$

Accepted Answer

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Question 15

A report that lists a business's accounts and their balances, in which the total debit balances should equal the total credit balances, is called a(n) :

Accepted Answer

A)   Trial balance.
B)   Account balance.
C)   General Journal.
D)   Ledger.
E)   Chart of accounts.F) C) and E)
G) A) and C)

Question 16

Identify the accounts that would normally have balances in the debit column of a business's trial balance.

Accepted Answer

A)   Assets and revenues.
B)   Revenues and expenses.
C)   Liabilities and expenses.
D)   Assets and expenses.
E)   Liabilities and withdrawals.F) A) and D)
G) A) and C)

Question 17

For each of the accounts in the following table (1) identify the type of account as an asset, liability, equity, revenue, or expense, and (2) identify the normal balance of the account.
 $$\begin{array} { | l | l | l } 
\hline & \text { Account Type } & \text { Normal Bal ance } \
\hline \text { a. Wages Expense } & & \
\hline \text { b. Accounts Receivable } & & \
\hline \text { c. Commissions Eamed } & & \
\hline \text { d. Salaries Payable } & & \
\hline \text { e. Owner, Capital } & & \
\hline \text { f. Unearned Advertising Revenue } & & \
\hline \text { g. Salaries Expense } & & \
\hline \text { h. Maganine Subscription Revenue } & & \
\hline \text { i. Owner, Withdrawal } & & \
\hline \text { j. Prepaid Insurance } & & \
\hline
\end{array}$$

Accepted Answer

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Question 18

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

Accepted Answer

A)   $135 overstated.
B)   $150 overstated.
C)   $15 understated.
D)   $150 understated.
E)   $135 understated.F) All of the above
G) B) and C)

Question 19

A credit is used to record an increase in all of the following accounts except:

Accepted Answer

A)   Service Revenue
B)   Owner's Capital
C)   Unearned Revenue
D)   Accounts Payable
E)   Wages ExpenseF) C) and D)
G) D) and E)

Question 20

Richard Redden contributed $70,000 in cash and land worth $130,000 to open a new business, RR Consulting. Which of the following general journal entries will RR Consulting make to record this transaction?

Accepted Answer

A)   Debit Assets $200,000; credit Redden, Capital, $200,000.
B)   Debit Redden, Capital, $200,000; credit Cash $70,000, credit Land, $130,000.
C)   Debit Cash $70,000; debit Land $130,000; credit Redden, Capital, $200,000.
D)   Debit Redden, Capital, $200,000; credit Assets, $200,000.
E)   Debit Cash and Land, $200,000; credit Redden, Capital, $200,000.F) A) and E)
G) A) and C)

Exam 2: Analyzing and Recording Transactions

Correct Answer
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Correct Answer
verified

An account used to record the owner's investments in a business is called a(n) :

Correct Answer
verified

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.

Correct Answer
verified
None...
View Answer

Identify the accounts that would normally have balances in the debit column of a business's trial balance.

Correct Answer
verified

A $130 credit to Supplies was credited to Fees Earned by mistake. By what amounts are the accounts under- or overstated as a result of this error?

Correct Answer
verified

A company provided $12,000 of consulting services, and was immediately paid in cash by the customer.Identify the journal entry below that properly records this transaction.

Correct Answer
verified

Correct Answer
verified
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View Answer

Richard Redden contributed $70,000 in cash and land worth $130,000 to open a new business, RR Consulting. Which of the following general journal entries will RR Consulting make to record this transaction?

Correct Answer
verified

Correct Answer
verified

Revenues and expenses are two categories of ________ accounts.

Correct Answer
verified

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

Correct Answer
verified
general le...
View Answer

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

Correct Answer
verified

A report that lists a business's accounts and their balances, in which the total debit balances should equal the total credit balances, is called a(n) :

Correct Answer
verified

A law firm billed a client $1,800 for work performed in the current month. Which of the following general journal entries will the firm make to record this transaction?

Correct Answer
verified

Correct Answer
verified

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View Answer

A law firm collected $1,800 on account for work performed in the previous month. Which of the following general journal entries will the firm make to record this transaction?

Correct Answer
verified

J. Brown Consulting immediately 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.

Correct Answer
verified

A credit is used to record an increase in all of the following accounts except:

Correct Answer
verified

The debt ratio of Jackson's Shoes is .9 and the debt ratio of Billy's Catering is 1.0. Based on this information, an investor can conclude:

Correct Answer
verified

Exam 2: Analyzing and Recording Transactions

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

An account used to record the owner's investments in a business is called a(n) :

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedNone...View AnswerShow Answer

Identify the accounts that would normally have balances in the debit column of a business's trial balance.

Correct AnswerverifiedShow Answer

A $130 credit to Supplies was credited to Fees Earned by mistake. By what amounts are the accounts under- or overstated as a result of this error?

Correct AnswerverifiedShow Answer

A company provided $12,000 of consulting services, and was immediately paid in cash by the customer.Identify the journal entry below that properly records this transaction.

Correct AnswerverifiedShow Answer

Correct Answerverified \[\begin{array} { | l | l | l | } \hli ...View AnswerShow Answer

Richard Redden contributed $70,000 in cash and land worth $130,000 to open a new business, RR Consulting. Which of the following general journal entries will RR Consulting make to record this transaction?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Revenues and expenses are two categories of ________ accounts.

Correct AnswerverifiedShow Answer

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

Correct Answerverifiedgeneral le...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

A report that lists a business's accounts and their balances, in which the total debit balances should equal the total credit balances, is called a(n) :

Correct AnswerverifiedShow Answer

A law firm billed a client $1,800 for work performed in the current month. Which of the following general journal entries will the firm make to record this transaction?

Correct AnswerverifiedShow Answer

Correct Answerverified \[\begin{array} { | l | l | } \hline \ ...View AnswerShow Answer

A law firm collected $1,800 on account for work performed in the previous month. Which of the following general journal entries will the firm make to record this transaction?

Correct AnswerverifiedShow Answer

J. Brown Consulting immediately 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.

Correct AnswerverifiedShow Answer

A credit is used to record an increase in all of the following accounts except:

Correct AnswerverifiedShow Answer

The debt ratio of Jackson's Shoes is .9 and the debt ratio of Billy's Catering is 1.0. Based on this information, an investor can conclude:

Correct AnswerverifiedShow Answer

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