Question 1

At January 1, 2022, Troyer Industries reported Retained Earnings of $350,000.During 2022, Troyer had a net loss of $75,000 and paid dividends to the stockholders of $50,000.At December 31, 2022, the balance in Retained Earnings is

Accepted Answer

The retained earnings at the end of the year is calculated as the beginning retained earnings minus the net loss and minus the dividends paid. So, $350,000 - $75,000 - $50,000 = $225,000 credit.

Question 2

In recording accounting transactions, evidence that a transaction has taken place is obtained from

Accepted Answer

Source documents, such as invoices, receipts, and contracts, provide the necessary evidence that a transaction has occurred and are used to record accounting transactions.

Question 3

After a business transaction has been analyzed and entered in the journal, the next step in the recording process is to transfer the information to

Accepted Answer

The next step after entering a transaction in the journal is to post the information to the ledger accounts, which is where all the accounts are maintained and updated.

Question 4

During January 2022, its first month of operation, Osborn Enterprises earned net income of $6,800 and paid dividends to the owners of $2,000.At January 31, the balance in Retained Earnings will be

Accepted Answer

Retained Earnings at January 31 will be the net income ($6,800) minus the dividends paid ($2,000), resulting in a $4,800 credit balance.

Question 5

Which of the following accounts has a normal debit balance?

Accepted Answer

The answer of Which of the following accounts has a...

Question 6

During 2022, its first year of operations, Jane's Bakery had revenues of $130,000 and expenses of $66,000.The business paid cash dividends of $36,000.What is the balance in Retained Earnings at December 31, 2022?

Accepted Answer

Retained Earnings = Revenues - Expenses - Dividends = $130,000 - $66,000 - $36,000 = $28,000 credit.

Question 7

All of the following statements regarding the double-entry system are true except

Accepted Answer

In the double-entry system, not every transaction affects both sides of the accounting equation. Some transactions may affect only one side, such as an asset exchange or a liability settlement.

Question 8

The first step in the recording process is to

Accepted Answer

The first step in the recording process is to analyze the transaction in terms of its effect on the accounts.

Question 9

The usual sequence of steps in the transaction recording process is

Accepted Answer

The answer of The usual sequence of steps in the...

Question 10

Which of the following accounts has a normal credit balance?

Accepted Answer

Rent Revenue is a revenue account, and revenue accounts typically have a normal credit balance.

Question 11

At September 1, 2022, Kern Enterprises reported a cash balance of $140,000.During the month, Kern collected cash of $60,000 and made disbursements of $100,000.At September 30, 2022, the cash balance is

Accepted Answer

The cash balance at the end of September is calculated as the beginning balance plus cash collected minus disbursements: $140,000 + $60,000 - $100,000 = $100,000 debit.

Question 12

Barnes Company's trial balance reported the following balances at the end of its first year:  What amount did Barnes Company's trial balance show as total credits?

Accepted Answer

The answer of Barnes Company's trial balance reported the following...

Question 13

On June 1, 2022, England Inc.reported a cash balance of $42,000.During June, England made deposits of $16,000 and made disbursements totaling $48,000.What is the cash balance at the end of June?

Accepted Answer

The cash balance at the start of June was $42,000. Deposits increased the balance by $16,000, totaling $58,000. Disbursements of $48,000 reduced the balance to $10,000. Since the balance is positive, it is a debit balance.

Question 14

During February 2022, its first month of operations, the owner of Schwenn Enterprises invested cash of $100,000.Schwenn had cash sales of $20,000 and paid expenses of $35,000.Assuming no other transactions impacted the cash account, what is the balance in Cash at February 28, 2022?

Accepted Answer

The cash balance is calculated by adding the initial investment and cash sales, then subtracting the expenses: $100,000 (investment) + $20,000 (sales) - $35,000 (expenses) = $85,000 debit balance.

Question 15

At December 1, 2022, Orear Company's Accounts Receivable balance was $16,800.During December, Orear had credit sales of $45,000 and collected accounts receivable of $36,000.At December 31, 2022, the Accounts Receivable balance is

Accepted Answer

The Accounts Receivable balance is calculated as the beginning balance plus credit sales minus collections. So, $16,800 + $45,000 - $36,000 = $25,800 debit.

Question 16

Winrow Company's trial balance at the end of its first month of operations reported the following accounts and amounts:  Total credits on Winrow Company's trial balance are

Accepted Answer

The answer of Winrow Company's trial balance at the end...

Question 17

During January 2022, Carey Services Inc.paid a cash dividends of $2,000.This transaction

Accepted Answer

Paying cash dividends reduces stockholders' equity because it decreases retained earnings, which is a component of stockholders' equity.

Question 18

At October 1, 2022, Metz Industries had an Accounts Payable balance of $140,000.During the month, the company made purchases on account of $100,000 and made payments on account of $160,000.At October 31, 2022, the Accounts Payable balance is

Accepted Answer

The beginning balance of $140,000 plus purchases of $100,000 minus payments of $160,000 results in an ending balance of $80,000 credit.

Question 19

At February 1, 2022, the balance in Goebel Inc.'s supplies account was $3,500.During February.Goebel purchased supplies of $3,000 and used supplies of $4,000.At the end of February, the balance in the Supplies account should be

Accepted Answer

The balance at the end of February is calculated as the beginning balance plus purchases minus used supplies: $3,500 + $3,000 - $4,000 = $2,500 debit.

Question 20

At September 1, 2022, Baxter Inc.reported Retained Earnings of $423,000.During the month, Baxter generated revenues of $60,000, incurred expenses of $36,000, purchased equipment for $15,000 and paid dividends of $6,000.What is the balance in Retained Earnings at September 30, 2022?

Accepted Answer

The retained earnings at the end of September is calculated by adding net income (revenues minus expenses) and subtracting dividends from the beginning retained earnings. Net income is $60,000 - $36,000 = $24,000. Retained earnings at September 30 is $423,000 + $24,000 - $6,000 = $441,000. The equipment purchase does not affect retained earnings directly.

Quiz 3: The Accounting Information System