Question 1

Post the following transactions to T-accounts and determine each account's ending balance. 1. 
$\begin{array}{llr}
  \text {  Supplies.} &2,800\
 \text { Accounts Payable } &&2,800\
\end{array}$

2. 
$\begin{array}{llr}
  \text {  Accounts Receivable} &4,000\
 \text {  Service Revenue} &&4,000\
\end{array}$

3.
$\begin{array}{llr}
  \text {  Cash} & 3,000\
 \text {  Accounts Receivable} && 3,000\
\end{array}$

4. 
$\begin{array}{llr}
  \text { Accounts Payable } &1,000\
 \text { Cash } &1,000\
\end{array}$

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Question 2

The trial balance of Red House Painters shown below does not balance. $\begin{array}{c}
\text {RED HOUSE PAINTERS}\
\text {Trial Balance}\
\text {June 30, 2018}\
\begin{array}{lcc}
& \underline{\text { Debit} }& \underline{\text { Credit }}\
\text { Cash } & \$ 2,780 & \
 \text { Accounts Receivable } & 7,420 & \
 \text { Supplies } & 600 & \
 \text {Equipment. } & 8,300 & \
 \begin{array}{l}
\text { Accounts Payable } \
\text { Common Stock }
\end{array} & & \begin{array}{r}
\$ 9.777 \
1.952
\end{array} \
\text { Dividends } & 1,300 & \
 \text {Service Revenue } & & 15,200 \
 \text {Salaries and Wages Expense } & 3,800 & \
 \text { Maintenance and Repairs Exper } & \underline{ 1,600 }& \
 \text {Totals } & \underline{ \$ 25,800} & \underline{ \$ 26,929} \
\end{array}\end{array}$
 
An examination of the ledger and journal reveals the following errors:
1. Each of the above listed accounts has a normal balance per the general ledger.
2. Cash of $270 received from a customer on account was debited to Cash $720 and credited to Accounts Receivable $720.
3. A dividend of $400 was posted as a credit to Dividends $400 and credit to Cash $400.
4. A debit of $300 was not posted to Salaries and Wages Expense.
5. The purchase of equipment on account for $700 was recorded as a debit to Maintenance and Repairs Expense and a credit to Accounts Payable for $700.
6. Services were performed on account for a customer, $510, for which Accounts Receivable was debited $510 and Service Revenue was credited $51.
7. A payment on account for $235 was credited to Cash for $235 and credited to Accounts Payable for $253.
Instructions
Prepare a correct trial balance.

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Question 3

During an accounting period, a business has numerous transactions affecting each of the following accounts. State for each account whether it is likely to have (a) debit entries only, (b) credit entries only, or (c) both debit and credit entries.
(1) Advertising Expense (6) Dividends
(2) Service Revenue (7) Cash
(3) Accounts Payable (8) Salaries and Wages Expense
(4) Accounts Receivable (9) Notes Payable
(5) Common Stock (10) Insurance Expense

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Question 4

Journalize the following business transactions in general journal form. Identify each transaction by number. You may omit explanations of the transactions.
1. The company issues stock in exchange for $40,000 cash
2. Purchased $400 of supplies on credit.
3. Purchased equipment for $8,000, paying $2,000 in cash and signed a 30-day, $6,000, note payable.
4. Real estate commissions billed to clients amount to $4,000.
5. Paid $700 in cash for the current month's rent.
6. Paid $200 cash on account for supplies purchased in transaction 2.
7. Received a bill for $600 for advertising for the current month.
8. Paid $2,200 cash for office salaries and wages.
9. The company paid dividends of $1,500.
10. Received a check for $3,000 from a client in payment on account for commissions billed in transaction 4.

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Question 5

Some of the following errors would cause the debit and credit columns of the trial balance to have unequal totals. For each of the four cases, state whether the error would cause unequal totals in the trial balance. If the error causes unequal totals, indicate the amount of difference between the columns and state whether the debit or credit is larger. Each case is to be considered independently of the others.
1. A payment of $500 to a creditor was recorded by a debit to Accounts Payable of $50 and a credit to Cash of $500.
2. A $480 payment for a printer was recorded by a debit to Equipment of $48 and a credit to Cash for $48.
3. An account receivable in the amount of $2,500 was collected in full. The collection was recorded by a debit to Cash for $2,500 and a debit to Accounts Payable for $2,500.
4. An account payable was paid by issuing a check for $800. The payment was recorded by debiting Accounts Payable $800 and crediting Accounts Receivable $800.

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Question 6

The chart of accounts used by Notwist Copy Company is listed below. You are to indicate the proper accounts to be debited and credited for the following transactions by writing the account number(s) in the appropriate boxes.  $\quad $ $\quad $ $\quad $ $\quad $ $\quad $$\text {CHART OF ACCOUNTS}$
$\begin{array}{lll}
101  \text { Cash } & 209 \text { Unearned Service Revenue } \
112  \text { Accounts Receivable } & 311 \text { Common Stock } \
125 \text { Supplies}&332 \text { Dividends } \
157 \text { Equipmest } & 400 \text { Service Revenue } \
200 \text { Notes Payable } & 610 \text { Advertising Expense } \
201 \text { Accounts Payable } & 729 \text { Rent Expense }
\end{array}$

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Question 7

The bookkeeper for Panda Bear Yard Service made a number of errors in journalizing and posting as described below:
1. A debit posting to accounts receivable for $500 was omitted.
2. A payment of accounts payable for $600 was credited to cash and debited to accounts receivable.
3. A credit to accounts receivable for $950 was posted as $95.
4. A cash purchase of equipment for $893 was journalized as a debit to equipment and a credit to notes payable. The credit posting was made for $839 while the debit posting was made for $893.
5. A debit posting of $400 for purchase of supplies was credited to supplies.
6. A debit to maintenance and repairs expense for $451 was posted as $415.
7. A debit posting for salaries and wages expense for $900 was made twice.
8. A cash purchase of supplies for $700 was journalized and posted as a debit to supplies for $70 and a credit to cash for $70.
Instructions
For each error, indicate (a) whether the trial balance will balance; if the trial balance will not balance, indicate (b) the amount of the difference, and (c) the trial balance column that will have the larger total. Consider each error separately. Use the following form, in which error (1) is given as an example. $$\begin{array} { c c c c } 
& ( \mathrm { A } )& ( \mathrm { B } ) & ( \mathrm { C } ) \
 \underline{\text { Error } }&  \underline{\text { In Balance } }& \underline{\text { Difference }} &  \underline{\text { Larger Column } }\
1&\text {  No }  &\$500&\text { Credit }
\end{array}$$

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Question 8

Prepare journal entries for each of the following transactions.
1. Performed services for customers on account $8,000.
2. Purchased $20,000 of equipment on account.
3. Received $3,000 from customers in transaction 1.
4. The company paid dividends of $2,000.

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Question 9

Identify the accounts to be debited and credited for each of the following transactions.
1. Invested $8,000 cash in the business in exchange for stock.
2. Purchased supplies on account for $1,000.
3. Billed customers $2,000 for services performed.
4. Paid salaries of $1,200.

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Question 10

For each of the following accounts, indicate the effects of (a) a debit and (b) the normal account balance.
 1. Notes Payable
 2. Prepaid Insurance
 3. Salaries and Wages Expense
 4. Service Revenue
 5. Equipment
 6. Common Stock

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Question 11

Transactions for Tom Petty Company for the month of October are presented below. Journalize each transaction and identify each transaction by number. You may omit journal explanations.
1. Invested $40,000 cash in the business in exchange for stock.
2. Purchased land costing $28,000 for cash.
3. Purchased equipment costing $15,000 for $3,000 cash and the remainder on credit.
4. Purchased supplies on account for $800.
5. Paid $1,000 for a one-year insurance policy.
6. Received $3,000 cash for services performed.
7. Received $4,000 for services previously performed on account.
8. Paid wages to employees for $2,500.
9. Paid dividends of $2,000.

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Question 12

Eight transactions are recorded in the following T-accounts:  
Indicate for each debit and each credit: (a) whether an asset, liability, stockholders' equity, revenue, or expense account was affected and (b) whether the account was increased (+) or (-) decreased. Answers should be presented in the following chart form:

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Question 13

Selected transactions for Good Home, a property management company, in its first month of business, are as follows:
Jan. 2 Issued stock to investors for $15,000 cash.
3 Purchased used car for $5,200 cash for use in business. 
9 Purchased supplies on account for $500.
11 Billed customers $2,100 for services performed.
16 Paid $450 cash for advertising.
20 Received $1,300 cash from customers billed on January 11.
23 Paid creditor $300 cash on balance owed.
28 Paid dividends of $2,000.
Instructions
For each transaction indicate the following.
(a) The basic type of account debited and credited (asset (A), liability (L), stockholders' equity (SE)).
(b) The specific account debited and credited (cash, rent expense, service revenue, etc.).
(c) Whether the specific account is increased (incr.) or decreased (decr).
(d) The normal balance of the specific account.
Use the following format, in which the January 2 transaction is given as an example.

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Question 14

Sigur Ros Company is a newly organized business. The list of accounts to be opened in the general ledger is as follows: $$\begin{array} { l l } 
\text { Accounts Payable } & \text { Prepaid Insurance } \
\text { Accounts Receivable } & \text { Prepaid Rent } \
\text { Accumulated Depreciation } & \text { Rent Expense } \
\text { Cash } & \text { Salaries and Wages Expense } \
\text { Common Stock } & \text { Salaries and Wages Payable } \
\text { Depreciation Expense } & \text { Service Revenue } \
\text { Dividends } & \text { Supplies } \
\text { Equipment } & \text { Utilities Expense } \
\text { Insurance Expense } &
\end{array}$$ 
Instructions
Organize the accounts into the order in which they should appear in the ledger of Sigur Ros Company and assign account numbers. Use the following system to assign account numbers. $$\begin{aligned}
1 - 199 & \text { Assets } \
200 - 299 & \text { Liabilities } \
300 - 399 & \text { Stockholders' Equity } \
400 - 499 & \text { Revenues } \
500 - 599 & \text { Expenses }
\end{aligned}$$

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Question 15

For the accounts listed below, indicate if the normal balance of the account is a debit or credit.

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Question 16

The transactions of Medina Information Service are recorded in the general journal below. You are to post the journal entries to the accounts in the general ledger. After all entries have been posted, you are to prepare a trial balance on the form provided.

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Question 17

Prepare a trial balance from the ledger accounts of Black Diamond Express as of January 31, 2018. $$\begin{array} { l r l r } 
\text { Accounts Payable } & \$ 1,100 & \text { Rent Expense } & \$ 500 \
\text { Accounts Receivable } & 1,700 & \text { Service Revenue } & 3,000 \
\text { Cash } & 1,400 & \text { Supplies } & 200 \
\text { Common stock } & 2,000 & \text { Salaries and Wages Expense } & 1,300 \
\text { Dividends } & 1,000 & &
\end{array}$$

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Question 18

Prepare a corrected trial balance for Stereolab Company. All accounts should have a normal balance. $\begin{array}{c}
\text {STEROELAB COMPANY}\
\text {Trial Balance}\
\text {For the Quarter Ended 3/31/18}\\
\begin{array}{lrr}
& \underline{\text {Debit}}& \underline{\text {Credit}}\
\text { Cash } & \$ 14,000 & \
\text { Accounts Receivable } &&\$23,000 \
\text { Prepaid Insurance } &2,500 & \
\text { Equipment } &60,000 & \
\text { Accounts Payable }&  & 15,000\
\text { Unearned Service Revenue } &10,000 &  \
\text { Notes Payable } & &25,000\
\text { Common stock } & &38,000\
\text { Dividends }  &&1,500 \
\text { Service Revenue }&  &43,000 \
\text { Salaries and Wages Expense } &15,000\
\text { Utilities Expense } &5,000& \
\text { Rent Expense } & \underline{10,000 }& \
& \underline{\$ 116,500} & \underline{\$ 145,500}
\end{array}
\end{array}$

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Question 19

Match the basic step in the recording process described by each of the following statements.
A. Analyze each transaction
B. Enter each transaction in a journal
C. Transfer journal information to ledger accounts
____ 1. This step is called posting.
____ 2. Business documents are examined to determine the effects of transactions on the accounts.
____ 3. This step is called journalizing.

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Question 20

Under a double-entry system, show how the entry in each statement is entered in the ledger by using debit or credit to indicate the increase or decrease in the affected account.

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Quiz 2: The Recording Process

Prepare journal entries for each of the following transactions. 1. Performed services for customers on account $8,000. 2. Purchased $20,000 of equipment on account. 3. Received $3,000 from customers in transaction 1. 4. The company paid dividends of $2,000.

Identify the accounts to be debited and credited for each of the following transactions. 1. Invested $8,000 cash in the business in exchange for stock. 2. Purchased supplies on account for $1,000. 3. Billed customers $2,000 for services performed. 4. Paid salaries of $1,200.

For each of the following accounts, indicate the effects of (a) a debit and (b) the normal account balance. 1. Notes Payable 2. Prepaid Insurance 3. Salaries and Wages Expense 4. Service Revenue 5. Equipment 6. Common Stock

For the accounts listed below, indicate if the normal balance of the account is a debit or credit.

The transactions of Medina Information Service are recorded in the general journal below. You are to post the journal entries to the accounts in the general ledger. After all entries have been posted, you are to prepare a trial balance on the form provided.

Under a double-entry system, show how the entry in each statement is entered in the ledger by using debit or credit to indicate the increase or decrease in the affected account.