Question 1

Ralph Pine Consulting received its telephone bill in the amount of $300, and immediately paid it. Pine's general journal entry to record this transaction will include a
A)Debit to Cash for $300.
B)Debit to Accounts Payable for $300.
C)Credit to Telephone Expense for $300.
D)Debit to Telephone Expense for $300.
E)Credit to Accounts Payable for $300.

Accepted Answer

The answer of Ralph Pine Consulting received its telephone bill...

Question 2

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.
A)
$\begin{array}{|l|r|r|}
\hline \text { Prepaid Utilities } & 500 & \
\hline \text { Accounts Payable } & & 500 \
\hline
\end{array}$
B)
$\begin{array}{|l|r|r|}
\hline \text { Utilities Expense } & 500 & \
\hline \text { Cash } & & 500 \
\hline
\end{array}$
C)
$\begin{array}{|l|r|r|}
\hline \text { Cash } & 500 & \
\hline \text { Accounts Payable } & & 500 \
\hline
\end{array}$
D)
$\begin{array}{|l|r|r|}
\hline \text { Utilities Expense } & 500 & \
\hline \text { Accounts Payable } & & 500 \
\hline
\end{array}$
$$\begin{array}{l}
\text { E) }\
\begin{array} { | l | r | r | } 
\hline \text { Cash } & 500 & \
\hline \text { Utilities Expense } & & 500 \
\hline
\end{array}
\end{array}$$

Accepted Answer

The answer of J. Brown Consulting immediately paid $500 cash...

Question 3

Trimble Graphic Design receives $1,500 from a client billed in a previous month for services provided. Which of the following general journal entries will Trimble Graphic Design make to record this transaction?
A)
$\begin{array}{|l|r|r|}
\hline \text { Accounts Receivable } & 1,500 & \
\hline \text { Unearned Design Revenue } & & 1,500 \
\hline
\end{array}$
B)
$\begin{array}{|l|r|r|}
\hline \text { Cash } & 1,500 & \
\hline \text { Unearned Design Revenue } & & 1,500 \
\hline
\end{array}$
C)
$\begin{array}{|l|r|r|}
\hline \text { Cash } & 1,500 & \
\hline \text { Design Revenue } & & 1,500 \
\hline
\end{array}$
D)
$\begin{array}{|l|r|r|}
\hline \text { Accounts Receivable } & 1,500 & \
\hline \text { Cash } & & 1,500 \
\hline
\end{array}$
$$\begin{array}{l}
\text { E) }\
\begin{array} { | l | r | r | } 
\hline \text { Cash } & 1,500 & \
\hline \text { Accounts Receivable } & & 1,500 \
\hline
\end{array}
\end{array}$$

Accepted Answer

The answer of Trimble Graphic Design receives $1,500 from a...

Question 4

Jay's Limo Services paid $300 cash to employees for work performed in the current period. Which of the following general journal entries will Jay's Limo Services make to record this transaction?
A)
$\begin{array}{|l|r|r|}
\hline \text { Salaries Expense } & 300 & \
\hline \text { Accounts Payable } & & 300 \
\hline
\end{array}$
B)
$\begin{array}{|l|r|r|}
\hline \text { Salaries Expense } & 300 & \
\hline \text { Cash } & & 300 \
\hline
\end{array}$
C)
$\begin{array}{|l|r|r|}
\hline \text { Salaries Expense } & 300 & \
\hline \text { J. Smith, Withdrawals } & & 300 \
\hline
\end{array}$
D)
$\begin{array}{|l|r|r|}
\hline \text { Cash } & 300 & \
\hline \text { Salaries Expense } & & 300 \
\hline
\end{array}$
$$\begin{array}{l}
\text { E) }\
\begin{array} { | l | r | r | } 
\hline \text { Salaries Payable } & 300 & \
\hline \text { Salaries Expense } & & 300 \
\hline
\end{array}
\end{array}$$

Accepted Answer

The answer of Jay's Limo Services paid $300 cash to...

Question 5

ABC Catering received $800 cash from a customer for catering services to be provided next month. Given the choices below, determine the general journal entry that ABC Catering will make to record the cash receipt. Assume the company's policy is to initially record prepaid and unearned items in balance sheet accounts.
A)
$\begin{array}{|l|r|r|}
\hline \text { Cash } & 800 & \
\hline \text { Unearned Catering Revenue } & & 800 \
\hline
\end{array}$
B)
$\begin{array}{|l|r|r|}
\hline \text { Accounts Receivable } & 800 & \
\hline \text { Catering Revenue } & & 800 \
\hline
\end{array}$
C)
$\begin{array}{|l|r|r|}
\hline \text { Cash } & 800 & \
\hline \text { Accounts Receivable } & & 800 \
\hline
\end{array}$
D)
$\begin{array}{|l|r|r|}
\hline \text { Unearned Catering Revenue } & 800 & \
\hline \text { Catering Revenue } & & 800 \
\hline
\end{array}$
$$\begin{array}{l}
\text { E) }\
\begin{array} { | l | r | r | } 
\hline \text { Cash } & 800 & \
\hline \text { Catering Revenue } & & 800 \
\hline
\end{array}
\end{array}$$

Accepted Answer

The answer of ABC Catering received $800 cash from a...

Question 6

An asset created by prepayment of an insurance premium is:
A)Recorded as a credit to Prepaid Insurance.
B)Recorded as a credit to Unearned Revenue.
C)Recorded as a debit to Prepaid Insurance.
D)Not recorded in the accounting records until the insurance period expires.
E)Recorded as a debit to Unearned Revenue.

Accepted Answer

When an insurance premium is paid in advance, it is recorded as an asset known as Prepaid Insurance. It is recorded as a debit because the company has received a benefit but has not yet incurred the expense. Therefore, the best choice is C) Recorded as a debit to Prepaid Insurance.

Question 7

Willow Rentals purchased office supplies on credit. The general journal entry made by Willow Rentals will include a:
A)Debit to Accounts Receivable.
B)Credit to Accounts Payable.
C)Credit to Willow, Capital.
D)Debit to Accounts Payable.
E)Credit to Cash.

Accepted Answer

The answer of Willow Rentals purchased office supplies on credit....

Question 8

Golddigger Services Inc. provides services to clients. On May 1, a client prepaid Golddigger Services $60,000 for 6-months services in advance. Golddigger Services' general journal entry to record this transaction will include a:
A)Debit to Management Fees Earned for $60,000.
B)Credit to Management Fees Earned for $60,000.
C)Credit to Unearned Management Fees for $60,000.
D)Credit to Cash for $60,000.
E)Debit to Unearned Management Fees for $60,000.

Accepted Answer

The answer of Golddigger Services Inc. provides services to clients....

Question 9

J. Brown Consulting paid $2,500 cash for a 5-month insurance policy which begins on December
1. Given the choices below, determine the general journal entry that J. Brown Consulting will make to record the cash payment. Assume the company's policy is to initially record prepaid and unearned items in balance sheet accounts
A)
$\begin{array}{|l|r|r|}
\hline \text { Cash } & 2,500 & \
\hline \text { Insurance Expense } & & 2,500 \
\hline
\end{array}$
B)
$\begin{array}{|l|r|r|}
\hline \text { Prepaid Insurance } & 2,500 & \
\hline \text { Cash } & & 2,500 \
\hline
\end{array}$
C)
$\begin{array}{|l|r|r|}
\hline \text { Cash } & 2,500 & \
\hline \text { Prepaid Insurance } & & 2,500 \
\hline
\end{array}$
D)
$\begin{array}{|l|r|r|}
\hline \text { Insurance Expense } & 2,500 & \
\hline \text { Cash } & & 2,500 \
\hline
\end{array}$
$$\begin{array}{l}
\text { E) }\
\begin{array} { | l | r | r | } 
\hline \text { Insurance Expense } & 2,500 & \
\hline \text { Prepaid Insurance } & & 2,500 \
\hline
\end{array}
\end{array}$$

Accepted Answer

The answer of J. Brown Consulting paid $2,500 cash for...

Question 10

A law firm collected $1,800 for work to be performed in the following month. Which of the following general journal entries will the firm make to record this transaction?
A)Debit Cash, $1,800; credit Accounts Receivable, $1,800.
B)Debit Accounts Receivable, $1,800; credit Legal Fees Revenue, $1,800.
C)Debit Accounts Receivable, $1,800; credit Unearned 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.

Accepted Answer

The law firm received cash for work that has not yet been performed, so it should be recorded as unearned revenue. Therefore, the firm will debit Cash for $1,800 and credit Unearned Legal Fees Revenue for $1,800.

Question 11

Paul's Landscaping paid $500 on account for supplies purchased in the prior month. Which of the following general journal entries will Paul's Landscaping make to record this transaction?
A)Debit Accounts payable, $500; credit Cash, $500.
B)Debit Office supplies expense, $500; credit Cash, $500.
C)Debit Cash, $500; credit Office supplies, $500.
D)Debit Office supplies, $500; credit Accounts payable, $500.
E)Debit Office supplies, $500; credit Cash, $500.

Accepted Answer

The answer of Paul's Landscaping paid $500 on account for...

Question 12

J. Smith withdrew $100 from Jay's Limo Services for personal use. Which of the following general journal entries will Jay's Limo Services make to record this transaction?
A)
$\begin{array}{|l|r|r|}
\hline \text { J. Smith, Capital } & 100 & \
\hline \text { J. Smith, Withdrawals } & & 100 \
\hline
\end{array}$
B)
$\begin{array}{|l|r|r|}
\hline \text { J. Smith, Withdrawals } & 100 & \
\hline \text { J. Smith, Capital } & & 100 \
\hline
\end{array}$
C)
$\begin{array}{|l|r|r|}
\hline \text { Cash } & 100 & \
\hline \text { J. Smith, Withdrawals } & & 100 \
\hline
\end{array}$
D)
$\begin{array}{|l|r|r|}
\hline \text { Cash } & 100 & \
\hline \text { J. Smith, Capital } & & 100 \
\hline
\end{array}$
$$\begin{array}{l}
\text { E) }\
\begin{array} { | l | r | r | } 
\hline \text { J. Smith, Withdrawals } & 100 & \
\hline \text { Cash } & & 100 \
\hline
\end{array}
\end{array}$$

Accepted Answer

The answer of J. Smith withdrew $100 from Jay's Limo...

Question 13

Grills R Us Catering provided $1,000 of catering services and billed its client for the amount owed. Given the choices below, determine the general journal entry that Grills R Us Catering will make to record this transaction.
A)
$\begin{array}{|l|r|r|}
\hline \text { Cash } & 1,000 & \
\hline \text { Catering Revenue } & & 1,000 \
\hline
\end{array}$
B)
$\begin{array}{|l|r|r|}
\hline \text { Unearned Catering Revenue } & 1,000 & \
\hline \text { Catering Revenue } & & 1,000 \
\hline
\end{array}$
C)
$\begin{array}{|l|r|r|}
\hline \text { Catering Revenue } & 1,000 & \
\hline \text { Accounts Receivable } & & 1,000 \
\hline
\end{array}$
D)
$\begin{array}{|l|r|r|}
\hline \text { Accounts Receivable } & 1,000 & \
\hline \text { Catering Revenue } & & 1,000 \
\hline
\end{array}$
$$\begin{array}{l}
\text { E) }\
\begin{array} { | l | r | r | } 
\hline \text { Accounts Receivable } & 1,000 & \
\hline \text { Unearned Catering Revenue } & & 1,000 \
\hline
\end{array}
\end{array}$$

Accepted Answer

The answer of Grills R Us Catering provided $1,000 of...

Question 14

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?
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.

Accepted Answer

The law firm earned revenue of $1,800 for the work performed. This revenue needs to be recognized in the accounting records. The journal entry to record this transaction would be to debit Accounts Receivable for $1,800 (to recognize the increase in assets) and credit Legal Fees Revenue for $1,800 (to record the increase in revenue). Choice C correctly reflects this entry. Choice A is not correct because the firm did not receive cash payment yet. Choice B is not correct because the revenue has been earned, so it is not unearned. Choice D is not correct because the firm did not receive cash payment yet and the revenue has been earned. Choice E is not correct because it debits the wrong account.

Question 15

Wiley Consulting purchased $7,000 worth of supplies and paid cash immediately. Which of the following general journal entries will Wiley Consulting make to record this transaction? Assume the company's policy is to initially record prepaid and unearned items in balance sheet accounts.
A)
$\begin{array}{|l|r|r|}
\hline \text { Supplies Expense } & 7,000 & \
\hline \text { Accounts Payable } & & 7,000 \
\hline
\end{array}$
B)
$\begin{array}{|l|r|r|}
\hline \text { Supplies } & 7,000 & \
\hline \text { Cash } & & 7,000 \
\hline
\end{array}$
C)
$\begin{array}{|l|r|r|}
\hline \text { Supplies } & 7,000 & \
\hline \text { Accounts Payable } & & 7,000 \
\hline
\end{array}$
D)
$\begin{array}{|l|r|r|}
\hline \text { Accounts Payable } & 7,000 & \
\hline \text { Supplies } & & 7,000 \
\hline
\end{array}$
$$\begin{array}{l}
\text { E) }\
\begin{array} { | l | r | r | } 
\hline \text { Cash } & 7,000 & \
\hline \text { Supplies } & & 7,000 \
\hline
\end{array}
\end{array}$$

Accepted Answer

The answer of Wiley Consulting purchased $7,000 worth of supplies...

Question 16

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?
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.

Accepted Answer

The answer of Richard Redden contributed $70,000 in cash and...

Question 17

A double-entry accounting system is an accounting system:
A)That may only be used if T-accounts are used.
B)That insures that errors never occur.
C)In which each transaction affects and is recorded in two or more accounts but that could include two debits and no credits.
D)That records the effects of transactions and other events in at least two accounts with equal debits and credits.
E)That records each transaction twice.

Accepted Answer

A double-entry accounting system records the effects of transactions and other events in at least two accounts with equal debits and credits. This ensures that the accounting equation (Assets = Liabilities + Equity) always remains in balance and helps prevent errors. It is not necessary to use T-accounts specifically in order to use a double-entry accounting system. Choice A is incorrect. It is possible for errors to occur in a double-entry accounting system despite its safeguards. Choice B is incorrect. It is possible for a transaction to affect more than two accounts, but at least two accounts must be affected. Choice C is incorrect. Two debits and no credits would not result in a balanced accounting equation.

Question 18

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?
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.

Accepted Answer

The answer of A law firm collected $1,800 on account...

Question 19

Able Graphics received a $400 utility bill for the current month's electricity. It is not due until the end of the next month which is when they intend to pay it. Which of the following general journal entries will Able Graphics make to record this transaction?
A)
$\begin{array}{|l|l|l|}
\hline \text { No journal entry is required } & & \
\hline & & \
\hline
\end{array}$
B)
$\begin{array}{|l|r|r|}
\hline \text { Utilities Expense } & 400 & \
\hline \text { Cash } & & 400 \
\hline
\end{array}$
C)
$\begin{array}{|l|r|r|}
\hline \text { Utilities Expense } & 400 & \
\hline \text { Accounts Payable } & & 400 \
\hline
\end{array}$
D)
$\begin{array}{|l|r|r|}
\hline \text { Accounts Payable } & 400 & \
\hline \text { Utilities Expense } & & 400 \
\hline
\end{array}$
$$\begin{array}{l}
\text { E) }\
\begin{array} { | l | r | r | } 
\hline \text { Cash } & 400 & \
\hline \text { Utilities Expense } & & 400 \
\hline
\end{array}
\end{array}$$

Accepted Answer

The answer of Able Graphics received a $400 utility bill...

Question 20

Paul's Landscaping purchased $500 of office supplies on credit. The company's policy is to initially record prepaid and unearned items in balance sheet accounts. Which of the following general journal entries will Paul's Landscaping make to record this transaction?
A)Debit Accounts payable, $500; credit Office supplies, $500.
B)Debit Cash, $500; credit Office supplies, $500.
C)Debit Office supplies, $500; credit Accounts payable, $500.
D)Debit Office supplies, $500; credit Cash, $500.
E)Debit Office supplies expense, $500; credit Cash, $500.

Accepted Answer

Paul's Landscaping purchased office supplies on credit, which means they have not yet paid for the supplies. Therefore, the transaction should be recorded as a liability (accounts payable) and an asset (office supplies). Option C reflects this by debiting Office supplies (an asset) and crediting Accounts payable (a liability), which is the correct way to record the purchase of items on credit in accordance with the company's policy.

Quiz 2: Analyzing and Recording Transactions

Ralph Pine Consulting received its telephone bill in the amount of $300, and immediately paid it. Pine's general journal entry to record this transaction will include a

An asset created by prepayment of an insurance premium is:

Willow Rentals purchased office supplies on credit. The general journal entry made by Willow Rentals will include a:

Golddigger Services Inc. provides services to clients. On May 1, a client prepaid Golddigger Services $60,000 for 6-months services in advance. Golddigger Services' general journal entry to record this transaction will include a:

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

Paul's Landscaping paid $500 on account for supplies purchased in the prior month. Which of the following general journal entries will Paul's Landscaping make to record this transaction?

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?

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?

A double-entry accounting system is an accounting system:

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?

Paul's Landscaping purchased $500 of office supplies on credit. The company's policy is to initially record prepaid and unearned items in balance sheet accounts. Which of the following general journal entries will Paul's Landscaping make to record this transaction?