Question 1

On December 3, the ABBJ Company paid $1,400 cash in salaries to office personnel. Prepare the general journal entry to record this transaction.

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Question 2

Identify by marking an X in the appropriate column, whether each of the following items would likely serve as a source document. The first one is done as an example.
 $$\begin{array} { | l | l | l | l | } 
\hline & & \text { Yes } & \text { No } \
\hline \text { Ex. } & \text { Credit eard } & & \mathrm { X } \
\hline \text { a. } & \text { Credit eard receipt } & & \
\hline \text { b. } & \text { Purchase order } & & \
\hline \text { c. } & \text { Invoice } & & \
\hline \text { d. } & \text { Balance sheet } & & \
\hline \text { e. } & \text { Bark statement } & & \
\hline \text { f. } & \text { Jounnal entry } & & \
\hline \text { g. } & \text { Telephone bill } & & \
\hline \text { h. } & \text { Employee earnings record } & & \
\hline
\end{array}$$

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Question 3

Explain the debt ratio and its use in analyzing a company's financial condition.

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Question 4

Describe the link between a business's income statement, the statement of owner's equity, and the balance sheet.

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Question 5

Explain debits and credits and their role in the accounting system of a business.

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Question 6

BBB Company sends a $2,500 invoice to a customer for catering services it provided during the month. Set up the necessary T-accounts below and show how this transaction would be recorded directly in those accounts.

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Question 7

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

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Question 8

Using the following list of accounts and identification letters A through J for Homer's Management Co., enter the type of account and its normal balance into the table below. The first item is filled in as an example:
 $\begin{array}{ll}
\text { A. Homer, Capital } & \text { F. Prepaid Rent } \
\text { B. Interest Payable } & \text { G. Advertising Expense } \
\text { C. Land } & \text { H. Unearned Rent Revenue } \
\text { D. Homer, Withdrawals } & \text { I. Commissions Earned } \
\text { E. Fees Earned } & \text { J. Notes Receivable }
\end{array}$ 
 $$\begin{array} { l | c | c | c | c | c } 
&{ \text { Type of Account } } &&& { \text { Normal Bal ance } } \
\hline & \text { Astst } & \text { Liability } & \text { Equity } & \text { Debit } & \text { Credit } \
\hline \text { A } & & & \text { X } & & \text { X } \
\hline \text { B } & & & & & \
\hline \text { C } & & & & & \
\hline \text { D } & & & & & \
\hline \text { E } & & & & & \
\hline \text { F } & & & & & \
\hline \text { G } & & & & & \
\hline \text { H } & & & & & \
\hline \text { I } & & & & & \
\hline \text { J } & & & & & \
\hline
\end{array}$$

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Question 9

Describe what source documents are and the purpose they serve in a business.

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Question 10

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

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Question 11

A business paid $100 cash to Charles Nice (the owner of the business)for his personal use. Set up the necessary T-accounts below and show how this transaction would be recorded directly in those accounts.

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Question 12

Explain the difference between a general ledger and a chart of accounts.

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Question 13

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.

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Question 14

Drew Castle is an insurance appraiser. Shown below are (a)several accounts in his ledger with each account preceded by an identification number, and (b)several transactions completed by Castle. Indicate the accounts debited and credited when recording each transaction by placing the proper account identification numbers to the right of each transaction.
$\begin{array} { l l}
 \text {1. Accounts Payable }& \text { 8. Office Supplies Expense} \
 \text {2. Accounts Receivable }& \text {9. Prepaid Insurance } \
 \text {3. Appraisal Fees Earned }& \text {10. Salaries Expense } \
 \text {4. Cash }& \text {11. Telephone Expense } \
 \text {5. Insurance Expense }& \text { 12. Unearned Appraisal Fees} \
 \text {6. Office Equipment }& \text { 13. Drew Castle, Capital} \
 \text { 7. Office Supplies}& \text {14. Drew Castle, Withdrawals } \
\end{array}$

$\begin{array} { ll  }
& \text {Example: } \
& \text {Completed an appraisal tor a client who promised to } \
& \text {pay at a later date. } \
& \text {Received cash in advance for appraising a hail damage } \
 \text { A.}& \text { claim} \
& \text {Purchased office supplies on credit } \
 \text { B.}& \text {Drew Castle used cash from the business to pay his  } \
& \text {home telephone bill. There were no business calls on } \
 \text { C.}& \text { the bill.} \
& \text {Received the telephone bill of the business and  } \
 \text {D. }& \text {immediately paid it } \ \text {E. }& \text { Paid the salary of the office assistant.} \
 \text {F. }& \text { Paid for the supplies purchased in transaction} \&B\
 \text {G. }& \text { Completed an sppraisal for a client and immediately } \
& \text {collected cash for the work done. } \

\end{array}$

$\begin{array}{c|c}
\hline \text { Debit } & \text { Credit } \
\hline & \
\hline 2 & 3 \\hline & \\hline & \\hline & \\hline & \\hline & \\hline & \
\hline
\end{array}$

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Question 15

What is a trial balance? What is its purpose?

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Question 16

Match between columns
                        Premises: Compound journal entry
T-account
Posting
Trial Balance
Unearned revenues
Account
General journal
Posting reference column
Chart of accounts
Note receivable

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The Answer of A journal entry that affects at least is...

Question 17

Match between columns
                        Premises: Prepaid Insurance
Owner, Capital
Office Furniture
Fees Revenue
Equipment
Salary Expense
Cash
Unearned Revenue
Accounts Receivable
Accounts Payable
Supplies
Owner, Withdrawals

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The Answer of asset and liability and expense and equity is...

Question 18

Match between columns
                        Premises: To increase Salaries Expense.
To decrease Cash
To decrease Accounts Receivable.
To increase Owner, Capital
To increase Owner, Withdrawals.
To decrease Accounts Payable.
To decrease Supplies.
To increase Revenue.

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Quiz 2: Analyzing and Recording Transactions