Question 1

On December 3,the Matador Company paid $5,400 cash in salaries to office personnel.Prepare the general journal entry to record this transaction.

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Question 2

Krenz Car Care,owned and operated by Karl Krenz,began business in September of the current year.Karl,a master mechanic,had no experience with keeping a set of books.As a result,Karl entered all of September's transactions directly to the ledger accounts.When he tried to locate a particular entry he found it confusing and time consuming.He has hired you to improve his accounting procedures.The accounts in his General Ledger follow:
    Prepare the general journal entries,in chronological order (a)through (e),from the T-account entries shown.Include a brief description of the probable nature of each transaction.

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Question 3

Dolly Barton began Barton Office Services in October and during that month completed these transactions:
a.Invested $10,000 cash,and $15,000 of computer equipment.
b.Paid $500 cash for an insurance premium covering the next 12 months.
c.Completed a word processing assignment for a customer and collected $1,000 cash.
d.Paid $200 cash for office supplies.
e.Paid $2,000 for October's rent.
Prepare journal entries to record the above transactions.Explanations are unnecessary.

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Question 4

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

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Question 5

On February 5,Textron Stores purchased a van 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 6

A business paid $100 cash to Karen Smith (the owner of the business)for her 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 7

Indicate whether a debit or credit entry would be made to record the following changes in each account.
a.To decrease Cash
b.To increase Owner,Capital
c.To decrease Accounts Payable.
d.To increase Salaries Expense.
e.To decrease Supplies.
f.To increase Revenue.
g.To decrease Accounts Receivable.
h.To increase Owner,Withdrawals.

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Question 8

At year-end,Harris Cleaning Service noted the following errors in its trial balance:
1.It understated the total debits to the Cash account by $500 when computing the account balance.
2.A credit sale for $311 was recorded as a credit to the revenue account,but the offsetting debit was not posted.
3.A cash payment to a creditor for $2,600 was never recorded.
4.The $680 balance of the Prepaid Insurance account was listed in the credit column of the trial balance.
5.A $24,900 truck purchase was recorded as a $24,090 debit to Vehicles and a $24,090 credit to Notes Payable.
6.A purchase of office supplies for $150 was recorded as a debit to Office Equipment.The offsetting credit entry was correct.
7.An additional investment of $4,000 by Del Harris was recorded as a debit to Del Harris,Capital and as a credit to Cash.
8.The cash payment of the $510 utility bill for December was recorded (but not paid)twice.
9.The revenue account balance of $79,817 was listed on the trial balance as $97,817.
10.A $1,000 cash withdrawal was recorded as a $100 debit to Del Harris,Withdrawal and $100 credit to cash.
Using the form below,indicate whether each error would cause the trial balance to be out of balance,the amount of any imbalance,and whether a correcting journal entry is required.

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Question 9

A company had total assets of $350,000 and total liabilities of $101,500 and total equity of $248,500.Calculate its debt ratio.

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Question 10

The balances for the accounts of Mike's Maintenance Co.for the year ended December 31 are shown below.Each account shown had a normal balance.
  Calculate the correct balance for Cash and prepare a trial balance.

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Question 11

Maria Sanchez began business as Sanchez 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)Sanchez invested $15,000 cash and a law library valued at $6,000.
b)Purchased $7,500 of office equipment from Johnson Bros.on credit.
c)Completed legal work for a client and received $1,500 cash in full payment.
d)Paid Johnson Bros.$3,500 cash in partial settlement of the amount owed.
e)Completed $4,000 of legal work for a client on credit.
f)Sanchez 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.

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Question 12

The following is a list of accounts and identification letters A through J for Shannon Management Co.:
  Use the form below to identify the type of account and its normal balance.The first item is filled in as an example.

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Question 13

List the steps in recording transactions.

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Question 14

Montgomery Marketing Co.had assets of $475,000; liabilities of $275,500; and equity of $199,500.Calculate its debt ratio.

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Question 15

Identify each of the following items would likely serve as a source document by marking an X in the appropriate column.The first one is done as an example

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Question 16

Flora Accounting Services completed these transactions in February:
a.Purchased office supplies on account,$300.
b.Completed work for a client on credit,$500.
c.Paid cash for the office supplies purchased in (a).
d.Completed work for a client and received $800 cash.
e.Received $500 cash for the work described in (b).
f.Received $1,000 from a client for accounting services to be performed in March.
Prepare journal entries to record the above transactions.Explanations are not necessary.

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Question 17

A company paid $2,500 cash 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 18

_________________ identify and describe transactions and events and provide objective evidence and amounts for recording.

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Question 19

Based on the following trial balance for Sal's Beauty Shop,prepare an income statement,statement of owner's equity,and a balance sheet.Sal made no additional investments in the company during the year.
Sal's Beauty Shop
Trial Balance
December 31

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Question 20

Revenues and expenses are two categories of ____________________ accounts.

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Quiz 2: Analyzing and Recording Transactions