Question 1

On June 1, the cash account balance was $96,750. During June, cash receipts totaled $305,000 and the June 30 balance was $75,880. Determine the cash payments made during June.

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Question 2

On November 1st Nikle Company made a cash payment of $200,000 on a note payable that was generated in the purchase of a building and land plot. Write the journal entry for this payment in the space below.

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The answer of On November 1st Nikle Company made a...

Question 3

For the following, mark a "D" if the following account normally has a debit balance and mark a "C" if the following account normally has a credit balance.
. Notes Payable
_____2. Mortgage Payable
_____3. Drawing
_____4. Accounts Receivable
_____5. Capital
_____6. Rent Revenue
_____7. Unearned Income
_____8. Utility Expense
_____9. Automobiles

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The answer of For the following, mark a "D" if...

Question 4

Damien Lawson invests $45,000 to initiate the operation of his business, JumpStart, on January 7th. Journalize this transaction.

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The answer of Damien Lawson invests $45,000 to initiate the...

Question 5

Prepare a journal entry for the purchase of a truck on April 4 for $85,700, paying $15,000 cash and the remainder on account.

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Question 6

On October 10th, Nikle Company purchased supplies worth $1,800 on account.
(a) Write the journal entry in the space below.
(b) Nikle Company paid this bill on October 25th. Write the journal entry in the space below.

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Question 7

Journalize the entries to correct the following errors:

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Question 8

On October 30th Damien Lawson withdraws $3,330 from JumpStart for personal use. Journalize this event.

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Question 9

The purchase of supplies on account was recorded and posted as a debit to Supplies for $500 and a credit to Accounts Receivable for $500. The correcting entry would include a:

Accepted Answer

The original entry incorrectly recorded the purchase as a sale on account, resulting in a debit to Supplies and a credit to Accounts Receivable. The correcting entry should reverse this by debiting Accounts Payable (to reflect the actual purchase on account) and crediting Supplies (to reflect the decrease in the asset). The correcting entry should not affect Accounts Receivable, as there was no actual sale. Therefore, the correct choice is C, which involves a credit to Accounts Payable for the full amount of $500. The other choices (B) and (D) involve incorrect double-counting of the transaction, which would result in inaccurate financial statements.

Question 10

The following errors took place in journalizing and posting transactions:
  Journalize the entries to correct the errors. Omit the explanations.

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The answer of The following errors took place in journalizing...

Question 11

On January 1, 2010, Cary Parsons established a catering service. Listed below are accounts to use for transactions (a) through (d), each identified by a number. Following this list are the transactions that occurred during the first month of operations. You are to indicate for each transaction the accounts that should be debited and credited by placing the account number(s) in the appropriate box.

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The answer of On January 1, 2010, Cary Parsons established...

Question 12

On November 30th, Damien Lawson is informed by his accountant that $550 of a transaction recording the purchase of office supplies was really office equipment. He has been asked to correct this journal entry. Write the journal entry to correct this situation.

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Question 13

On September 1st, Erika Company purchased land for $47,500 cash. Write the journal entry in the space below.

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Question 14

Discuss and describe how errors in accounts can be found.

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Question 15

On January 8th, Damien Lawson transfers ownership of several pieces of office equipment to his new business, JumpStart. When new, these items were worth $72,500. The fair market value of the equipment is $60,000. Journalize this transfer.

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Question 16

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. Also, indicate the normal balance of each account.

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The answer of State for each account whether it is...

Question 17

On October 17th Nikle Company purchased a building and a plot of land for $750,000. The building was valued at $500,000 while the land carried a value of $250,000. Nikle paid $300,000 down in cash and signed a notes payable for the balance. In the space below write the journal entry.

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The answer of On October 17th Nikle Company purchased a...

Question 18

For each of the following errors, considered individually, indicate whether the error would cause the trial balance totals to be unequal. If the error would cause the trial balance total to be unequal, indicate whether the debit or credit total is higher and by how much.

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Question 19

Prepare a journal entry on October 12 for the fees earned on account, $14,600.

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Question 20

The chart of accounts classify the accounts to make identification of the accounts easier. Discuss how companies set up their chart of accounts for use in their business

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Quiz 2: Analyzing Transactions