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

Misa Chien and Jennifer Green founded Nom Nom Truck. What are some accounting challenges they faced when starting their business?

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Question 3

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 4

Explain the recording and posting processes.

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Question 5

A company sends a $1,500 bill to a customer for delivery services rendered. Set up the necessary T-accounts below and show how this transaction would be recorded directly in those accounts.

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Question 6

Dolly Barton began Barton Office Services in October and during the month completed the following transactions:
a. Invested $10,000 cash and $15,000 of computer equipment in exchange for common stock.
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 7

Leonard Matson completed these transactions during December of the current year:
  Prepare general journal entries to record these transactions.

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Question 8

Krenz Car Care, which is owned and operated by Karl Krenz, began business as a corporation 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 to be confusing and time consuming. He has hired you to improve his accounting procedures. The accounts in his general ledger are as follows:

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 9

A business paid a $100 cash dividend. Assume the company had a $2,000 balance in cash immediately prior to this transaction and that this was the first time dividends had ever been paid. Set up the necessary T-accounts below and show how this transaction would be recorded directly in those accounts. Show ending account balances.

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Question 10

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 in exchange for common stock.
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. Paid a $2,000 cash dividend.
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 11

What is a trial balance? What is its purpose?

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Question 12

On October 1, 2011, Smith invested $20,000 cash, office equipment costing $15,000, and drafting equipment costing $12,000 into the company in exchange for common stock. Show the general journal entry to record this transaction.

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Question 13

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 14

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 Common Stock.
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 Retained Earnings.

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Question 15

On February 5, Textron Stores purchased a van that had a cost of $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 16

Josephine's Bakery had the following assets and liabilities at the beginning and end of the current year:
 $\begin{array}{|l|r|r|}
\hline & \text { Assets } & \text { Liabilities } \
\hline \text { Beginning of the year } & \$ 114,000 & \$ 68,000 \
\hline \text { End of the year } & 135,000 & 73,000 \
\hline
\end{array}$ If the owners made no investments and dividends of $5,000 were paid during the year, what was the amount of net income earned by Josephine's Bakery during the current year?

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Question 17

Identify which 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 18

The balances for the accounts of Lance's Consulting Firm, Inc. for the year ended December 31 are shown below. Each account shown had a normal balance.
$$\begin{array} { l r l r } 
\text { Accounts payable } & \$ 6,400 & \text { Wages expense } & \$ 35,000 \
\text { Accounts receivable } & 7,000 & \text { Rent expense } & 5,000 \
\text { Cash } & 10,000 & \text { Retained earnings } & 68,700 \
\text { Office supplies } & 1,000 & \text { Land } & 53,000 \
\text { Building } & 99,000 & \text { Unearned revenue } & 7,000 \
\text { Supplies expense } & 15,000 & \text { Dividends } & 20,000 \
\text { Consulting revenue } & 150,000 & \text { Common stock } & 12,900
\end{array}$$
Calculate total assets.

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Question 19

The third step in the analyzing and recording process is to post the information to _________________________.

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Question 20

Based on the following trial balance for Sal's Beauty Shop, prepare an income statement, statement of retained earnings and a balance sheet. Sal made no additional investments in the company during the year.
 SAI'S BEAUTY SHOP
Trial Balarice
December 31
$\begin{array}{|l|r|r|}
\hline \text { Cash } & \$ 6,500 & \
\hline \text { Accounts receivable } & 475 & \
\hline \text { Beauty supplies } & 2,500 & \
\hline \text { Beauty shop equipment } & 17,000 & \
\hline \text { Accounts payable } & & \$ 745 \\hline \text { Common stock } & & 10,000 \
\hline \text { Retained earnings } & & 11,155 \
\hline \text { Dividends } & 36,000 & \
\hline \text { Revenue earned } & & 72,000 \\hline \text { Beauty supplies expense } & 3,425 & \
\hline \text { Rent expense } & 6,000 & \
\hline \text { Wages expense } & 22,000 & \
\hline \text { Totals } & \$ 93,900 & \$ 93,900 \
\hline
\end{array}$

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Quiz 2: Accounting for Transactions