Question 1

Merriweather Post Pavillion received a $820 check from a customer for the balance due. The transaction was erroneously recorded as a debit to Cash $280 and a credit to Service Revenue $280. The correcting entry is

Accepted Answer

The correcting entry should debit Cash for the correct amount of $820 and also correct the credit entry by splitting it between Service Revenue and Accounts Receivable. The correct split is $280 to Service Revenue (since this was correctly recorded initially) and $540 to Accounts Receivable (to account for the remaining balance owed by the customer). Therefore, option C is the correct entry.

Question 2

The following information is for Sunny Day Real Estate:  The total dollar amount of assets to be classified as investments is

Accepted Answer

The answer of The following information is for Sunny Day...

Question 3

Which of the following steps in the accounting cycle may be performed most frequently?

Accepted Answer

Preparing a trial balance is typically done at the end of each accounting period to ensure that debits equal credits and to detect any errors. This step is performed most frequently throughout the accounting cycle.

Question 4

On May 25, Yellow House Company received a $650 check from Grizzly Bean for services to be performed in the future. The bookkeeper for Yellow House Company incorrectly debited Cash for $650 and credited Accounts Receivable for $650. The amounts have been posted to the ledger. To correct this entry, the bookkeeper should:

Accepted Answer

Since the check was received for services to be performed in the future, it should be recorded as Unearned Service Revenue, a liability account. Therefore, to correct the entry, the bookkeeper should debit Accounts Receivable (to decrease it) and credit Unearned Service Revenue (to increase it) for $650.

Question 5

On March 8, Black Candy Company bought supplies on account from the Arcade Fire Company for $550. Black Candy Company incorrectly debited Equipment for $500 and credited Accounts Payable for $500. The entries have been posted to the ledger. the correcting entry should be:

Accepted Answer

The answer of On March 8, Black Candy Company bought...

Question 6

A correcting entry

Accepted Answer

A correcting entry may involve any combination of accounts, not just one balance sheet account and one income statement account. It is used to correct errors made in previous accounting entries and is a required step in the accounting cycle. It is not the same as a closing entry, which is used to transfer temporary account balances to permanent accounts at the end of an accounting period.

Question 7

A lawyer collected $710 of legal fees in advance. He erroneously debited Cash for $170 and credited Accounts Receivable for $170. The correcting entry is

Accepted Answer

The answer of A lawyer collected $710 of legal fees...

Question 8

The two optional steps in the accounting cycle are preparing

Accepted Answer

The two optional steps in the accounting cycle are preparing reversing entries and a worksheet. Reversing entries are made at the beginning of the new accounting period to reverse or cancel out adjusting entries made at the end of the previous period, and they are optional because not all businesses find them necessary. A worksheet is a tool used for planning and is not mandatory for the accounting cycle.

Question 9

The following information is for Bright Eyes Auto Supplies:  The total dollar amount of assets to be classified as current assets is

Accepted Answer

The answer of The following information is for Bright Eyes...

Question 10

The following information is for Sunny Day Real Estate:  The total dollar amount of liabilities to be classified as current liabilities is

Accepted Answer

The answer of The following information is for Sunny Day...

Question 11

Zen Arcade paid the weekly payroll on January 2 by debiting Salaries and Wages Expense for $47,000. The accountant preparing the payroll entry overlooked the fact that Salaries and Wages Expense of $27,000 had been accrued at year end on December 31. The correcting entry is

Accepted Answer

The answer of Zen Arcade paid the weekly payroll on...

Question 12

The following information is for Sunny Day Real Estate:  The total dollar amount of assets to be classified as property, plant, and equipment is

Accepted Answer

The answer of The following information is for Sunny Day...

Question 13

An unacceptable way to make a correcting entry is to

Accepted Answer

Erasing the incorrect entry is not an acceptable way to make a correcting entry as it is not possible to determine what the original entry was or what caused the error. It also can create doubts about the accuracy and integrity of the accounts. The other options, such as reversing the incorrect entry or making a correcting entry, are acceptable ways to correct errors. It is important to correct errors immediately upon discovery to ensure accurate financial statements.

Question 14

If errors occur in the recording process, they

Accepted Answer

Errors should be corrected as soon as they are discovered to ensure accurate financial information. Delaying corrections until the end of the period or until closing entries are prepared can result in further mistakes and inaccuracies. Corrections should be made through adjusting entries and documented for audit purposes.

Question 15

The first required step in the accounting cycle is

Accepted Answer

Analyzing transactions is the first step in the accounting cycle as it involves reviewing and interpreting the transactions to determine their effects on the financial statements. This step helps in identifying the accounts to be debited and credited in the journal entries which are made in the next step, i.e., journalizing transactions in the book of original entry. The remaining steps in the accounting cycle include posting transactions, preparing a trial balance, adjusting entries, preparing financial statements, and closing entries.

Question 16

Jawbreaker Company paid $940 on account to a creditor. The transaction was erroneously recorded as a debit to Cash of $490 and a credit to Accounts Receivable, $490. The correcting entry is

Accepted Answer

The answer of Jawbreaker Company paid $940 on account to...

Question 17

Which of the following depicts the proper sequence of steps in the accounting cycle?

Accepted Answer

The proper sequence of steps in the accounting cycle is to first prepare a trial balance, then prepare adjusting entries, and finally prepare financial statements. Journalizing transactions and analyzing business transactions typically occur before the accounting cycle begins, and posting to ledger accounts comes after adjusting entries have been made. Therefore, option C is the correct sequence.

Question 18

Correcting entries

Accepted Answer

Correcting entries may involve any combination of accounts that need correction. This includes both balance sheet and income statement accounts.

Question 19

The following information is for Sunny Day Real Estate:  The total dollar amount of assets to be classified as current assets is

Accepted Answer

The answer of The following information is for Sunny Day...

Question 20

The following information is for Bright Eyes Auto Supplies:  The total dollar amount of assets to be classified as property, plant, and equipment is

Accepted Answer

The answer of The following information is for Bright Eyes...

Quiz 4: Completing the Accounting Cycle

Merriweather Post Pavillion received a $820 check from a customer for the balance due. The transaction was erroneously recorded as a debit to Cash $280 and a credit to Service Revenue $280. The correcting entry is

The following information is for Sunny Day Real Estate: The total dollar amount of assets to be classified as investments is

Which of the following steps in the accounting cycle may be performed most frequently?

On March 8, Black Candy Company bought supplies on account from the Arcade Fire Company for $550. Black Candy Company incorrectly debited Equipment for $500 and credited Accounts Payable for $500. The entries have been posted to the ledger. the correcting entry should be:

A correcting entry

A lawyer collected $710 of legal fees in advance. He erroneously debited Cash for $170 and credited Accounts Receivable for $170. The correcting entry is

The two optional steps in the accounting cycle are preparing

The following information is for Bright Eyes Auto Supplies: The total dollar amount of assets to be classified as current assets is

The following information is for Sunny Day Real Estate: The total dollar amount of liabilities to be classified as current liabilities is

Zen Arcade paid the weekly payroll on January 2 by debiting Salaries and Wages Expense for $47,000. The accountant preparing the payroll entry overlooked the fact that Salaries and Wages Expense of $27,000 had been accrued at year end on December 31. The correcting entry is

The following information is for Sunny Day Real Estate: The total dollar amount of assets to be classified as property, plant, and equipment is

An unacceptable way to make a correcting entry is to

If errors occur in the recording process, they

The first required step in the accounting cycle is

Jawbreaker Company paid $940 on account to a creditor. The transaction was erroneously recorded as a debit to Cash of $490 and a credit to Accounts Receivable, $490. The correcting entry is

Which of the following depicts the proper sequence of steps in the accounting cycle?

Correcting entries

The following information is for Sunny Day Real Estate: The total dollar amount of assets to be classified as current assets is

The following information is for Bright Eyes Auto Supplies: The total dollar amount of assets to be classified as property, plant, and equipment is