Question 1

Sue's Book Review billed customers $550. The journal entry to record this transaction is:

Accepted Answer

When a business bills its customers, it means the business has earned revenue but has not yet received payment, increasing Accounts Receivable. The credit to Editing Fees recognizes the revenue earned from the service provided.

Question 2

The journal entry to record a shift of assets would include:

Accepted Answer

Shifting assets from Accounts Receivable to Cash involves debiting Cash and crediting Accounts Receivable.

Question 3

Which of the following accounts would be debited in a proper journal entry?

Accepted Answer

The answer of Which of the following accounts would be...

Question 4

Renzi's Volleyball Gym purchased equipment for $1,300. It made a down payment of $500 with the remainder on account. The journal entry to record this transaction is:

Accepted Answer

The answer of Renzi's Volleyball Gym purchased equipment for $1,300....

Question 5

During the month of October, Ford advertised on the Internet. Ford received the bill for $500 in October, but waited until November to pay the advertising expense. The journal entry to record the payment in November is:

Accepted Answer

The correct journal entry to record the payment of an expense previously incurred (and likely recorded as a payable) is to debit Accounts Payable, reducing the liability, and to credit Cash, reflecting the outflow of cash to settle the payable.

Question 6

Bob's catered a reception. The total price was $600. The customer paid half of the fee in cash and placed the remainder on account. The journal entry to record this transaction is:

Accepted Answer

The answer of Bob's catered a reception. The total price...

Question 7

A transaction completed by Norton Company caused a $10,000 increase in both the total assets and the total liabilities. This transaction could have been:

Accepted Answer

The transaction described in choice A increases assets (office equipment) by $16,000 and increases liabilities (amount owed on account) by $10,000, while also decreasing another asset (cash) by $6,000. The net effect is an increase in assets by $10,000 (the $16,000 equipment minus the $6,000 cash) and an increase in liabilities by $10,000, matching the scenario described.

Question 8

Interim statements are prepared to:

Accepted Answer

Interim statements serve multiple purposes: they inform both management and investors about the company's current financial position and allow management to make informed decisions and adjustments before the year-end financial statements are finalized.

Question 9

As Withdrawals increase:

Accepted Answer

Withdrawals by the owner from the business result in a decrease in cash because the business is using its cash to pay the owner.

Question 10

On July 1, Bill's Construction paid six months' insurance in advance. The journal entry to record this transaction is:

Accepted Answer

When a company pays for insurance in advance, it records the payment as an asset (Prepaid Insurance) because it represents future economic benefits. The payment decreases the company's cash, so Cash is credited.

Question 11

Conner Sales' total assets and total liabilities increased $3,400. The transaction could have been:

Accepted Answer

The purchase of supplies for $3,700 with a down payment of $300 and the remainder on account increases both assets (supplies) and liabilities (accounts payable) by $3,400.

Question 12

A calendar year is:

Accepted Answer

A calendar year is specifically the 12-month period beginning with January and ending with December.

Question 13

The journal entry to record an investment by the owner would most commonly include:

Accepted Answer

When an owner invests in their business, the company receives cash (or other assets), which increases the Cash account (an asset account) through a debit. Simultaneously, the owner's equity in the company increases, which is recorded by crediting the Capital account. This reflects the owner's increased investment in the business.

Question 14

The journal entry to record a withdrawal by the owner would most commonly include:

Accepted Answer

Withdrawals by the owner are recorded by debiting the Withdrawals account, which represents a reduction in the owner's equity, and crediting Cash, indicating a decrease in the company's cash balance.

Question 15

The general journal does NOT have a column titled:

Accepted Answer

The general journal typically includes columns for Date, Account Titles & Descriptions, and Debit (Dr.) and Credit (Cr.) amounts, but it does not include a column for Balance. The balance is usually tracked within individual ledger accounts, not in the general journal.

Question 16

The general journal entry to record the purchase of an asset for cash would include:

Accepted Answer

When purchasing an asset for cash, the asset account (Supplies) is debited to increase it, and the Cash account is credited to decrease it.

Question 17

If Accounts Payable has been credited, it is most likely that:

Accepted Answer

When Accounts Payable is credited, it indicates that the company has incurred a liability, typically from purchasing goods or services on credit, which it will pay for in the future.

Question 18

CSI completed a performance and collected revenue of $12,000 not previously billed or recorded. The journal entry to record the collection would be:

Accepted Answer

The answer of CSI completed a performance and collected revenue...

Question 19

If Accounts Receivable has been credited, it is most likely that:

Accepted Answer

When Accounts Receivable is credited, it typically means a reduction in the amount owed to the company, which usually occurs when a payment is collected from a customer.

Question 20

The entry to record completing a financial lecture and immediately collecting payment from customers would be:

Accepted Answer

The answer of The entry to record completing a financial...

Quiz 3: Beginning the Accounting Cycle