Question 1

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

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Question 2

For each of the following errors,indicate on the table below the amount by which the trial balance will be out of balance and which trial balance column (debit or credit) will have the larger total as a result of the error.
a.$100 debit to Cash was debited to the Cash account twice.
b.$1,900 credit to Sales was posted as a $190 credit.
c.$5,000 debit to Office Equipment was debited to Office Supplies.
d.$625 debit to Prepaid Insurance was posted as a $62.50 debit.
e.$520 credit to Accounts Payable was not posted.

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Question 3

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 4

Josephine's Bakery had the following assets and liabilities at the beginning and end of the current year:
  If the owners invested an additional $12,000 in the business 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 5

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 6

A company paid $2,500 cash to satisfy a previously recorded account payable,the only liability on the books.Assume the company had a $4,000 balance in Cash immediately prior to this transaction.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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The answer of A company paid $2,500 cash to satisfy...

Question 7

Josephine's Bakery had the following assets and liabilities at the beginning and end of the current year:
  If the owners made no investments in the business and no dividends 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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The answer of Josephine's Bakery had the following assets and...

Question 8

The balances for the accounts of Mike's Maintenance,Inc.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 9

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 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.

Accepted Answer

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Question 11

After preparing an (unadjusted) trial balance at year-end, G. Chu of Chu Design Company discovered the following errors:
1.Cash payment of the $225 telephone bill for December was recorded twice.
2.Cash payment of a note payable was recorded as a debit to Cash and a debit to Notes
Payable for $1,000.
3.A $900 cash dividend was recorded to the correct accounts as $90.
4.An additional investment of $5,000 cash by the owner was recorded as a debit to Common
Stock and a credit to Cash.
5.A credit purchase of office equipment for $1,800 was recorded as a debit to the Office Equipment account with no offsetting credit entry.
Using the form below,indicate whether the error would cause the trial balance to be out of balance by placing an X in either the yes or no column.

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The answer of After preparing an (unadjusted) trial balance at...

Question 12

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 13

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 14

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 15

Josephine's Bakery had the following assets and liabilities at the beginning and end of the current year:
  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 16

Michael Jansen starts a business called Crafty Cleaning.The following events occurred during its first month of business.Prepare journal entries to record these transactions.

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Question 17

World Wide Webster (WWW),which is owned and operated by Wally Wrobel,a master website designer.The business began business as a corporation in April of the current year.The following transactions and events took place during April of the current year:
  Prepare journal entries to record these transactions.

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Question 18

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

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Question 19

The following trial balance was prepared from the general ledger of Hal's Auto Repair.

Since the trial balance did not balance, you decided to examine the accounting records. You found that the following errors had been made: 
1.A purchase of supplies on account for $245 was posted as a debit to Supplies and as a debit
to Accounts Payable.
2.An investment of $500 cash by the owner was debited to Common Stock and credited to
Cash.
3.In computing the balance of the Accounts Receivable account,a debit of $600 was omitted
from the computation.
4.One debit of $300 to the Dividends account was posted as a credit.
5.Office equipment purchased for $800 was posted to the Repair Equipment account.
6.One entire entry was not posted to the general ledger.The transaction involved the receipt
of $125 cash at the time repair services were performed.
Prepare a corrected trial balance for the Hal's Auto Repair as of October 31.

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The answer of The following trial balance was prepared from...

Question 20

The second step in the analyzing and recording process is to record the transactions and events in the _____________________________.

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Quiz 2: Accounting System and Financial Statements

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

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.

Josephine's Bakery had the following assets and liabilities at the beginning and end of the current year: If the owners made no investments in the business and no dividends were paid during the year,what was the amount of net income earned by Josephine's Bakery during the current year?

The balances for the accounts of Mike's Maintenance,Inc.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.

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

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.

Josephine's Bakery had the following assets and liabilities at the beginning and end of the current year: 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?

Michael Jansen starts a business called Crafty Cleaning.The following events occurred during its first month of business.Prepare journal entries to record these transactions.

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

The second step in the analyzing and recording process is to record the transactions and events in the _____________________________.