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Exam 2: Debits and Credits: Analyzing and Recording Business Transactions

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Question 51

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Which of the following entries records the investment of cash by John,owner of a sole proprietorship?

A) Debit John,Capital; credit Cash
B) Debit Cash; credit John,Withdrawals
C) Debit John,Withdrawals; credit Cash
D) Debit Cash; credit John,Capital

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Question 52

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Which of the following is prepared last?

A) Balance Sheet
B) Income Statement
C) Statement of Owner's Equity
D) Trial Balance

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Question 53

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For each of the following, identify in Column 1 the category to which the account belongs, in Column 2 the normal balance for the account, and in Column 3 the financial statement that the account appears upon. - $\begin{array} { | l | l | l | l | } \hline & \text { Column } 1 & \text { Column } 2 & \text { Column } 3 \\\hline \text { Equipment } & & & \\\hline\end{array}$

The income statement contains:

A compound entry is:

Explain the difference between expenses and withdrawals.

Selected accounts from the ledger of Thomas Company appear below.For each account,indicate the following: a. In the first column at right, indicate the type of each account using the following abbreviations: Asset - A $\quad$ Revenue - R $\quad$ None of the above - N $\quad$ Liability - L $\quad$ Expense - E b. In the second column, indicate the normal balance of the account by inserting a Dr. or Cr. $\begin{array} { | l | c | c | } \hline \text { Account } & \begin{array} { c } \text { Type of } \\\text { Account }\end{array} & \text { Normal Balance } \\\hline \text { 1. Office Supplies } & \underline{\quad\quad} &\underline{\quad\quad} \\\hline \text { 2. Accounts Receivable } & \underline{\quad\quad} &\underline{\quad\quad} \\\hline \text { 3. Fees Earned } & \underline{\quad\quad}&\underline{\quad\quad} \\\hline \text { 4. Thomas, Withdrawals } &\underline{\quad\quad}& \underline{\quad\quad}\\\hline \text { 5. Accounts Payable } & \underline{\quad\quad}&\underline{\quad\quad} \\\hline \text { 6. Salaries Expense } & \underline{\quad\quad}&\underline{\quad\quad} \\\hline \text { 7. Thomas, Capital } & \underline{\quad\quad}&\underline{\quad\quad} \\\hline \text { 8. Accounts Receivable } & \underline{\quad\quad}&\underline{\quad\quad} \\\hline \text { 9. Equipment } &\underline{\quad\quad}&\underline{\quad\quad} \\\hline \text { 10. Telephone Expense } & \underline{\quad\quad} &\underline{\quad\quad} \\\hline\end{array}$

Identify whether a debit or credit would be correct for each of the following account changes

The owner invested personal equipment in the business.To record this transaction:

___ 5.Cash

A credit to an asset account was posted to a revenue account.This error would cause:

A list of all the accounts from the ledger with their ending balances is called a:

The business provided services to a cash customer.To record this:

A debit to an asset account was posted to an expense account.This error would cause:

Which of the following types of accounts has a normal debit balance?

Accounts receivable increases on the debit side of the account.

Which of the following types of accounts has a normal credit balance?

Only one account is affected in every transaction.

___ 6.Accounts Receivable

The left side of any account is the: