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Exam 3: Processing Accounting Information

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Question 1

Multiple Choice

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Double-entry accounting is best characterized as:

A) The number of debit entries posted to the ledger equals the number of credit entries.
B) The number of ledger accounts with debit balances is equal to the number with credit balances.
C) Every transaction affects both an asset account and either a liability account or a stockholders' equity account.
D) The total dollar amount of debit entries posted to the ledger is equal to the dollar amount of the credit entries.

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D

Question 2

Multiple Choice

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The record in which transactions are initially recorded in chronological order as they occur is a(an)

A) Account
B) General Journal
C) General Ledger
D) Chart of Accounts

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Question 3

Short Answer

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A(n)________________________ is a list of each account and its balance at a specific point in time.

Assets and expenses are ____________________ by credits.

Prepare the journal entry to record each of the following independent transactions.(Use the number of the transaction in place of a date for identification purposes. ) 1.Sale of capital stock in exchange for a parcel of land;the land is appraised at $75,000 2.Payment of $3,400 in salaries and wages 3.Payment of open account in the amount of $850 4.Issuance of a promissory note for $2,750 5.Collections on account for $689

The equality of debits and credits in a trial balance means that all entries were correctly posted to the accounts.

During May,Aniston,Inc.purchased office supplies for cash.The supplies will be used in June.What effect does this purchase transaction have on the accounting equation?

The origins of single-entry accounting were documented in a book written by Pacioli over 500 years ago.It includes the concepts of bookkeeping that are still applied today.

The purchase of office equipment on credit has what effect on the accounting equation?

If an accounting firm provides services on account,both ____________________ and stockholders' equity increase.

Which of the following statements best describes the effects of recognizing revenue earned by a business entity?

Unfortunately,the bookkeeper notices that two transactions for Patio Publications were not reflected in the balances of the trial balance: one to record $800 of accrued wages and salaries to be paid in the next period,and the other was the use of $560 of office supplies from the supplies on hand.If the Trial Balance column totals are $15,380 prior to discovering these mistakes,what are the totals of the Trial Balance columns after the corrections are made?

A file or book which contains a record for all accounts used by a company,including the account balance,is called a

Wolfe Inc. Wolfe Inc.reports these account balances at January 1,2014: See the account balances for Wolfe Inc. On January 31,Wolfe collected $12,000 of its accounts receivable and paid $11,000 on its note payable.In Wolfe's trial balance prepared on January 31,2014,the total of the credit column is:

Terry Company Transactions Refer to the transactions for Terry Company. Use the transactions incurred by the Terry Corporation to set up T accounts and post each transaction to the T accounts.

From an accounting perspective,what are source documents? Give examples of at least three source documents.

With few exceptions,the balance of all accounts should be on the side of the T account that causes the increase.

Morton & Associates Use the following five transactions for Morton & Associates,Inc.to answer the question(s) . See the transactions to Morton & Associates. The journal entry to record the May 23 transaction will include a credit of $430 to

Every business transaction is recorded by a debit to a balance sheet account and a credit to an income statement account.

Which of the following statements is true?