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Exam 2: Accounting for Transactions

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Question 51

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David Roberts is a real estate appraiser. Shown below are (a) several accounts in his ledger with each account preceded by an identification number and (b) several transactions completed by Roberts. Indicate the accounts debited and credited when recording each transaction by placing the proper account identification numbers to the right of each transaction. $\begin{array}{|l|l|l|l|}\hline 1 . & \text { Accounts Payable } & 8 . & \text { Office Supplies Expense } \\\hline 2 . & \text { Accounts Receivable } & 9 . & \text { Prepaid Insurance } \\\hline \text { 3. } & \text { Appraisal Fees Earned } & 10 . & \text { Salaries Expense } \\\hline 4 . & \text { Cash } & 11 . & \text { Telephone Expense } \\\hline 5 . & \text { Insurance Expense } & 12 . & \text { Unearned Appraisal Fees } \\\hline 6 . & \text { Office Equipment } & 13 . & \text { Common Stock } \\\hline 7 . & \text { Office Supplies } & 14 . & \text { Dividends } \\\hline\end{array}$

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Question 52

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The four categories of equity accounts are _____________________, __________________, ______________________ and ______________________.

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Question 53

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Compute net income for May based on the following transactions: May 1 paid $2,200 for May's rent. May 14 paid $1,200 for two weeks wages. May 15 performed $5,200 in consulting services on account. May 17 billed a customer $1,500 for services performed May 16. May 20 received $5,200 in payment for May 15 transaction. May 22 performed services and immediately collected $2,000. May 31 paid $500 for advertising in the local paper to take place in June.

The record in which business transactions are first recorded is the:

A debit is used to record:

___________________ is a promise of payment from customers to sellers.

Which of the following statements is incorrect?

Match the following terms and definitions

Source documents include all of the following except:

A collection of all accounts (with account balances) used by a business is called a:

Debit means the right-hand side of any account.

A column in journal and ledger accounts used to cross reference journal and ledger entries is the:

An account format that is similar to a T-account in that it has columns for debits and credits but that is different in that it has columns for transaction date, explanation, and the account balance is the ___________________________________.

A ___________________________ gives a complete record of each transaction in one place and shows debits and credits for each transaction.

Dolly Barton began Barton Office Services in October and during the month completed the following transactions: a. Invested $10,000 cash and $15,000 of computer equipment in exchange for common stock. b. Paid $500 cash for an insurance premium covering the next 12 months. c. Completed a word processing assignment for a customer and collected $1,000 cash. d. Paid $200 cash for office supplies. e. Paid $2,000 for October's rent. Prepare journal entries to record the above transactions. Explanations are unnecessary.

The general ledger of a business

The balances for the accounts of Lance's Consulting Firm, Inc. for the year ended December 31 are shown below. Each account shown had a normal balance. $\begin{array} { l r l r } \text { Accounts payable } & \$ 6,400 & \text { Wages expense } & \$ 35,000 \\\text { Accounts receivable } & 7,000 & \text { Rent expense } & 5,000 \\\text { Cash } & 10,000 & \text { Retained earnings } & 68,700 \\\text { Office supplies } & 1,000 & \text { Land } & 53,000 \\\text { Building } & 99,000 & \text { Unearned revenue } & 7,000 \\\text { Supplies expense } & 15,000 & \text { Dividends } & 20,000 \\\text { Consulting revenue } & 150,000 & \text { Common stock } & 12,900\end{array}$ Calculate the debt ratio.

The balances for the accounts of Lance's Consulting Firm, Inc. for the year ended December 31 are shown below. Each account shown had a normal balance. $\begin{array} { l r l r } \text { Accounts payable } & \$ 6,400 & \text { Wages expense } & \$ 35,000 \\\text { Accounts receivable } & 7,000 & \text { Rent expense } & 5,000 \\\text { Cash } & 10,000 & \text { Retained earnings } & 68,700 \\\text { Office supplies } & 1,000 & \text { Land } & 53,000 \\\text { Building } & 99,000 & \text { Unearned revenue } & 7,000 \\\text { Supplies expense } & 15,000 & \text { Dividends } & 20,000 \\\text { Consulting revenue } & 150,000 & \text { Common stock } & 12,900\end{array}$ Calculate total assets.

The first step in the analyzing and recording process is to analyze each transaction and event from source documents.

The balances for the accounts of Lance's Consulting Firm, Inc. for the year ended December 31 are shown below. Each account shown had a normal balance. $\begin{array} { l r l r } \text { Accounts payable } & \$ 6,400 & \text { Wages expense } & \$ 35,000 \\\text { Accounts receivable } & 7,000 & \text { Rent expense } & 5,000 \\\text { Cash } & 10,000 & \text { Retained earnings } & 68,700 \\\text { Office supplies } & 1,000 & \text { Land } & 53,000 \\\text { Building } & 99,000 & \text { Unearned revenue } & 7,000 \\\text { Supplies expense } & 15,000 & \text { Dividends } & 20,000 \\\text { Consulting revenue } & 150,000 & \text { Common stock } & 12,900\end{array}$ Calculate net income.