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Exam 2: Accounting for Business Transactions

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Question 131

Multiple Choice

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A debit is used to record an increase in all of the following accounts except:

A) Supplies
B) Cash
C) Accounts Payable
D) Dividends
E) Prepaid Insurance

F) C) and E)
G) A) and D)

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Question 132

Multiple Choice

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Identify the item below that would cause the trial balance to not balance?

A) A $1,000 collection of an account receivable was erroneously posted as a debit to Accounts Receivable and a credit to Cash.
B) The purchase of office supplies on account for $3,250 was erroneously recorded in the journal as $2,350 debit to Office Supplies and $2,350 credit to Accounts Payable.
C) A $50 cash receipt for the performance of a service was not recorded at all.
D) The purchase of office equipment for $1,200 was posted as a debit to Office Supplies and a credit to Cash for $1,200.
E) The cash payment of a $750 account payable was posted as a debit to Accounts Payable and a debit to Cash for $750.

F) A) and B)
G) C) and D)

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Question 133

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When a company bills a customer for $700 for services performed,the journal entry to record this transaction will include a $700 debit to Services Revenue.

The following trial balance is prepared from the general ledger of HG's Auto Maintenance. Because 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 a stockholder 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 Shop Equipment account. 6.One entire entry was not posted to the general ledger.The transaction involved the receipt of $125 cash for repair services performed for cash. Prepare a corrected trial balance for the HG's Auto Maintenance as of October 31.

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

Green Cleaning purchased $500 of office supplies on credit.The company's policy is to initially record prepaid and unearned items in balance sheet accounts.Which of the following general journal entries will Green Cleaning make to record this transaction?

Assets would be increased with a ________ entry and liabilities would be increased with a________ entry.

Errors made in journalizing transactions,posting to the ledger,and preparing the trial balance can still exist in a balanced trial balance.

A company's ledger is:

A law firm billed a client $1,800 for work performed in the current month.Which of the following general journal entries will the firm make to record this transaction?

Identify the accounts that would normally have balances in the credit column of a business's trial balance