College Accounting John Price 15th Edition- Test Bank
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Sample Test
Chapter 03 Analyzing Business Transactions Using T Accounts
MULTIPLE CHOICE QUESTIONS
1)
When preparing the trial balance, the total debits MUST equal the total
credits.
1. True
2. False
Answer: A Explanation:
Diff: 1
Topic: Transactions That Affect Revenue, Expenses, and
Withdrawals Learning Objective: 03-05 Prepare a trial balance from T accounts.
Bloom’s: Remember AACSB: Analytical Thinking
AICPA: BB Industry; FN Reporting
2)
Credits increase Liabilities, Owner’s Equity, and Revenue.
1. True
2. False
Answer: A Explanation:
Diff: 1
Topic: Transactions That Affect Assets, Liabilities, and Owner’s
Equity; Transactions That Affect Revenue, Expenses, and Withdrawals
Learning Objective: 03-01 Set up T accounts for assets,
liabilities, and owner’s equity.; 03-04 Set up T accounts for revenue and
expenses.
Bloom’s: Understand AACSB: Analytical Thinking
AICPA: BB Industry; FN Measurement
3)
Increases in assets and expenses are both recorded with debits.
1. True
2. False
Answer: A Explanation:
Diff: 1
Topic: Transactions That Affect Assets, Liabilities, and Owner’s
Equity; Transactions That Affect Revenue, Expenses, and Withdrawals
Learning Objective: 03-01 Set up T accounts for assets,
liabilities, and owner’s equity.; 03-04 Set up T accounts for revenue and
expenses.
Bloom’s: Remember AACSB: Analytical Thinking
AICPA: BB Industry; FN Measurement
4)
Increases in assets and revenue are both recorded with debits.
1. True
2. False
Answer: B Explanation:
Diff: 1
Topic: Transactions That Affect Assets, Liabilities, and Owner’s
Equity; Transactions That Affect Revenue, Expenses, and Withdrawals
Learning Objective: 03-01 Set up T accounts for assets,
liabilities, and owner’s equity.; 03-04 Set up T accounts for revenue and
expenses.
Bloom’s: Remember AACSB: Analytical Thinking
AICPA: BB Industry; FN Measurement
5)
When an owner invests assets in a business, the capital account is debited.
1. True
2. False
Answer: B Explanation:
Diff: 1
Topic: Transactions That Affect Revenue, Expenses, and
Withdrawals Learning Objective: 03-04 Set up T accounts for revenue and
expenses. Bloom’s: Remember
AACSB: Analytical Thinking
AICPA: BB Industry; FN Measurement
- If
the total on the debit side of a T account is greater than the total on
the credit side, the balance is recorded on the debit
1. True
2. False
Answer: A Explanation:
Diff: 1
Topic: Transactions That Affect Assets, Liabilities, and Owner’s
Equity Learning Objective: 03-03 Determine the balance of an account.
Bloom’s: Analyze
AACSB: Analytical Thinking AICPA: BB Industry; FN Reporting
7)
Utilities Expense would be debited when a company receives a bill for utilities
that it will pay later.
1. True
2. False
Answer: A Explanation:
Diff: 1
Topic: Transactions That Affect Revenue, Expenses, and
Withdrawals Learning Objective: 03-04 Set up T accounts for revenue and
expenses. Bloom’s: Understand
AACSB: Analytical Thinking
AICPA: BB Industry; FN Measurement
8)
Debit entries increase asset, drawing, expense and liability accounts.
1. True
2. False
Answer: B Explanation:
Diff: 1
Topic: Transactions That Affect Assets, Liabilities, and Owner’s
Equity; Transactions That Affect Revenue, Expenses, and Withdrawals
Learning Objective: 03-01 Set up T accounts for assets,
liabilities, and owner’s equity.; 03-04 Set up T accounts for revenue and
expenses.
Bloom’s: Understand AACSB: Analytical Thinking
AICPA: BB Industry; FN Measurement
9)
The normal balance of a liability account is on the debit side.
1. True
2. False
Answer: B Explanation:
Diff: 1
Topic: Transactions That Affect Assets, Liabilities, and Owner’s
Equity Learning Objective: 03-03 Determine the balance of an account.
Bloom’s: Remember AACSB: Analytical Thinking
AICPA: BB Industry; FN Reporting
10)
Increases in owner’s equity are recorded with credits.
1. True
2. False
Answer: A Explanation:
Diff: 1
Topic: Transactions That Affect Assets, Liabilities, and Owner’s
Equity
Learning Objective: 03-01 Set up T accounts for assets,
liabilities, and owner’s equity. Bloom’s: Remember
AACSB: Analytical Thinking
AICPA: BB Industry; FN Measurement
11)
Revenue is a component of owner’s equity.
1. True
2. False
Answer: A Explanation:
Diff: 1
Topic: Transactions That Affect Revenue, Expenses, and
Withdrawals Learning Objective: 03-04 Set up T accounts for revenue and
expenses. Bloom’s: Remember
AACSB: Analytical Thinking AICPA: BB Industry; FN Reporting
12)
An increase in an expense results in an increase in owner’s equity.
1. True
2. False
Answer: B Explanation:
Diff: 1
Topic: Transactions That Affect Revenue, Expenses, and
Withdrawals Learning Objective: 03-04 Set up T accounts for revenue and
expenses. Bloom’s: Analyze
AACSB: Analytical Thinking AICPA: BB Industry; FN Reporting
13)
Increases in the owner’s drawing account are recorded with debits.
1. True
2. False
Answer: A Explanation:
Diff: 1
Topic: Transactions That Affect Revenue, Expenses, and
Withdrawals Learning Objective: 03-04 Set up T accounts for revenue and
expenses. Bloom’s: Remember
AACSB: Analytical Thinking
AICPA: BB Industry; FN Measurement
- After
transactions for the period have been recorded, a trial balance is
prepared to verify the equality of total debits and total
1. True
2. False
Answer: A Explanation:
Diff: 1
Topic: Transactions That Affect Revenue, Expenses, and
Withdrawals Learning Objective: 03-05 Prepare a trial balance from T accounts.
Bloom’s: Remember AACSB: Analytical Thinking
AICPA: BB Industry; FN Reporting
15)
A business transaction must affect at least two accounts.
1. True
2. False
Answer: A Explanation:
Diff: 1
Topic: Transactions That Affect Assets, Liabilities, and Owner’s
Equity
Learning Objective: 03-02 Analyze business transactions and
enter them in the accounts. Bloom’s: Remember
AACSB: Analytical Thinking
AICPA: BB Industry; FN Reporting; FN Measurement
- The
current system of accounting is called the double-entry system because a
debit to one account is balanced by a credit to another
1. True
2. False
Answer: A Explanation:
Diff: 1
Topic: Transactions That Affect Revenue, Expenses, and
Withdrawals Learning Objective: 03-05 Prepare a trial balance from T accounts.
Bloom’s: Remember AACSB: Analytical Thinking
AICPA: BB Industry; FN Reporting; FN Measurement
17)
Financial statements are prepared after the trial balance is prepared.
1. True
2. False
Answer: A Explanation:
Diff: 1
Topic: Transactions That Affect Revenue, Expenses, and
Withdrawals
Learning Objective: 03-06 Prepare an income statement, a
statement of owner’s equity, and a balance sheet. Bloom’s: Remember
AACSB: Analytical Thinking AICPA: BB Industry; FN Reporting
- Another
name for permanent accounts
is real
A)
True
1. False
Answer: A Explanation:
Diff: 1
Topic: Transactions That Affect Revenue, Expenses, and Withdrawals
Learning Objective: 03-07 Develop a chart of accounts.
Bloom’s: Remember AACSB: Analytical Thinking
AICPA: BB Industry; FN Reporting
- Another
name for temporary accounts
is real
A)
True
1. False
Answer: B Explanation:
Diff: 1
Topic: Transactions That Affect Revenue, Expenses, and
Withdrawals Learning Objective: 03-07 Develop a chart of accounts.
Bloom’s: Remember AACSB: Analytical Thinking
AICPA: BB Industry; FN Reporting
20)
When developing a chart of accounts, the highest block of numbers is assigned
to asset accounts.
1. True
2. False
Answer: B Explanation:
Diff: 1
Topic: Transactions That Affect Revenue, Expenses, and
Withdrawals Learning Objective: 03-07 Develop a chart of accounts.
Bloom’s: Understand AACSB: Analytical Thinking
AICPA: BB Industry; FN Reporting
- An
account whose balance is transferred to the capital account at the end of
an accounting period is a temporary
1. True
2. False
Answer: A Explanation:
Diff: 1
Topic: Transactions That Affect Revenue, Expenses, and
Withdrawals; Defining Accounting Terms
Learning Objective: 03-07 Develop a chart of accounts.; 03-08
Define the accounting terms new to this chapter. Bloom’s: Remember
AACSB: Analytical Thinking AICPA: BB Industry; FN Reporting
- An
account with a balance that carries over from one accounting period to
another is a nominal
1. True
2. False
Answer: B Explanation:
Diff: 1
Topic: Transactions That Affect Revenue, Expenses, and
Withdrawals; Defining Accounting Terms
Learning Objective: 03-07 Develop a chart of accounts.; 03-08
Define the accounting terms new to this chapter. Bloom’s: Remember
AACSB: Analytical Thinking AICPA: BB Industry; FN Reporting
23)
The classification and normal balance of the accounts receivable account is:
1. an
asset with a debit balance. B) a revenue with a debit
2. C) a
liability with a debit D) an asset with a credit balance. Answer: A
Explanation: A)
B)
C)
D)
Diff: 1
Topic: Transactions That Affect Assets, Liabilities, and Owner’s
Equity
Learning Objective: 03-01 Set up T accounts for assets,
liabilities, and owner’s equity. Bloom’s: Remember
AACSB: Analytical Thinking
AICPA: BB Industry; FN Reporting; FN Measurement
24)
The classification and normal balance of the salaries expense account is:
1. a
liability with a debit B) an expense with a credit balance.
2. C) an
asset with a debit balance. D) an expense with a debit Answer: D
Explanation: A)
B)
C)
D)
Diff: 1
Topic: Transactions That Affect Revenue, Expenses, and
Withdrawals Learning Objective: 03-04 Set up T accounts for revenue and
expenses. Bloom’s: Remember
AACSB: Analytical Thinking
AICPA: BB Industry; FN Reporting; FN Measurement
- A
business earns $4,000 from various charge account To record this
transaction, the business would:
1. Debit
Accounts Receivable; Credit Fees Income
2. Debit
Cash; Credit Accounts Receivable
3. Debit
Accounts Payable; Credit Fees Income
4. Debit
Accounts Receivable; Credit Cash Answer: A
Explanation: A)
B)
C)
D)
Diff: 1
Topic: Transactions That Affect Assets, Liabilities, and Owner’s
Equity
Learning Objective: 03-02 Analyze business transactions and
enter them in the accounts. Bloom’s: Apply
AACSB: Analytical Thinking
AICPA: BB Industry; FN Measurement
- Select
the entry below to record the payment to employees for work performed
during the pay period?
1. debit
Cash, and credit Accounts Receivable
2. debit
Salary Expense and credit Cash
3. debit
Salary Expense and credit Accounts Receivable
4. debit
Cash and credit Salary Expense Answer: B
Explanation: A)
B)
C)
D)
Diff: 1
Topic: Transactions That Affect Assets, Liabilities, and Owner’s
Equity
Learning Objective: 03-02 Analyze business transactions and
enter them in the accounts. Bloom’s: Apply
AACSB: Analytical Thinking
AICPA: BB Industry; FN Measurement
- A
business receives a bill for utilities but decides to pay it next The
business would record the receipt of the bill by:
1. Debiting
Utilities Expense; Crediting Cash
2. Debiting
Utilities Expense; Crediting Accounts Receivable
3. Debiting
Utilities Expense; Crediting Accounts Payable
4. Debiting
Accounts Payable; Crediting Utilities Expense Answer: C
Explanation: A)
B)
C)
D)
Diff: 1
Topic: Transactions That Affect Assets, Liabilities, and Owner’s
Equity
Learning Objective: 03-02 Analyze business transactions and
enter them in the accounts. Bloom’s: Apply
AACSB: Analytical Thinking
AICPA: BB Industry; FN Measurement
- A
business purchases equipment costing $5,500. They pay $1,500 right away
and charge
the remaining amount. To record this transaction, the
business would:
1. Debit
Equipment $5,500; Credit Cash $1,500 and Credit Accounts Payable $4,000
2. Debit
Equipment $5,500; Credit Accounts Payable $5,500
3. Debit
Equipment $4,000; Credit Accounts Payable $4,000
4. Debit
Equipment $1,500; Credit Cash $1,500 Answer: A
Explanation: A)
B)
C)
D)
Diff: 2
Topic: Transactions That Affect Assets, Liabilities, and Owner’s
Equity
Learning Objective: 03-02 Analyze business transactions and
enter them in the accounts. Bloom’s: Apply
AACSB: Analytical Thinking
AICPA: BB Industry; FN Measurement
- A
business performed $8,000 of Their customer paid $3,000 of the amount
right away but
charged the remaining amount. To
record this transaction, the business would:
A)
Debit Cash $3,000 and Debit Accounts Receivable $5,000 and Credit Fees Income
$8,000
1. Debit
Accounts Receivable $8,000 and; Credit Fees Income $8,000
2. Debit
Cash $3,000; Credit Fees Income $3,000
3. Debit
Cash $3,000 and Debit Accounts Payable $5,000; Credit Fees Income $8,000
Answer: A
Explanation: A)
B)
C)
D)
Diff: 2
Topic: Transactions That Affect Assets, Liabilities, and Owner’s
Equity
Learning Objective: 03-02 Analyze business transactions and
enter them in the accounts. Bloom’s: Apply
AACSB: Analytical Thinking
AICPA: BB Industry; FN Measurement
- Which
of the following entries records the withdrawal of cash for personal use
by Ty Knott, the owner of a business?
1. debit
Ty Knott, Drawing, and credit Cash B) debit Salary Expense and credit Cash
1. debit
Cash and credit Salary Expense D) debit Cash and credit Ty Knott, Capital
Answer: A
Explanation: A)
B)
C)
D)
Diff: 1
Topic: Transactions That Affect Assets, Liabilities, and Owner’s
Equity
Learning Objective: 03-02 Analyze business transactions and
enter them in the accounts. Bloom’s: Apply
AACSB: Analytical Thinking AICPA: BB Industry
31)
The ending capital balance appears on which of the following
statement(s)?
1. Income
Statement
2. Statement
of owner’s equity and balance sheet
3. Only
on the Statement of owner’s equity
4. Statement
of owner’s equity and income statement Answer: B
Explanation: A)
B)
C)
D)
Diff: 1
Topic: Transactions That Affect Revenue, Expenses, and
Withdrawals
Learning Objective: 03-06 Prepare an income statement, a
statement of owner’s equity, and a balance sheet. Bloom’s: Understand
AACSB: Analytical Thinking
AICPA: BB Industry; FN Reporting; FN Measurement
- On
a statement of owner’s equity, beginning capital is $30,000, Net Income
for the year is $11,000 and Drawing for the year is $6,000, the ending
capital amount would be:
1. A)
$25,000. B) $47,000. C)
$35,000.
D) $30,000.
Answer: C
Explanation: A) Beginning Capital,
$30,000 + Net Income, $11,000 – Drawing, $6,000 = Ending Capital, $35,000.
1. Beginning
Capital, $30,000 + Net Income, $11,000 – Drawing, $6,000 = Ending Capital,
$35,000.
2. Beginning
Capital, $30,000 + Net Income, $11,000 – Drawing, $6,000 = Ending Capital,
$35,000.
3. Beginning
Capital, $30,000 + Net Income, $11,000 – Drawing, $6,000 = Ending Capital,
$35,000.
Diff: 2
Topic: Transactions That Affect Revenue, Expenses, and
Withdrawals
Learning Objective: 03-06 Prepare an income statement, a
statement of owner’s equity, and a balance sheet. Bloom’s: Apply
AACSB: Analytical Thinking
AICPA: BB Industry; FN Reporting; FN Measurement
33)
A business purchases supplies on account. The entry to record this transaction
is:
1. Debit
to Supplies; Credit Accounts Receivable
2. Debit
Supplies; Credit Accounts Payable
3. Debit
Supplies; Credit to Cash
4. Debit
to Cash; Credit Supplies Answer: B
Explanation: A)
B)
C)
D)
Diff: 1
Topic: Transactions That Affect Assets, Liabilities, and Owner’s
Equity
Learning Objective: 03-02 Analyze business transactions and
enter them in the accounts. Bloom’s: Apply
AACSB: Analytical Thinking
AICPA: BB Industry; FN Reporting; FN Measurement
- On
a statement of owner’s equity, beginning capital is $152,000, Drawing for
the year is $65,000, and the ending capital is $191,000. What is the
amount of Net Income for the year?
1. A)
$126,000 B) $ 87,000 C) $104,000
D) $ 26,000
Answer: C
Explanation: A) Beginning Capital,
$152,000 + Net Income, $104,000 – Drawing, $65,000 = Ending Capital, $191,000.
1. Beginning
Capital, $152,000 + Net Income, $104,000 – Drawing, $65,000 = Ending Capital, $191,000.
2. Beginning
Capital, $152,000 + Net Income, $104,000 – Drawing, $65,000 = Ending Capital,
$191,000.
3. Beginning
Capital, $152,000 + Net Income, $104,000 – Drawing, $65,000 = Ending Capital,
$191,000.
Diff: 3
Topic: Transactions That Affect Revenue, Expenses, and
Withdrawals
Learning Objective: 03-06 Prepare an income statement, a
statement of owner’s equity, and a balance sheet. Bloom’s: Apply
AACSB: Analytical Thinking
AICPA: BB Industry; FN Reporting; FN Measurement
35)
Debits are used to record:
1. increases
in B) increases in liabilities.
2. C)
increases in revenue. D) decreases in Answer: A
Explanation: A)
B)
C)
D)
Diff: 1
Topic: Transactions That Affect Assets, Liabilities, and Owner’s
Equity; Transactions That Affect Revenue, Expenses, and Withdrawals
Learning Objective: 03-01 Set up T accounts for assets,
liabilities, and owner’s equity.; 03-04 Set up T accounts for revenue and
expenses.
Bloom’s: Remember AACSB: Analytical Thinking
AICPA: BB Industry; FN Reporting
36)
Which of the following represents the proper sequence for preparing the
financial statements?
1. balance
sheet, statement of owner’s equity, income statement
2. income
statement, balance sheet, statement of owner’s equity
3. statement
of owner’s equity, income statement, balance sheet
4. income
statement, statement of owner’s equity, balance sheet Answer: D
Explanation: A)
B)
C)
D)
Diff: 1
Topic: Transactions That Affect Revenue, Expenses, and
Withdrawals
Learning Objective: 03-06 Prepare an income statement, a statement
of owner’s equity, and a balance sheet. Bloom’s: Understand
AACSB: Analytical Thinking AICPA: BB Industry; FN Reporting
- Which
of the following is not one of the formal financial
statements that is made available to all users of the financial
1. Income
Statement B) Trial Balance
2. C)
Statement of Owner’s Equity D) Balance Sheet Answer: B
Explanation: A)
B)
C)
D)
Diff: 1
Topic: Transactions That Affect Revenue, Expenses, and
Withdrawals
Learning Objective: 03-05 Prepare a trial balance from T
accounts.; 03-06 Prepare an income statement, a statement of owner’s equity,
and a balance sheet.
Bloom’s: Remember AACSB: Analytical Thinking
AICPA: BB Industry; FN Reporting
38)
A business pays a creditor on account. The entry to record this transaction is:
1. Debit
Cash; Credit Accounts Payable
2. Debit
Accounts Receivable; Credit to Cash
3. Debit
Accounts Receivable; Credit Accounts Payable
4. Debit
Accounts Payable; Credit Cash Answer: D
Explanation: A)
B)
C)
D)
Diff: 1
Topic: Transactions That Affect Assets, Liabilities, and Owner’s
Equity
Learning Objective: 03-02 Analyze business transactions and
enter them in the accounts. Bloom’s: Apply
AACSB: Analytical Thinking
AICPA: BB Industry; FN Reporting; FN Measurement
39)
When recording transactions in the T-accounts, the debits should equal the
credits:
1. B)
Sometimes.
2. C) D)
Only for asset accounts.
Answer: A Explanation: A)
B)
C)
D)
Diff: 1
Topic: Transactions That Affect Assets, Liabilities, and Owner’s
Equity
Learning Objective: 03-02 Analyze business transactions and
enter them in the accounts. Bloom’s: Apply
AACSB: Analytical Thinking
AICPA: BB Industry; FN Reporting; FN Measurement
40)
Credits are used to record:
1. decreases
in liabilities and increases in assets and owner’s
2. decreases
in assets and owner’s equity and increases in
3. increases
in liabilities and
4. increases
in assets, liabilities, and owner’s Answer: C
Explanation: A)
B)
C)
D)
Diff: 1
Topic: Transactions That Affect Assets, Liabilities, and Owner’s
Equity; Transactions That Affect Revenue, Expenses, and Withdrawals
Learning Objective: 03-01 Set up T accounts for assets,
liabilities, and owner’s equity.; 03-04 Set up T accounts for revenue and
expenses.
Bloom’s: Understand AACSB: Analytical Thinking
AICPA: BB Industry; FN Reporting; FN Measurement
41)
Debits are used to record increases in:
1. assets
and B) assets and expenses.
2. C)
revenue and owner’s D) assets and revenue. Answer: B
Explanation: A)
B)
C)
D)
Diff: 1
Topic: Transactions That Affect Assets, Liabilities, and Owner’s
Equity; Transactions That Affect Revenue, Expenses, and Withdrawals
Learning Objective: 03-01 Set up T accounts for assets,
liabilities, and owner’s equity.; 03-04 Set up T accounts for revenue and expenses.
Bloom’s: Understand AACSB: Analytical Thinking
AICPA: BB Industry; FN Reporting; FN Measurement
42)
A firm paid cash to apply against a debt. To record this transaction, the
accountant would:
1. credit
Cash and credit Accounts
2. debit
Accounts Payable and credit
3. debit
Accounts Receivable and credit
4. debit
Cash and credit Accounts Answer: B
Explanation: A)
B)
C)
D)
Diff: 1
Topic: Transactions That Affect Assets, Liabilities, and Owner’s
Equity
Learning Objective: 03-02 Analyze business transactions and
enter them in the accounts. Bloom’s: Understand
AACSB: Analytical Thinking
AICPA: BB Industry; FN Reporting; FN Measurement
- The
ABC Company paid cash on account for supplies purchased last This would be
recorded in the T-accounts as a:
1. debit
Supplies and credit Accounts
2. debit
to Accounts Payable and credit
3. debit
Accounts Receivable and credit
4. debit
Cash and credit Answer: B
Explanation: A)
B)
C)
D)
Diff: 1
Topic: Transactions That Affect Assets, Liabilities, and Owner’s
Equity
Learning Objective: 03-02 Analyze business transactions and
enter them in the accounts. Bloom’s: Understand
AACSB: Analytical Thinking
AICPA: BB Industry; FN Reporting; FN Measurement
44)
When revenue is earned from charge account sales, the accountant:
1. debits
Cash and credits a revenue
2. debits
Accounts Receivable and credits a revenue
3. debits
a revenue account and credits the capital
4. debits
a revenue account and credits Accounts Answer: B
Explanation: A)
B)
C)
D)
Diff: 1
Topic: Transactions That Affect Assets, Liabilities, and Owner’s
Equity
Learning Objective: 03-02 Analyze business transactions and
enter them in the accounts. Bloom’s: Understand
AACSB: Analytical Thinking
AICPA: BB Industry; FN Reporting; FN Measurement
45)
When charge customers pay cash to apply against their accounts, the amount is
recorded:
1. on
the left side of the Cash account and the right side of the Fees Income
2. on
the left side of the Cash account and the right side of the Accounts Receivable
3. on
the left side of the Accounts Payable account and the right side of the Cash
4. on
the left side of the Cash account and the left side of the Accounts Receivable
Answer: B
Explanation: A)
B)
C)
D)
Diff: 2
Topic: Transactions That Affect Assets, Liabilities, and Owner’s
Equity
Learning Objective: 03-02 Analyze business transactions and
enter them in the accounts. Bloom’s: Apply
AACSB: Analytical Thinking
AICPA: BB Industry; FN Reporting; FN Measurement
- The
total of the figures on the left side of a Cash account is $36,700. The
total of the figures on the right side is $16,250. The balance of this
account:
1. is
$52,950 and would be recorded on the right side of the
2. is
$20,450 and would be recorded on the left side of the
3. is
$52,950 and would be recorded on the left side of the
4. is
$20,450 and would be recorded on the right side of the Answer: B
Explanation: A) $36,700 debit (left) –
$16,250 credit (right) = $20,450 debit (left).
1. $36,700
debit (left) – $16,250 credit (right) = $20,450 debit (left).
2. $36,700
debit (left) – $16,250 credit (right) = $20,450 debit (left).
3. $36,700
debit (left) – $16,250 credit (right) = $20,450 debit (left).
Diff: 1
Topic: Transactions That Affect Assets, Liabilities, and Owner’s
Equity Learning Objective: 03-03 Determine the balance of an account.
Bloom’s: Understand AACSB: Analytical Thinking
AICPA: BB Industry; FN Reporting; FN Measurement
47)
The account used to record increases in owner’s equity from the sale of goods
or services is:
1. the
capital B) the cash account.
2. C)
the fees income D) the drawing account. Answer: C
Explanation: A)
B)
C)
D)
Diff: 1
Topic: Transactions That Affect Assets, Liabilities, and Owner’s
Equity; Transactions That Affect Revenue, Expenses, and Withdrawals
Learning Objective: 03-01 Set up T accounts for assets,
liabilities, and owner’s equity.; 03-04 Set up T accounts for revenue and
expenses.
Bloom’s: Understand AACSB: Analytical Thinking
AICPA: BB Industry; FN Reporting
48)
Which of the following types of accounts normally have debit balances?
1. liabilities
and owner’s equity B) assets and revenue
2. C)
assets, liabilities, and owner’s equity D) expenses and assets Answer: D
Explanation: A)
B)
C)
D)
Diff: 1
Topic: Transactions That Affect Assets, Liabilities, and Owner’s
Equity; Transactions That Affect Revenue, Expenses, and Withdrawals
Learning Objective: 03-01 Set up T accounts for assets,
liabilities, and owner’s equity.; 03-04 Set up T accounts for revenue and
expenses.
Bloom’s: Understand AACSB: Analytical Thinking
AICPA: BB Industry; FN Reporting
49)
Which of the following accounts have normal credit balances?
1. Accounts
Payable and Equipment B) Salaries Expense and Accounts Payable
2. C)
Fees Income and John Smith, Capital D) Accounts Receivable and Fees Income
Answer: C
Explanation: A)
B)
C)
D)
Diff: 1
Topic: Transactions That Affect Assets, Liabilities, and Owner’s
Equity; Transactions That Affect Revenue, Expenses, and Withdrawals
Learning Objective: 03-01 Set up T accounts for assets,
liabilities, and owner’s equity.; 03-04 Set up T accounts for revenue and
expenses.
Bloom’s: Understand AACSB: Analytical Thinking
AICPA: BB Industry; FN Reporting
- If
the trial balance totals are not equal, this may have been caused by a
transposition error if the difference is divisible by:
9. A) B)
7. C)
3.
D) 5.
Answer: A Explanation: A)
B)
C)
D)
Diff: 1
Topic: Transactions That Affect Revenue, Expenses, and
Withdrawals Learning Objective: 03-05 Prepare a trial balance from T accounts.
Bloom’s: Remember AACSB: Analytical Thinking
AICPA: BB Industry; FN Measurement
- When
the trial balance totals are not equal, the error may have been caused by
recording a debit as a credit if the difference is divisible by:
9. A) B)
5. C) 3.
D) 2.
Answer: D Explanation: A)
B)
C)
D)
Diff: 1
Topic: Transactions That Affect Revenue, Expenses, and
Withdrawals Learning Objective: 03-05 Prepare a trial balance from T accounts.
Bloom’s: Remember AACSB: Analytical Thinking
AICPA: BB Industry; FN Measurement
52)
Which of the following transactions increase owner’s equity?
1. owner
withdrawals for personal use B) receiving cash from customers on account
2. C)
earning revenue D) paying expenses Answer: C
Explanation: A)
B)
C)
D)
Diff: 1
Topic: Transactions That Affect Assets, Liabilities, and Owner’s
Equity; Transactions That Affect Revenue, Expenses, and Withdrawals
Learning Objective: 03-01 Set up T accounts for assets,
liabilities, and owner’s equity.; 03-04 Set up T accounts for revenue and
expenses.
Bloom’s: Understand AACSB: Analytical Thinking
AICPA: BB Industry; FN Reporting; FN Measurement
- If assets are
numbered from 100-199, which of the following accounts would not be
given a number in the 100 series?
1. Prepaid
Rent B) Supplies
2. C)
Accounts Receivable D) Accounts Payable Answer: D
Explanation: A)
B)
C)
D)
Diff: 1
Topic: Transactions That Affect Revenue, Expenses, and
Withdrawals Learning Objective: 03-07 Develop a chart of accounts.
Bloom’s: Understand AACSB: Analytical Thinking
AICPA: BB Industry; FN Reporting; FN Measurement
54)
Which of the following accounts is not a permanent account?
1. Cash
B) Thomas Bernard, Capital
2. C)
Salaries Expense D) Accounts Payable Answer: C
Explanation: A)
B)
C)
D)
Diff: 1
Topic: Transactions That Affect Revenue, Expenses, and
Withdrawals Learning Objective: 03-07 Develop a chart of accounts.
Bloom’s: Understand AACSB: Analytical Thinking
AICPA: BB Industry; FN Reporting
55)
The “Net Income” or “Net Loss” is transferred from the income statement to the
1. chart
of B) trial balance.
2. C)
balance D) statement of owner’s equity. Answer: D
Explanation: A)
B)
C)
D)
Diff: 1
Topic: Transactions That Affect Revenue, Expenses, and Withdrawals
Learning Objective: 03-06 Prepare an income statement, a
statement of owner’s equity, and a balance sheet. Bloom’s: Remember
AACSB: Analytical Thinking AICPA: BB Industry; FN Reporting
56)
The ending capital balance appears on what financial statement(s)
1. income
statement and the statement of owner’s
2. statement
of owner’s equity and the balance
3. income
statement and balance
4. only
on the balance Answer: B
Explanation: A)
B)
C)
D)
Diff: 1
Topic: Transactions That Affect Revenue, Expenses, and
Withdrawals
Learning Objective: 03-06 Prepare an income statement, a
statement of owner’s equity, and a balance sheet. Bloom’s: Remember
AACSB: Analytical Thinking AICPA: BB Industry; FN Reporting
57)
The normal balance of an account is the:
1. the right
side of the B) decrease side of the account.
2. C)
increase side of the account. D) the left side of the Answer: C
Explanation: A)
B)
C)
D)
Diff: 1
Topic: Transactions That Affect Assets, Liabilities, and Owner’s
Equity Learning Objective: 03-03 Determine the balance of an account.
Bloom’s: Remember AACSB: Analytical Thinking
AICPA: BB Industry; FN Reporting; FN Measurement
58)
Which of the accounts below would ALL appear on the balance
sheet.
1. Utility
Expense, Salary Expense, Cash
2. Owner’s
Capital (beginning), Owner’s Drawing, Supplies Expense
3. Accounts
Receivable, Accounts Payable, Fee Income
4. Cash,
Accounts Payable, Owner’s Capital (ending balance) Answer: D
Explanation: A)
B)
C)
D)
Diff: 1
Topic: Transactions That Affect Revenue, Expenses, and
Withdrawals
Learning Objective: 03-06 Prepare an income statement, a
statement of owner’s equity, and a balance sheet. Bloom’s: Understand
AACSB: Analytical Thinking AICPA: BB Industry; FN Reporting
- If
a trial balance is not in balance (the Debit and Credit columns are not
equal), a logical first step
is to
1. check
each account balance in the general ledger to the trial balance
2. divide
the difference by either 9 or
3. check
the addition of each
4. check
each account balance Answer: C
Explanation: A)
B)
C)
D)
Diff: 1
Topic: Transactions That Affect Revenue, Expenses, and
Withdrawals Learning Objective: 03-05 Prepare a trial balance from T accounts.
Bloom’s: Understand AACSB: Analytical Thinking
AICPA: BB Industry; FN Reporting
- The
Net Income amount from the Income Statement is transferred to which of the
following statements?
1. the
profit and loss statement B) the statement of owner’s equity
2. C)
the trial balance D) the balance sheet Answer: B
Explanation: A)
B)
C)
D)
Diff: 1
Topic: Transactions That Affect Revenue, Expenses, and
Withdrawals
Learning Objective: 03-06 Prepare an income statement, a
statement of owner’s equity, and a balance sheet. Bloom’s: Understand
AACSB: Analytical Thinking AICPA: BB Industry; FN Reporting
61)
The Net Income appears as a separate line item on what two statements?
1. the
statement of owner’s equity and the income statement
2. the
trial balance and the income statement
3. the
income statement and the balance sheet
4. the
statement of owner’s equity and the balance sheet Answer: A
Explanation: A)
B)
C)
D)
Diff: 1
Topic: Transactions That Affect Revenue, Expenses, and
Withdrawals
Learning Objective: 03-06 Prepare an income statement, a
statement of owner’s equity, and a balance sheet. Bloom’s: Remember
AACSB: Analytical Thinking AICPA: BB Industry; FN Reporting
62)
Which of the following accounts is NOT a nominal account?
1. Salaries
Expense B) Office Supplies
2. C)
Moriah Paige, Drawing D) Rent Revenue Answer: B
Explanation: A)
B)
C)
D)
Diff: 1
Topic: Transactions That Affect Revenue, Expenses, and
Withdrawals Learning Objective: 03-07 Develop a chart of accounts.
Bloom’s: Understand AACSB: Analytical Thinking
AICPA: BB Industry; FN Reporting
- An
accounting system that involves recording the effects of each transaction
as debits and credits is:
1. preparing
financial B) the double-entry system.
2. C)
completing one T D) analyzing a business transaction. Answer: B
Explanation: A)
B)
C)
D)
Diff: 1
Topic: Transactions That Affect Assets, Liabilities, and Owner’s
Equity
Learning Objective: 03-02 Analyze business transactions and
enter them in the accounts. Bloom’s: Remember
AACSB: Analytical Thinking AICPA: BB Industry; FN Reporting
64)
Which of the following does NOT describe a transposition?
1. It is
an
2. It
causes the difference between the debit total and the credit total to be
divisible by
3. It
involves misplaced digits in a
4. It
causes the trial balance to be out of Answer: B
Explanation: A)
B)
C)
D)
Diff: 1
Topic: Transactions That Affect Revenue, Expenses, and
Withdrawals; Defining Accounting Terms
Learning Objective: 03-05 Prepare a trial balance from T
accounts.; 03-08 Define the accounting terms new to this chapter. Bloom’s:
Understand
AACSB: Analytical Thinking
AICPA: BB Industry; FN Reporting; FN Measurement
65)
Which of the following would result in an error when preparing the Trial
Balance?
1. Placing
the Accounts Payable balance in the Credit column
2. Placing
the Withdrawal account balance in the Debit column
3. Placing
a Revenue account balance in the Credit column
4. Placing
the balance in Prepaid Rent in the Credit column Answer: D
Explanation: A)
B)
C)
D)
Diff: 2
Topic: Transactions That Affect Revenue, Expenses, and
Withdrawals Learning Objective: 03-05 Prepare a trial balance from T accounts.
Bloom’s: Apply
AACSB: Analytical Thinking AICPA: BB Industry; FN Reporting
66)
Which of the following would cause the Trial Balance to be out of balance?
1. Placing
the Capital account balance in the Credit column
2. Placing
the Rent Expense account balance in the Debit column
3. Placing
the Accounts Receivable balance in the Credit column
4. Placing
the Equipment account balance in the Debit column Answer: C
Explanation: A)
B)
C)
D)
Diff: 2
Topic: Transactions That Affect Revenue, Expenses, and
Withdrawals Learning Objective: 03-05 Prepare a trial balance from T accounts.
Bloom’s: Understand AACSB: Analytical Thinking
AICPA: BB Industry; FN Reporting
- Which
of the following would cause the Debit column and the Credit column of the
Trial Balance to be unequal?
1. Placing
the Prepaid Rent balance in the Credit column
2. Placing
the Rent Expense balance in the Debit column
3. Placing
the Fees Income balance in the Credit column
4. Placing
the Office Equipment balance in the Debit column Answer: A
Explanation: A)
B)
C)
D)
Diff: 2
Topic: Transactions That Affect Revenue, Expenses, and
Withdrawals Learning Objective: 03-05 Prepare a trial balance from T accounts.
Bloom’s: Understand AACSB: Analytical Thinking
AICPA: BB Industry; FN Reporting
SHORT ANSWER QUESTIONS
- Separate
written records called are kept for each asset and liability
and for the owner’s equity of a
Answer: accounts Explanation:
Diff: 1
Topic: Assets, Liabilities, Owner’s Equity, Revenue, Expense
Accounts
Learning Objective: 03-01 Set up T accounts for assets,
liabilities, and owner’s equity.; 03-08 Define the accounting terms new to this
chapter.
Bloom’s: Remember AACSB: Analytic
AICPA: BB Industry; FN Reporting
- The
right side of an account is referred to as the ________ side of an Answer:
credit
Explanation:
Diff: 1
Topic: Debits and Credits
Learning Objective: 03-01 Set up T accounts for assets,
liabilities, and owner’s equity. Bloom’s: Remember
AACSB: Analytic
AICPA: BB Industry; FN Measurement; FN Reporting
70)
A decrease in a liability is recorded on the ________ side of the account.
Answer: debit or left
Explanation:
Diff: 1
Topic: Debits and Credits
Learning Objective: 03-01 Set up T accounts for assets, liabilities,
and owner’s equity. Bloom’s: Remember
AACSB: Analytic
AICPA: BB Industry; FN Measurement; FN Reporting
71)
Revenue and expense accounts are called accounts.
Answer: nominal or temporary
Explanation:
Diff: 1
Topic: Assets, Liabilities, Owner’s Equity, Revenue, Expense
Accounts
Learning Objective: 03-07 Develop a chart of accounts.; 03-08
Define the accounting terms new to this chapter. Bloom’s: Remember
AACSB: Analytic
AICPA: BB Industry; FN Reporting
72)
Expense accounts are increased on the ________ side of the account. Answer:
debit or left
Explanation:
Diff: 1
Topic: Assets, Liabilities, Owner’s Equity, Revenue, Expense
Accounts Learning Objective: 03-04 Set up T accounts for revenue and expenses.
Bloom’s: Remember
AACSB: Analytic
AICPA: BB Industry; FN Measurement
- When
equipment is purchased for cash, the cash account is credited and the
________ account is
Answer: equipment Explanation:
Diff: 1
Topic: Business Transactions in Accounts
Learning Objective: 03-02 Analyze business transactions and
enter them in the accounts. Bloom’s: Understand
AACSB: Analytic
AICPA: BB Industry; FN Measurement; FN Reporting
- A(n) account
is used to record increases in owner’s equity from the sale of goods or
Answer: revenue Explanation:
Diff: 1
Topic: Business Transactions in Accounts
Learning Objective: 03-04 Set up T accounts for revenue and
expenses. Bloom’s: Remember
AACSB: Analytic
AICPA: BB Industry; FN Measurement; FN Reporting
75)
The difference between the debit and credit side of an account is called the
account ________. Answer: balance
Explanation:
Diff: 1
Topic: Debits and Credits
Learning Objective: 03-03 Determine the balance of an account.
Bloom’s: Remember
AACSB: Analytic
AICPA: BB Industry; FN Measurement; FN Reporting
- A
small pencil figure written at the base of an amount column showing the
sum of the entries in the column is called a
Answer: footing Explanation:
Diff: 1
Topic: Debits and Credits
Learning Objective: 03-03 Determine the balance of an account.
Bloom’s: Remember
AACSB: Analytic
AICPA: BB Industry; FN Measurement
77)
The increase side of an account represents the _
balance of the account. Answer: normal
Explanation:
Diff: 1
Topic: Debits and Credits
Learning Objective: 03-03 Determine the balance of an account.
Bloom’s: Remember
AACSB: Analytic
AICPA: BB Industry; FN Measurement
- A
statement prepared to test the equality of total debits and credits after
transactions have been recorded is called a(n)
Answer: trial balance Explanation:
Diff: 1
Topic: Trial Balance
Learning Objective: 03-05 Prepare a trial balance from T
accounts. Bloom’s: Remember
AACSB: Analytic
AICPA: BB Industry; FN Reporting
- A
special type of owner’s equity account set up to record withdrawals of
assets by the owner for personal use is called a(n)
Answer: drawing Explanation:
Diff: 1
Topic: Assets, Liabilities, Owner’s Equity, Revenue, Expense
Accounts
Learning Objective: 03-01 Set up T accounts for assets,
liabilities, and owner’s equity. Bloom’s: Remember
AACSB: Analytic
AICPA: BB Industry; FN Measurement; FN Reporting
80)
The error that occurs when the number $5.00 is written as $50.00 is called a(n)
________ error. Answer: slide
Explanation:
Diff: 1
Topic: Business Transactions in Accounts
Learning Objective: 03-08 Define the accounting terms new to
this chapter. Bloom’s: Remember
AACSB: Analytic
AICPA: BB Industry; FN Measurement
81)
The error that occurs when the number $272.00 is written as $27.20 is called
a(n) ________ error. Answer: slide
Explanation:
Diff: 1
Topic: Business Transactions in Accounts
Learning Objective: 03-08 Define the accounting terms new to
this chapter. Bloom’s: Remember
AACSB: Analytic
AICPA: BB Industry; FN Measurement
82)
The error that occurs when the number $916 is written as $961 is called a(n)
________ error. Answer: transposition
Explanation:
Diff: 1
Topic: Business Transactions in Accounts
Learning Objective: 03-08 Define the accounting terms new to
this chapter. Bloom’s: Remember
AACSB: Analytic
AICPA: BB Industry; FN Measurement
83)
An entry on the right side of an account is called a(n) .
Answer: credit
Explanation:
Diff: 1
Topic: Debits and Credits
Learning Objective: 03-04 Set up T accounts for revenue and
expenses.; 03-08 Define the accounting terms new to this chapter. Bloom’s:
Remember
AACSB: Analytic
AICPA: BB Industry; FN Measurement
84)
An entry on the left side of an account is called a(n) ________. Answer: debit
Explanation:
Diff: 1
Topic: Debits and Credits
Learning Objective: 03-04 Set up T accounts for revenue and
expenses.; 03-08 Define the accounting terms new to this chapter. Bloom’s:
Remember
AACSB: Analytic
AICPA: BB Industry; FN Measurement
85)
Rent Revenue is increased by ________ the account. Answer: crediting
Explanation:
Diff: 1
Topic: Debits and Credits
Learning Objective: 03-04 Set up T accounts for revenue and
expenses. Bloom’s: Understand
AACSB: Analytic
AICPA: BB Industry; FN Measurement
86)
Another name for the profit and loss statement is the ________. Answer: Income
Statement
Explanation:
Diff: 1
Topic: Financial Statements
Learning Objective: 03-06 Prepare an income statement, a
statement of owner’s equity, and a balance sheet. Bloom’s: Remember
AACSB: Analytic
AICPA: BB Industry; FN Reporting
- The
account Moriah Paige, Capital, would appear on both the Statement of
Owner’s Equity and the
________.
Answer: Balance Sheet Explanation:
Diff: 2
Topic: Financial Statements
Learning Objective: 03-06 Prepare an income statement, a
statement of owner’s equity, and a balance sheet. Bloom’s: Apply
AACSB: Analytic
AICPA: BB Industry; FN Reporting
- The
order in which financial statements are prepared is determined by the fact
that information from one statement is needed to prepare the Which
statement is prepared last? _.
Answer: Balance Sheet Explanation:
Diff: 2
Topic: Financial Statements
Learning Objective: 03-06 Prepare an income statement, a
statement of owner’s equity, and a balance sheet. Bloom’s: Apply
AACSB: Analytic
AICPA: BB Industry; FN Reporting
- In
a Chart of Accounts, each category of accounts is given a ________ of
numbers with gaps so that additional accounts can be added when
Answer: series Explanation:
Diff: 2
Topic: Chart of Accounts
Learning Objective: 03-07 Develop a chart of accounts. Bloom’s:
Understand
AACSB: Analytic
AICPA: BB Industry; FN Reporting
ESSAY QUESTIONS
The following information should be used for questions 90-97.
Cash
Accounts Receivable Office Equipment Office Supplies
Accounts Payable Brandon Phipps, Capital
Brandon Phipps, Drawing Fees Income
Rent Expense Salaries Expense Utilities Expense
For each of the following transactions determine the accounts to
be debited and credited.
- Performed
services for cash
Answer: Debit Cash; credit Fees Income
Diff: 1
Topic: Business Transactions in Accounts
Learning Objective: 03-02 Analyze business transactions and
enter them in the accounts. Bloom’s: Apply
AACSB: Analytic
AICPA: BB Industry; FN Measurement; FN Reporting
- Purchased
office equipment on credit
Answer: Debit Office Equipment; credit Accounts Payable
Diff: 1
Topic: Business Transactions in Accounts
Learning Objective: 03-02 Analyze business transactions and
enter them in the accounts. Bloom’s: Apply
AACSB: Analytic
AICPA: BB Industry; FN Reporting; FN Measurement
92)
Received cash from credit customers
Answer: Debit Cash; credit Accounts Receivable
Diff: 1
Topic: Business Transactions in Accounts
Learning Objective: 03-02 Analyze business transactions and
enter them in the accounts. Bloom’s: Apply
AACSB: Analytic
AICPA: BB Industry; FN Reporting; FN Measurement
93)
Issued a check to a creditor
Answer: Debit Accounts Payable; credit Cash
Diff: 1
Topic: Business Transactions in Accounts
Learning Objective: 03-02 Analyze business transactions and
enter them in the accounts. Bloom’s: Apply
AACSB: Analytic
AICPA: BB Industry; FN Reporting; FN Measurement
94)
Performed services on credit
Answer: Debit Accounts Receivable; credit Fees Income
Diff: 1
Topic: Business Transactions in Accounts
Learning Objective: 03-02 Analyze business transactions and
enter them in the accounts. Bloom’s: Apply
AACSB: Analytic
AICPA: BB Industry; FN Reporting; FN Measurement
95)
Received a credit for damaged office equipment that was returned Answer: Debit
Accounts Payable; credit Office Equipment
Diff: 1
Topic: Business Transactions in Accounts
Learning Objective: 03-02 Analyze business transactions and
enter them in the accounts. Bloom’s: Apply
AACSB: Analytic
AICPA: BB Industry; FN Reporting; FN Measurement
96)
Paid Cash to purchase Office Supplies Answer: Debit Office Supplies; credit
Cash
Diff: 1
Topic: Business Transactions in Accounts
Learning Objective: 03-02 Analyze business transactions and
enter them in the accounts. Bloom’s: Apply
AACSB: Analytic
AICPA: BB Industry; FN Reporting; FN Measurement
97)
Issued checks to pay salaries
Answer: Debit Salaries Expense; credit Cash
Diff: 1
Topic: Business Transactions in Accounts
Learning Objective: 03-02 Analyze business transactions and
enter them in the accounts. Bloom’s: Apply
AACSB: Analytic
AICPA: BB Industry; FN Reporting; FN Measurement
37
- The
consulting firm of Martin and Associates uses the accounts listed On a
separate sheet of paper, set up T accounts for each of the accounts listed
and record the balances as of December 1, 2019 on the normal balance side
of the accounts.
|
Cash |
$ 5,800 |
Fees Income |
-0- |
|
Accounts Receivable |
9,500 |
Rent Expense |
-0- |
|
Office Equipment |
8,900 |
Utilities Expense |
-0- |
|
Accounts Payable |
5,000 |
Salaries Expense |
-0- |
|
Joan Martin, Capital |
19,200 |
|
|
|
Joan Martin, Drawing |
-0- |
|
|
The firm has the following transactions during the month of
December 2019. Record the effects of these transactions in the T accounts.
1. Paid
$2,100 for one month’s rent
2. Collected
$4,500 in cash from credit customers
3. Performed
services for $8,300 in cash
4. Paid
$5,300 for salaries
5. Issued
a check for $2,750 to a creditor
6. Performed
services for $11,650 on credit
7. Purchased
office equipment for $3,200 on credit
8. The
owner withdrew $2,800 in cash for personal expenses
9. Issued
a check for $925 to pay the monthly utility bill
Determine the account balances after the transactions have been
recorded Prepare a trial balance as of December 31, 2019.
Answer:
|
Cash |
|
Accounts Receivable |
|||||||
|
Bal. |
5,800 |
(a) |
2,100 |
|
Bal. |
9,500 |
(b) |
4,500 |
|
|
(b) |
4,500 |
(d) |
5,300 |
|
(f) |
11,650 |
|
|
|
|
(c) |
8,300 |
(e) |
2,750 |
|
|
|
|
|
|
|
|
|
(h) |
2,800 |
|
|
|
|
|
|
|
|
|
(i) |
925 |
|
|
|
|
|
|
|
Bal. |
4,725 |
|
|
|
|
Bal. 16,650 |
|
|
|
|
Office Equipment |
|
Accounts Payable |
||||||
|
Bal. |
8,900 |
|
|
|
(e) |
2,750 |
Bal. |
5,000 |
|
(g) |
3,200 |
|
|
|
|
|
(g) |
3,200 |
|
Bal. |
12,100 |
|
|
|
|
|
Bal. |
5,450 |
|
Joan Martin, Capital |
|
|
Joan Martin, Drawing |
|||||||
|
|
|
Bal. |
19,2 |
00 |
|
(h) |
2,800 |
|
|
|
|
Answer:
|
Fees Income |
|
Rent Expense |
|||||||
|
|
|
(c) |
8,300 |
|
(a) |
2,100 |
|
|
|
|
|
|
(f) |
11,650 |
|
|
|
|
|
|
|
|
|
Bal. |
19,950 |
|
|
|
|
|
|
|
Utilities Expense |
|
Salaries Expense |
|||||||
|
(i) |
925 |
|
|
|
(d) |
5,300 |
|
|
|
MARTIN AND ASSOCIATES
Trial Balance December 31, 2019
|
|
|
|
|
ACCOUNT NAME |
DEBIT |
CREDIT |
|
Cash |
$4,725 |
|
|
Accounts Receivable |
16,650 |
|
|
Office Equipment |
12,100 |
|
|
Accounts Payable |
|
$5,450 |
|
Joan Martin, Capital |
|
19,200 |
|
Joan Martin, Drawing |
2,800 |
|
|
Fees Income |
|
19,950 |
|
Rent Expense |
2,100 |
|
|
Utilities Expense |
925 |
|
|
Salaries Expense |
5,300 |
|
|
Totals |
$44,600 |
$44,600 |
Diff: 3
Topic: Business Transactions in Accounts
Learning Objective: 03-05 Prepare a trial balance from T
accounts. Bloom’s: Create
AACSB: Analytic
AICPA: BB Industry; FN Reporting; FN Measurement
- The
account balances from the December 31, 2019, trial balance for Haman
Accounting Services are shown Prepare an income statement, a statement of
owner’s equity, and a balance sheet for the month ended December 31, 2019.
HAMAN ACCOUNTING
Trial Balance December 31, 2019
39
|
ACCOUNT NAME |
DEBIT |
CREDIT |
|
Cash |
7,300 |
|
|
Accounts Receivable |
3,200 |
|
|
Supplies |
1,200 |
|
|
Prepaid Rent |
12,000 |
|
|
Equipment |
15,500 |
|
|
Accounts Payable |
|
9,450 |
|
Erik Haman, Capital |
|
20,000 |
|
Erik Haman, Drawing |
4,200 |
|
|
Fees Income |
|
21,000 |
|
Salaries Expense |
6,200 |
|
|
Utilities Expense |
850 |
|
|
Totals |
50,450 |
50,450 |
Answer:
HAMAN ACCOUNTING SERVICES
Income Statement
Month Ended December 31, 2019
|
Revenue |
|
|
|
|
Fees Income |
|
$21,000 |
|
|
Expenses |
|
|
|
|
Salaries Expense |
$6,200 |
|
|
|
Utilities Expense |
850 |
|
|
|
Total Expenses |
|
7,050 |
|
|
Net Income |
|
$13,950 |
|
HAMAN ACCOUNTING SERVICES
Statement of Owner’s Equity Month Ended December 31, 2019
|
Erik Haman, Capital, Dec 1, 2019 |
|
$ 20,000 |
|
Net Income |
$13,950 |
|
|
Less Withdrawals |
4,200 |
|
|
Increase in Capital |
|
9,750 |
|
Erik Haman, Capital, Dec. 31,
2016 |
|
$ 29,750 |
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