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Exam 2: Analyzing Transactions

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Question 21

True/False

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Liabilities are increased with debits and decreased with credits.

A) True
B) False

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Question 22

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The balance of an account is determined by

A) adding all of the debits to all of the credits
B) always subtracting the debits from the credits
C) always subtracting the credits from the debits
D) adding all of the debits, adding all of the credits, and then subtracting the smaller sum from the larger sum

E) C) and D)
F) All of the above

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Question 23

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The process of initially recording a business transaction is called

On November 10, JumpStart Co. provides $2,900 in services to clients. At the time of service, the clients paid $600 in cash and put the balance on account. a) Journalize this event. b) On November 20, JumpStart Co. clients paid an additional $900 on their accounts due. Journalize this event. c) Calculate the accounts receivable balance on November 30.

The erroneous moving of an entire number one or more spaces to the right or left, such as writing $85 as $850, is called a transposition.

For a month's transactions for a typical medium-sized business, the accounts payable account is likely to have only credit entries.

Postings made to standard account forms show a new balance after each entry.

Which of the following entries records the purchase of common stock by stockholders?

The recording of cash receipts to the cash account will be done by debiting the account.

The debit side of an account

Journalizing transactions using the double-entry bookkeeping system will eliminate fraud.

Several types of errors can be made during the journalizing and posting process. Match the following with their best description. -Debit posted as credit, or vice versa.

Of the following, which is true about assets?

In the chart of accounts, the balance sheet accounts are normally listed in which order?

On November 1, Nikle Company made a cash payment of $200,000 on a note payable that was generated in the purchase of a building and land. Provide the journal entry for this transaction.

Net income will result when

Journal entries can have more than two accounts as long as the debits equal the credits.

In which of the following types of accounts are decreases recorded by credits?

Calculate the following: a) Determine the cash receipts for April based on the following data: Cash payments during April $\quad \$ 63,000$ Cash account balance, April $1 \quad 25,500$ Cash account balance, April $30 \quad 31,750$ b) Determine the cash received from customers on account during April based on the following data: Accounts receivable account balance, April 1 $22,500 Accounts receivable account balance, April 30 15,250 Fees billed to customers during April 45,000

For each of the following accounts, indicate whether its normal balance is on the credit side or the debit side of the T account. -Copyrights