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Exam 3: The Double-Entry Accounting System

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Question 61

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Indicate whether each of the following statements is true or false. _____ a)The entry to record the purchase of supplies involves a debit to Supplies Expense and a credit to Cash. _____ b)The entry to record the amount of supplies used involves a debit to Supplies Expense and a credit to Supplies. _____ c)An asset use transaction may involve a debit to an asset and a credit to a liability. _____ d)An asset exchange transaction may involve a debit to an asset and a credit to a liability. _____ e)A claims exchange transaction may involve a debit to a liability and a credit to revenue.

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a)False b)...

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Question 62

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Indicate how each event affects the elements of financial statements.Use the following letters to record your answer in the box shown below each element.You do not need to enter amounts. -An adjusting entry recorded as a debit to Interest Expense and a credit to Interest Payable.

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(N)(I)(D)(...

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Question 63

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Powell Corporation recorded a business event using T-accounts as follows: Which of the following reflects how this event affects the company's financial statements?

Gallahan Corporation recorded an adjusting entry using T-accounts as follows: Which of the following reflects how this adjustment affects the company's financial statements?

Indicate how each event affects the elements of financial statements.Use the following letters to record your answer in the box shown below each element.You do not need to enter amounts. -An adjusting entry recorded as a debit to Salaries Expense and a credit to Salaries Payable.

The trial balance of Barger Company at the end of the accounting period,immediately prior to recording closing entries,showed: After closing entries,the Retained Earnings account will have a balance of

Indicate how each event affects the elements of financial statements.Use the following letters to record your answer in the box shown below each element.You do not need to enter amounts. -A transaction recorded as a debit to Accounts Receivable and a credit to a revenue account.

What statement is true regarding the trial balance?

Many companies choose to end their fiscal years during a part of the year when they expect low activity.

For each of the following unrelated transactions,list the accounts that will be debited and credited. a)Issued common stock for cash. b)Provided services for cash. c)Purchased office supplies on account. d)Paid for the office supplies purchased above. e)Paid cash dividends to stockholders.

To record the acquisition of office supplies on account,an accountant would credit Office Supplies.

Are liability accounts increased by debits or credits?

The information in the following T-accounts of Gibbs Company indicates that:

Warren Company began the accounting period with a $32,000 debit balance in its accounts receivable account.During the accounting period,the company recorded revenue on account amounting to $88,000.The accounts receivable account at the end of the accounting period contained a $16,000 debit balance.Based on this information,the cash collected from accounts receivable during the period is

Credit entries

Closing entries move all the yearly data for revenues,expenses,and dividends into the Retained Earnings account.

Nelson Company began operations on December 1,2016.The following transactions were recorded in December: 1) The business received $9,000 cash from the issuance of common stock to its stockholders. 2) Provided services on account for $7,500. 3) Paid $4,500 cash for land. 4) Accrued $3,000 of salaries expenses. 5) Purchased $900 of supplies on account to be used in January. 6) Collected $3,900 from customers. At December 31,2016,the total debits in the company's adjusted trial balance would be

For each of the following,identify the type of event as asset source (AS),asset use (AU),asset exchange (AX),or claims exchange (CX).Also show the effect (increase or decrease)of each transaction on the components of the accounting equation.Write "NA" under any element not affected. 1)Debited cash and credited common stock. 2)Debited accounts receivable and credited service revenue. 3)Debited office supplies and credited accounts payable. 4)Debited prepaid rent and credited cash. 5)Debited cash and credited accounts receivable. 6)Debited accounts payable and credited cash. 7)Debited dividends and credited cash. 8)Debited rent expense and credited prepaid rent.

The general journal is a list of a business's accounts and their account numbers.

Debits decrease asset accounts.