Chapter 02 – Double-Entry Accounting
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Page 91
15
Accounts Payable
1,220
Cash
1,220
23
Electricity Expense
430
Accounts Payable
430
31
Salaries Expense
850
Cash
850
POINTS:
1
DIFFICULTY:
Moderate
Bloom’s: Applying
QUESTION TYPE:
Subjective Short Answer
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.02-02 – LO: 02–02
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.06 – Recording Transactions
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 5:26 PM
DATE MODIFIED:
10/16/2017 4:19 PM
210. For the following, mark a “D” if the following account normally has a debit balance and mark a “C” if the following
account normally has a credit balance.
_____1. Notes Payable
_____2. Mortgage Payable
_____3. Dividends
_____4. Accounts Receivable
_____5. Common Stock
_____6. Rent Revenue
_____7. Unearned Revenue
_____8. Utility Expense
_____9. Automobiles
ANSWER:
POINTS:
DIFFICULTY:
QUESTION TYPE:
HAS VARIABLES:
LEARNING OBJECTIVES:
ACCREDITING STANDARDS:
DATE CREATED:
DATE MODIFIED:
211. Increases and decreases in various types of accounts are listed below. In each case, indicate by “Dr.“ or “Cr.” (a)
Chapter 02 – Double-Entry Accounting
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Page 92
whether the change in the account would be recorded as a debit or a credit and (b) whether the normal balance of the
account is a debit or a credit.
(a)
(b)
Recorded
As
Normal
Balance
(1)
Increase in Common Stock
________
_______
(2)
Increase in Dividends
________
_______
(3)
Decrease in Accounts Receivable
________
_______
(4)
Increase in Note Payable
________
_______
(5)
Increase in Accounts Payable
________
_______
(6)
Decrease in Supplies
________
_______
(7)
Decrease in Salaries Expense
________
_______
(8)
Increase in Accounts Receivable
________
_______
(9)
Increase in Cash
________
_______
(10)
Decrease in Land
________
_______
ANSWER:
(a)
(b)
(1)
Cr.
Cr.
(2)
Dr.
Dr.
(3)
Cr.
Dr.
(4)
Cr.
Cr.
(5)
Cr.
Cr.
(6)
Cr.
Dr.
(7)
Cr.
Dr.
(8)
Dr.
Dr.
(9)
Dr.
Dr.
(10)
Cr.
Dr.
POINTS:
1
DIFFICULTY:
Moderate
Bloom’s: Applying
QUESTION TYPE:
Subjective Short Answer
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.02-02 – LO: 02–02
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.02 – GAAP
ACCT.ACBSP.APC.06 – Recording Transactions
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 5:26 PM
DATE MODIFIED:
10/16/2017 4:19 PM
212. Record the following selected transactions for April in a two-column journal, identifying each entry by letter:
(a)
Received $18,000 from sale of common stock.
(b)
Purchased equipment for $27,000, paying $10,000 in cash and giving a note
payable for the remainder.
(c)
Paid $2,300 for rent for April.
(d)
Purchased $1,500 of supplies on account.
(e)
Recorded $9,800 of fees earned on account.
(f)
Received $7,500 in cash for fees earned.
(g)
Paid $1,200 to creditors on account.
(h)
Paid wages of $3,425.
(i)
Received $7,900 from customers on account.
Chapter 02 – Double-Entry Accounting
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(j)
Recorded dividends of $1,875.
ANSWER:
(a)
Cash
18,000
Common Stock
18,000
(b)
Equipment
27,000
Cash
10,000
Notes Payable
17,000
(c)
Rent Expense
2,300
Cash
2,300
(d)
Supplies
1,500
Accounts Payable
1,500
(e)
Accounts Receivable
9,800
Fees Earned
9,800
(f)
Cash
7,500
Fees Earned
7,500
(g)
Accounts Payable
1,200
Cash
1,200
(h)
Wages Expense
3,425
Cash
3,425
(i)
Cash
7,900
Accounts Receivable
7,900
(j)
Dividends
1,875
Cash
1,875
POINTS:
1
DIFFICULTY:
Challenging
Bloom’s: Applying
QUESTION TYPE:
Subjective Short Answer
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.02-02 – LO: 02–02
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.06 – Recording Transactions
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 5:26 PM
DATE MODIFIED:
10/16/2017 4:19 PM
213. On January 12, JumpStart Co. purchased $870 in office supplies.
(a) Journalize this transaction as if JumpStart paid cash.
(b) (1) Journalize this transaction as if JumpStart purchased the supplies on account.
(b) (2) On January 18, JumpStart pays the amount due. Journalize this event.
ANSWER:
(a)
Jan. 12
Office Supplies
870
Chapter 02 – Double-Entry Accounting
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Page 96
ANSWER:
Date
Description
Post.
Ref.
Debit
Credit
Jan. 1
Cash
14,000
Common Stock
14,000
2
Cash
9,500
Revenues
9,500
3
Accounts Receivable
4,200
Revenues
4,200
4
Advertising Expense
700
Cash
700
5
Cash
2,500
Accounts Receivable
2,500
6
Dividends
1,010
Cash
1,010
7
Telephone Expense
900
Accounts Payable
900
8
Accounts Payable
900
Cash
900
POINTS:
1
DIFFICULTY:
Moderate
Bloom’s: Applying
QUESTION TYPE:
Subjective Short Answer
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.02-02 – LO: 02–02
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.06 – Recording Transactions
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 5:26 PM
DATE MODIFIED:
10/16/2017 4:19 PM
217. On December 1, JumpStart Company provides $2,800 in services to clients.
(a) Journalize this event as if the clients had paid cash at the time the services were rendered.
(b)(1) Journalize this event as if the clients had been rendered the services on account.
(b)(2) Assume that the clients paid $1,200 of the amount on account on December 30. Journalize this transaction.
Chapter 02 – Double-Entry Accounting
QUESTION TYPE:
Subjective Short Answer
ANSWER:
(a) Dec. 1
Cash
2,800
Fees Earned
2,800
(b)(1) Dec. 1
Accounts Receivable
2,800
Fees Earned
2,800
(b)(2) Dec. 30
Cash
1,200
Accounts Receivable
1,200
POINTS:
1
DIFFICULTY:
Moderate
Bloom’s: Applying
QUESTION TYPE:
Subjective Short Answer
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.02-02 – LO: 02–02
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.06 – Recording Transactions
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 5:26 PM
DATE MODIFIED:
10/16/2017 4:19 PM
218. Analyze the effect of the following transactions on the accounting equation.
(a)
The company paid $725 to a vendor for supplies purchased previously on account.
(b)
The company performed $850 of services and billed the customer.
(c)
The company received a utility bill for $395 and will pay it next month.
(d)
The company paid dividends of $145.
(e)
The company paid $315 in salaries to its employees.
(f)
The company collected $730 of cash from its customers on account.
Some of the possible effects of a transaction on the accounting equation are listed below:
(1)
Assets, Dr.; Assets, Cr.
(2)
Assets, Dr.; Stockholders’ Equity, Cr.
(3)
Assets, Dr.; Liabilities, Cr.
(4)
Assets, Dr.; Revenues, Cr.
(5)
Liabilities, Dr.; Assets, Cr.
(6)
Dividends, Dr.; Assets, Cr.
(7)
Expenses, Dr.; Assets, Cr.
(8)
Expenses, Dr.; Liabilities, Cr.
Put the appropriate letter next to each transaction.
ANSWER:
Transaction
Effect on the accounting equation
(a)
5
(b)
4
(c)
8
(d)
6
(e)
7
(f)
1
POINTS:
1
DIFFICULTY:
Bloom’s: Applying
Moderate
Chapter 02 – Double-Entry Accounting
b.
Accounts receivable payment for $7,800 was recorded as a debit to Cash and a
credit to Fees Earned.
Journalize the entries to correct the errors. Omit the explanations.
ANSWER:
a.
Dividends
5,000
Office Expense
5,000
b.
Fees Earned
7,800
Accounts Receivable
7,800
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Applying
QUESTION TYPE:
Subjective Short Answer
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.02-04 – LO: 02–04
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.06 – Recording Transactions
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 5:26 PM
DATE MODIFIED:
10/16/2017 4:19 PM
224. For each of the following errors, considered individually, indicate whether the error would cause the trial balance
totals to be unequal. If the error would cause the trial balance totals to be unequal, indicate whether the debit or credit
total is higher and by how much.
A.
Payment of a cash dividend $6,800 was journalized and posted as a debit of
$8,600 to Salaries Expense and a credit of $8,600 to Cash.
B.
A fee of $9,780 earned was debited to Accounts Receivable for $7,980 and
credited to Fees Earned for $9,780.
C.
A payment of $3,000 to a creditor was posted as a credit of $3,000 to Accounts
Payable and a credit of $3,000 to Cash.
ANSWER:
a.
The totals are equal.
b.
The totals are unequal. The credit total is higher by $1,800.
c.
The totals are unequal. The credit total is higher by $6,000.
POINTS:
1
DIFFICULTY:
Challenging
Bloom’s: Applying
QUESTION TYPE:
Subjective Short Answer
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.02-04 – LO: 02–04
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.05 – Accounting Cycle
ACCT.ACBSP.APC.09 – Financial Statements
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 5:26 PM
DATE MODIFIED:
10/16/2017 4:19 PM
225. Below is the unadjusted trial balance for Dawson Designs.
REQUIRED: