32) The accounts of Local Company at May 31, 2017 are as follows:
Account
Balance
Accounts Payable
$23,500
Accounts Receivable
$15,600
Cash
$68,000
Common Stock
$32,000
Dividends
$3,000
Insurance Expense
$2,100
Retained Earnings
$25,800
Salary Expense
$1,100
Sales Revenue
$10,000
Supplies
$1,500
What are the first four lines, in proper order, on the trial balance at May 31, 2017?
A) Accounts Payable, Accounts Receivable, Cash, Common Stock
B) Sales Revenue, Salary Expense, Insurance Expense, Supplies
C) Cash, Accounts Receivable, Supplies, Accounts Payable
D) Accounts Payable, Dividends, Common Stock, Retained Earnings
33) The accounts of Yardy Company are as follows on November 30, 2017:
Account
Balance
Accounts Payable
$24,500
Accounts Receivable
$18,600
Cash
$70,000
Common Stock
$36,000
Dividends
$7000
Insurance Expense
$5100
Retained Earnings
$29,800
Salary Expense
$12,000
Sales Revenue
$12,000
Supplies
$6500
What is the total of the debit column in the trial balance at November 30, 2017?
A) $97,300
B) $112,200
C) $119,200
D) $221,500
34) When listing the accounts on the trial balance, list the ________ accounts first and then the ________
accounts.
A) income statement; cash flow statement
B) asset; liability
C) income statement; balance sheet
D) revenues; stockholders‘ equity
35) An example of a transposition error is writing:
A) $500 as $50.
B) $4000 as $8000.
C) $600 as $1200.
D) $1500 as $5100.
36) An example of a slide-type error is writing:
A) $1600 as $6100.
B) $600 as $1200.
C) $4000 as $8000.
D) $700 as $70.
37) A company did not record the receipt and payment of an utility bill for $2200. Is the trial balance out
of balance?
A) No.
B) Yes, by $2200.
C) Yes, by $4400.
D) Yes, by an indeterminate amount.
38) A company posted a $6000 debit to Cash as $600. The credit of $6000 to Service Revenue in the entry
was posted correctly. Is the trial balance out of balance?
A) No.
B) Yes, by $600.
C) Yes, by $5400.
D) Yes, by $6000.
39) A company omitted a journal entry to record service revenue of $13,000 on account. Is the trial
balance out of balance?
A) No.
B) Yes, by $13,000.
C) Yes, by $26,000.
D) Yes, by an indeterminate amount.
40) A company incorrectly recorded a receipt of cash on account. Accounts Receivable was debited for
$900 and Cash was credited for $900. Is the trial balance out of balance?
A) No.
B) Yes, by $900.
C) Yes, by $1800.
D) Yes, by $2700.
41) When listing the assets in the trial balance, the balance for Accounts Receivable was transposed. The
correct balance is $2100 and the amount was written as $1200. Is the trial balance out of balance?
A) No.
B) Yes, by $1200.
C) Yes, by $900.
D) Yes, by $2100.
42) A company recorded a cash payment incorrectly. Accounts Receivable was debited for $900 and
Cash was credited for $900. The correct entry would debit Accounts Payable for $900 and credit Cash
for $900. Is the trial balance out of balance?
A) No.
B) Yes, by $900.
C) Yes, by $1800.
D) Yes, by an indeterminate amount.
43) When listing the accounts on the trial balance, where is the dividends account listed?
A) It is not listed on the trial balance.
B) After Retained Earnings.
C) After Service Revenue or Sales Revenue.
D) As part of the expense accounts.
44) Information for the trial balance is obtained from the:
A) journal.
B) ledger.
C) balance sheet.
D) income statement.
45) The dollar amounts listed on the trial balance are obtained from the:
A) beginning balances in the ledger accounts.
B) ending balances in the ledger accounts.
C) last period’s balance sheet and income statement.
D) this period’s balance sheet and income statement.
46) The trial balance is used to prepare the:
A) balance sheet only.
B) income statement only.
C) statement of retained earnings only.
D) all of the above.
47) Put an “X” in the appropriate box to indicate if the normal balance of an account is a debit or a credit
balance.
NORMAL BALANCE
NORMAL BALANCE
IS A DEBIT
IS A CREDIT
ACCOUNTS
Cash
Service Revenue
Accounts Receivable
Accounts Payable
Utilities Expense
Common Stock
Notes Payable
Land
Retained Earnings
Dividends
Rent Expense
ACCOUNTS
Cash
Service Revenue
Accounts Payable
Utilities Expense
Common Stock
Notes Payable
Land
Retained Earnings
Dividends
Rent Expense
48) Wrobell Company has the following incorrect trial balance available on December 31, 2017:
Account
Debit
Cash
$27,900
Accounts Receivable
$12,800
Inventory
$17,300
Supplies
$400
Land
$41,000
Accounts Payable
Common Stock
Sales Revenue
Salary Expense
$2,200
Rent Expense
$1,000
Utility Expense
$1,000
Totals
$103,600
The following errors in the trial balance were made:
1. Recorded $200 cash revenue received by debiting Accounts Receivable for $200 and crediting Sales
Revenue for $200.
2. Posted a $1,000 credit to Accounts Payable as $100.
3. Understated Common Stock by $200.
4. Omitted a journal entry that debits Insurance Expense for $3,700 and credits Cash for $3,700.
Prepare a corrected trial balance at December 31, 2017. A proper heading is not required.
Account
Debit
Credit
Cash
Accounts Receivable
$12,600
Inventory
$17,300
Supplies
Land
$41,000
Accounts Payable
Common Stock
$47,300
Sales Revenue
$33,800
Salary Expense
Rent Expense
$1,000
Utility Expense
$1,000
Insurance Expense
$3,700
Totals
$103,600
62
49) Timothy Company has the following trial balance at December 31, 2017:
Account
Debit
Cash
$31,200
Accounts Receivable
4,000
Supplies
300
Land
40,000
Accounts Payable
Short-term Notes Payable
Common Stock
Retained Earnings
Dividends
1,800
Service Revenue
Salary Expense
3,000
Rent Expense
1,500
Interest Expense
400
Utilities Expense
200
Totals
$82,400
Prepare a balance sheet at December 31, 2017. Include a proper heading.
64
50) Martin Company had the following transactions during its first month of operations:
June 1 The company received cash of $35,000 and issued common stock to the shareholders.
2 Borrowed $20,000 from the bank and signed a long-term note payable.
8 Purchased equipment with a short-term note payable for $10,000.
9 Performed services billed at $3,000 and received cash of $3,000.
10 Performed services for a client on account, $6,500.
12 Employees worked two weeks and were paid salaries of $1,000.
15 Paid the short-term note payable from the June 8 purchase.
22 Purchased office supplies on account for $7,000.
30 Paid amount due for office supplies.
30 Paid June’s monthly rent of $500.
30 Paid the monthly income taxes of $2,200.
30 The Board of Directors declared and paid dividends of $1,000.
Required:
1. Journalize the entries. Omit the explanations.
2. Prepare a single-step income statement for the first month of operations. Include a proper heading.
3. Prepare a statement of retained earnings for the first month of operations. Include a proper heading.