Liabilities
Accounts receivable
1,500
Barry, Capital, January 1
Barry, Capital
38,525
Barry, Withdrawals
36,000
Service revenue
125,000
Supplies expense
3,425
Rent expense
18,000
Utilities expense
5,000
Gas expense
7,200
Wages expense
22,000
Totals
$166,125
$166,125
Repair shop equipment
27,000
Service truck
33,000
$71,900
Account Type
Normal Balance
a. Wages Expense
c. Commissions Earned
d. Salaries Payable
liability
credit
e. Owner, Capital
equity
credit
f. Unearned Advertising Revenue
g. Salaries Expense
h. Magazine Subscription Revenue
revenue
credit
i. Owner, Withdrawal
j. Prepaid Insurance
228)
For each of the accounts in the following table (1) identify the type of account as an asset, liability,
equity, revenue, or expense, and (2) identify the normal balance of the account.
Account Type
Normal Balance
a. Wages Expense
b. Accounts Receivable
c. Commissions Earned
d. Salaries Payable
e. Owner, Capital
f. Unearned Advertising Revenue
g. Salaries Expense
h. Magazine Subscription Revenue
i. Owner, Withdrawal
j. Prepaid Insurance
a. To increase Fees Earned
b. To decrease Cash
c. To decrease Unearned Revenue
d. To increase Accounts Receivable
e. To increase Owner, Capital
f. To decrease Notes Payable
g. To increase Prepaid Rent
h. To increase Salaries Expense
i. To increase Accounts Payable
j. To decrease Prepaid Insurance
229)
For each of the following accounts, identify whether a debit or credit yields the indicated change
a. To increase Fees Earned
b. To decrease Cash
c. To decrease Unearned Revenue
d. To increase Accounts Receivable
e. To increase Owner, Capital
f. To decrease Notes Payable
g. To increase Prepaid Rent
h. To increase Salaries Expense
i. To increase Accounts Payable
j. To decrease Prepaid Insurance
230)
Indicate on which of the financial statements the following items appears. Use I for income
statement, E for statement of owner’s equity, and B for balance sheet. More than one statement may
be appropriate for some items.
a. Fees Earned
b. Cash
138
a. Fees Earned
I
b. Cash
B
c. Unearned Revenue
B
d. Rent expense
I
e. Owner, Capital
E,B
f. Notes Payable
B
g. Prepaid Rent
B
h. Salaries Expense
I
i. Notes Payable
B
j. Owner, Withdrawal
E
June 1
Hope invested $400,000 into the business
June 2
Hope purchased an existing building and land for the hotel costing $900,000.
The purchase appraisal allocated $100,000 for land and $800,000 to the
building. Hope paid $250,000 and financed the remainder with a mortgage
note payable.
June 3
Paid $6,000 for a six month insurance policy on the hotel.
June 5
Purchased linens and other supplies costing $4,000 on account.
June 10
Received advance payments of $12,000 from customers that will be staying a
the hotel in July. Payments will be refunded if the customer cancels within 7
days of their scheduled arrival time.
June 14
Received cash payments of $13,000 from current customers staying at the
b. Cash
c. Unearned Revenue
d. Rent expense
e. Owner, Capital
f. Notes Payable
g. Prepaid Rent
h. Salaries Expense
i. Notes Payable
j. Owner, Withdrawal
231)
Jason Hope decided to open a hotel in his hometown. Prepare journal entries to record the following
transactions. Hope uses the accounts Room Rental Revenue and Event Revenue. All expenses for
special events are recorded as Event Expense. (Omit explanations.)
t
139
June 14
Received cash payments of $13,000 from current customers staying at the
hotel in June.
June 15
Paid the staff $2,000 for the first semi-monthly payroll.
June 16
Paid $500 for general maintenance and repairs expense.
June 17
Received $10,000 payment for a wedding reception during the weekend.
June 18
Paid the caterer $2,500 for providing catering services for the wedding
reception.
June 18
Paid Fixture Rentals $1,000 for table and chair rental.
June 19
Paid the florist $2,000 for flowers for the event.
June 24
Paid for the linens and supplies purchased on June 5.
June 25
Recorded an additional $5,000 from current hotel customers for June.
June 30
Paid the staff $2,000 for the second semi-monthly payroll.
June 30
The owner withdrew $4,000 for personal use.
232)
For each of the following (1) identify the type of account as an asset, liability, equity, revenue, or
expense, and (2) identify the normal balance of the account.
Account Title
Account Type
Normal Balance
(Debit or Credit)
a. Prepaid Insurance
b. Accounts Payable
c. J. Jason, Capital
d. Utilities Expense
e. Land
f. Services Revenue
g. Notes Receivable
h. Advertising Expense
i. Unearned Revenue 141
i. Unearned Revenue
j. Service Revenue
i. Unearned Revenue
j. Service Revenue
233)
The steps in the accounting process focus on analyzing and recording financial transactions and
events within a company. Those steps are shown below. Using the number system of 1 as the first
step and 4 as the last step in the process, number the steps in the correct order in which they would
occur (1 thru 4).
_____ Record relevant transactions and events in a journal,
_____ Post journal information to the ledger accounts
Prepare and analyze the trial balance
Analyzing each transaction
SHORT ANSWER QUESTIONS
234)
________ and ________ are the starting points for the analyzing and recording process.
235)
The second step in the analyzing and recording process is to record the transactions and events in
the book of original entry, called the .
236)
The third step in the analyzing and recording process is to post the information to the ________.
237)
________ documents identify and describe transactions and events and provide objective
evidence and amounts for recording.
238)
Revenues and expenses are two categories of ________ accounts.
239)
The ________ is a record containing all accounts used by a company as well as the transactions
and ending balances of each of the accounts.
240)
In a seller’s accounting records, _ are promises of payment waiting to be received from
customers.
241)
Unearned revenue is classified as a(an) on a business’s balance sheet.
242)
The four categories of equity accounts are ________, ________, ________, and ________.
243)
A ________ is a list of all the accounts used by a company and their identification codes but
does not contain the balances.
244)
A record containing all the separate accounts for a company as well as all of their balances is
called the ________.
245)
requires that each transaction affect, and be recorded in, at least two accounts. It also
means that total amounts debited must equal total amounts credited for each transaction.
246)
The is found by determining the difference between total debits and total credits for an
account, including any beginning balance.
247)
To increase an asset account we would ________ it and to increase a liability account, we would
________ it.
248)
Funky Music purchased $25,000 of equipment for cash. The Equipment asset account is
________ for $25,000 and the Cash account is ________ for $25,000.
249)
Jackson Brown Footwear had total liabilities of $130 million and total assets of $375 million. Its
debt ratio was ________. (round to one decimal place)
250)
is the process of transferring journal entry information from the journal to the ledger.
251)
A ________ gives a complete record of each transaction in one place, and shows debits and
credits for each transaction.
252)
A more structured format that is similar to a T-account in that it has columns for debits and
credits, but that is different in that it has columns for transaction date, explanation, and the
account balance is the ________.
253)
The posting process is the link between the ________ and the ________.
254)
You increase the Service Revenue account on the ________ side of its account.
255)
You decrease the Accounts Payable account on the ________ side of its account.