Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
Chapter 3--Recording Accounting Transactions Key
1. Which of the following is an internal event?
2. Which of the following is not an external event?
3. A list of all asset, liability, equity, revenue, expense, and dividend accounts which are used by the company is
called a:
4. Which of the following statements is true regarding economic events?
A. The signing of a service contract is an example of an external event that is recorded in the accounting
records.
5. In which order are the accounts listed in the chart of accounts?
6. What statement below best describes an Accounting Information System?
A. The system that identifies, records, summarizes, and communicates the various transactions of a company.
7. A chart of accounts is:
8. Which of the following is an internal event for a business entity?
9. The purchase of office equipment on credit has what effect on the accounting equation?
10. The payment of employee salaries has what effect on the accounting equation?
11. During March, Connor Corporation purchased supplies for cash. The supplies will be used in April. What
effect does this transaction have on the accounting equation at the time the supplies are purchased?
12. Bellarim Corporation made cash sales to customers. What effect does this transaction have on the
accounting equation?
13. Clay and Lora each invest $15,000 in Deyer, Inc. and are given shares of stock as evidence of their
ownership interest. What effect does this transaction have on the accounting equation of Deyer?
14. Machinery is purchased on credit. What effect does this transaction have on the accounting equation?
15. Lang Industries provided services to customers then sent invoices for the amounts owed. What effect does
16. Lang Industries received payments from customers who had been billed earlier for services provided. What
effect does this transaction have on Lang's accounting equation?
17. Payment is made for machinery purchased previously on credit. What effect does this transaction have on
the accounting equation?
A. Assets and liabilities increase
18. The telephone bill for the current period is received and recorded, but payment will be made later. What
effect does this transaction have on the accounting equation?
19. Payment is made for the telephone bill which was recorded previously. What effect does this transaction
have on the accounting equation?
20. Services are provided to customers who paid immediately. What effect does this transaction have on the
accounting equation?
21. Dividends are declared and paid to the company's stockholders. What effect does this transaction have on
22. When a firm borrows money, one effect on the accounting equation is a(n):
23. Which of the following statements best describes the effects of recognizing revenue earned by a business
entity?
24. Which of the following best describes one effect of recognizing expenses incurred by a business entity?
25. Which of the following statements regarding a company's operating activities is true?
A. Revenues decrease stockholders' equity
26. Which of the following transactions does not affect the total assets of Dusty Knoll Inc.?
27. Which of the following transactions affects the liabilities for Stallion Corporation?
28. The feature of accounting in which means that there are at least two accounts affected in every transaction
so that the accounting equation stays in balance is called:
29. The Regent Company purchased equipment for $100,000 cash. What is the effect on assets?
30. The two-column record used to accumulate increases and decreases for individual assets, liabilities, equity,
revenue, expense, and dividends items is a:
31. A credit means:
32. An entry made to the right side of an account is always a(n):
33. Debit entries are used to:
34. Credit entries are used to:
35. Which of the following accounts is decreased by a debit entry?
36. Which of the following accounts is decreased by a debit entry?
37. Which of the following accounts is increased by a debit entry?
38. Which of the following accounts is increased by a credit entry?
39. All of the following accounts have normal debit balances except:
40. All of the following accounts have normal credit balances except:
41. Which pair of accounts has the same set of rules for debit and credit entries?
42. Which pair of accounts has the same set of rules for debit and credit entries?
43. Fort Marcus County Club
Selected accounts for Fort Marcus Country Club are provided below.
Cash
Unearned
Revenue
8/1 bal.
6,000
8/3
600
8/3
600
8/5
500
8/7
1,100
Accounts
Receivable
Membership
Revenue
8/2
1,800
8/7
1,100
8/2
1,800
8/5
500
Refer to the information provided for Fort Marcus Country Club. On which date did the country club make a credit sale of club memberships?
44. Fort Marcus County Club
Selected accounts for Fort Marcus Country Club are provided below.
Cash
Unearned
Revenue
8/1 bal.
6,000
8/3
600
8/3
600
8/5
500
8/7
1,100
Accounts
Receivable
Membership
Revenue
8/2
1,800
8/7
1,100
8/2
1,800
8/5
500
Refer to the information provided for Fort Marcus Country Club. On which date did the country club make cash sales for club membership fees?
45. Fort Marcus County Club
Selected accounts for Fort Marcus Country Club are provided below.
Cash
Unearned
Revenue
8/1 bal.
6,000
8/3
600
8/3
600
8/5
500
8/7
1,100
Accounts
Receivable
Membership
Revenue
8/2
1,800
8/7
1,100
8/2
1,800
8/5
500
Refer to the information provided for Fort Marcus Country Club. On which date did the country club collect an advance of membership fees?
46. Fort Marcus County Club
Selected accounts for Fort Marcus Country Club are provided below.
Cash
Unearned
Revenue
8/1 bal.
6,000
8/3
600
8/3
600
8/5
500
8/7
1,100
Accounts
Receivable
Membership
Revenue
8/2
1,800
8/7
1,100
8/2
1,800
8/5
500
Refer to the information provided for Fort Marcus Country Club. Which of the following describes the transactions which occurred on August 7th?
47. Fort Marcus County Club
Selected accounts for Fort Marcus Country Club are provided below.
Cash
Unearned
Revenue
8/1 bal.
6,000
8/3
600
8/3
600
8/5
500
8/7
1,100
Accounts
Receivable
Membership
Revenue
8/2
1,800
8/7
1,100
8/2
1,800
8/5
500
Refer to the information provided for Fort Marcus Country Club. Assuming that there are no other transactions, how much was owed to the country
club by the members on August 7th?
48. What type of account is increased with a debit but is a decrease to retained earnings?
49. An account is said to have a debit balance if:
50. The correct term for the entry made on the left side of a T-account is:
51. The chronological record in which transactions are initially recorded in the order in which they occur is
called a:
53. The process of transferring amounts from the book of original entry into the ledger is referred to as:
54. The term for the process of recording accounting transactions in the general journal is:
55. When the amount for a debit entry in a general journal is transferred to a specific account in the general
ledger, it must be posted as a:
56. Which of the following statements is true?
A. If a debit entry is made to an account in the general journal, the same account will receive a credit entry
when the amount is posted to the general ledger.
57. Which of the following statements is true?
A. An entry in a general ledger account can be traced to the trial balance by referring to the page listed in the
posting reference column of that ledger account.
58. A trial balance is a(n):
59. If the sum of the debits is not equal to the sum of the credits in a trial balance, then:
60. Which of the following financial reports determines if the accounting equation is in balance?
61. Which of the following will not cause a trial balance to be out of balance?
62. Randomly listed below are the steps for preparing a trial balance:
(1)
Verify that the total of the debit column equals the total of the credit column.
(2)
List the accounts from the ledger and enter their debit or credit balance in the debit or credit column of the trial balance.
(3)
List the name of the company, the title of the trial balance, and the date on which the trial balance is prepared.
(4)
Total the debit and credit columns of the trial balance.
What is the proper order of these steps?
63. A trial balance is prepared to:
64. The accounts in the ledger of Monroe Entertainment Co. are listed in alphabetical order. All accounts have
normal balances.
Accounts payable
3,500
Fees earned
4,000
Accounts receivable
4,500
Insurance expense
800
Investment
3,000
Land
3,000
Cash
1,600
Wages expense
1,400
Dividends
2,200
Capital stock
9,000
Prepare a trial balance. The total of the debits is:
65. Bravada Enterprises
Transactions for Bravada Enterprises are provided below.
Sept. 1
Bills are sent to clients for services provided in August for the amount of $2,200.
Sept. 9
Barlue Furnishings delivers $1,500 of office furniture and $500 of office supplies to Bravada, leaving an invoice for
$2,000.
Sept. 15
Payment is made to Barlue for the office furniture and supplies delivered on September 9.
Sept. 23
A $630 bill for advertising for the month of September is received.
It will be paid on its due date in October.
Sept. 30
Salaries of $450 are paid to employees.
Refer to the transactions that occurred at Bravada Enterprises. The journal entry to record the September 1st transaction will include a debit of
$2,200 to:
66. Bravada Enterprises
Transactions for Bravada Enterprises are provided below.
Sept. 1
Bills are sent to clients for services provided in August for the amount of $2,200.
Sept. 9
Barlue Furnishings delivers $1,500 of office furniture and $500 of office supplies to Bravada, leaving an invoice for
$2,000.
Sept. 15
Payment is made to Barlue for the office furniture and supplies delivered on September 9.
Sept. 23
A $630 bill for advertising for the month of September is received.
It will be paid on its due date in October.
Sept. 30
Salaries of $450 are paid to employees.
Refer to the transactions that occurred at Bravada Enterprises. The journal entry to record the September 9th transaction will include a credit of
$2,000 to:
67. Bravada Enterprises
Transactions for Bravada Enterprises are provided below.
Sept. 1
Bills are sent to clients for services provided in August for the amount of $2,200.
Sept. 9
Barlue Furnishings delivers $1,500 of office furniture and $500 of office supplies to Bravada, leaving an invoice for
$2,000.
Sept. 15
Payment is made to Barlue for the office furniture and supplies delivered on September 9.
Sept. 23
A $630 bill for advertising for the month of September is received.
It will be paid on its due date in October.
Sept. 30
Salaries of $450 are paid to employees.
Refer to the transactions that occurred at Bravada Enterprises. The journal entry to record the September 15th transaction will include a debit of
$2,000 to:
68. Bravada Enterprises
Transactions for Bravada Enterprises are provided below.
Sept. 1
Bills are sent to clients for services provided in August for the amount of $2,200.
Sept. 9
Barlue Furnishings delivers $1,500 of office furniture and $500 of office supplies to Bravada, leaving an invoice for
$2,000.
Sept. 15
Payment is made to Barlue for the office furniture and supplies delivered on September 9.
Sept. 23
A $630 bill for advertising for the month of September is received.
It will be paid on its due date in October.
Sept. 30
Salaries of $450 are paid to employees.
Refer to the transactions that occurred at Bravada Enterprises. The journal entry to record the September 23rd transaction will include a credit of
$630 to:
69. Bravada Enterprises
Transactions for Bravada Enterprises are provided below.
Sept. 1
Bills are sent to clients for services provided in August for the amount of $2,200.
Sept. 9
Barlue Furnishings delivers $1,500 of office furniture and $500 of office supplies to Bravada, leaving an invoice for
$2,000.
Sept. 15
Payment is made to Barlue for the office furniture and supplies delivered on September 9.
Sept. 23
A $630 bill for advertising for the month of September is received.
It will be paid on its due date in October.
Sept. 30
Salaries of $450 are paid to employees.
Refer to the transactions that occurred at Bravada Enterprises. The journal entry to record the September 30th transaction will include a credit to:
A. Salaries expense.
70. Bravada Enterprises
Transactions for Bravada Enterprises are provided below.
Sept. 1
Bills are sent to clients for services provided in August for the amount of $2,200.
Sept. 9
Barlue Furnishings delivers $1,500 of office furniture and $500 of office supplies to Bravada, leaving an invoice for
$2,000.
Sept. 15
Payment is made to Barlue for the office furniture and supplies delivered on September 9.
Sept. 23
A $630 bill for advertising for the month of September is received.
It will be paid on its due date in October.
Sept. 30
Salaries of $450 are paid to employees.
Refer to the transactions that occurred at Bravada Enterprises. Based on these transactions, what is the total amount of expenses that should appear
on Bravada's income statement for September?
A. $ 430
71. Hesson Properties, Inc.
Transactions for Hesson Properties are provided below.
Nov. 1
Hesson purchases two new maintenance carts on credit at $375 each. The carts are added to Hesson's property, plant, and
equipment records. Payment is due in 30 days.
Nov. 8
Hesson accepts $75 of advance payments from customers for services to be provided in December.
Nov. 15
Hesson receives the utility bill for $150. Payment is due in 30 days.
Nov. 20
Customers are billed $750 by Hesson for property services.
Payment is due from the customers in 30 days.
Nov. 30
Hesson received $500 from customers who were billed on November 20th.
Refer to the transactions that occurred at Hesson Properties. Based on these transactions, what is the journal entry to record the November 1st
transaction?
72. Hesson Properties, Inc.
Transactions for Hesson Properties are provided below.
Nov. 1
Hesson purchases two new maintenance carts on credit at $375 each. The carts are added to Hesson's property, plant, and
equipment records. Payment is due in 30 days.
Nov. 8
Hesson accepts $75 of advance payments from customers for services to be provided in December.
Nov. 15
Hesson receives the utility bill for $150. Payment is due in 30 days.
Nov. 20
Customers are billed $750 by Hesson for property services.
Payment is due from the customers in 30 days.
Nov. 30
Hesson received $500 from customers who were billed on November 20th.
Refer to the transactions that occurred at Hesson Properties. Based on these transactions, what is the journal entry to record the November 8th
transaction?
A. Cash 75
Service Revenue 75
73. Hesson Properties, Inc.
Transactions for Hesson Properties are provided below.
Nov. 1
Hesson purchases two new maintenance carts on credit at $375 each. The carts are added to Hesson's property, plant, and
equipment records. Payment is due in 30 days.
Nov. 8
Hesson accepts $75 of advance payments from customers for services to be provided in December.
Nov. 15
Hesson receives the utility bill for $150. Payment is due in 30 days.
Nov. 20
Customers are billed $750 by Hesson for property services.
Payment is due from the customers in 30 days.
Nov. 30
Hesson received $500 from customers who were billed on November 20th.
Refer to the transactions that occurred at Hesson Properties. Based on these transactions, what is the journal entry to record the November 15th
transaction?
A. Utilities Expense 150
Cash 150
74. Hesson Properties, Inc.
Transactions for Hesson Properties are provided below.
Nov. 1
Hesson purchases two new maintenance carts on credit at $375 each. The carts are added to Hesson's property, plant, and
equipment records. Payment is due in 30 days.
Nov. 8
Hesson accepts $75 of advance payments from customers for services to be provided in December.
Nov. 15
Hesson receives the utility bill for $150. Payment is due in 30 days.
Nov. 20
Customers are billed $750 by Hesson for property services.
Payment is due from the customers in 30 days.
Nov. 30
Hesson received $500 from customers who were billed on November 20th.
Refer to the transactions that occurred at Hesson Properties. Based on these transactions, what is the journal entry to record the November 20th
transaction?
A. Cash 750
Accounts Receivable 750
75. Hesson Properties, Inc.
Transactions for Hesson Properties are provided below.
Nov. 1
Hesson purchases two new maintenance carts on credit at $375 each. The carts are added to Hesson's property, plant, and
equipment records. Payment is due in 30 days.
Nov. 8
Hesson accepts $75 of advance payments from customers for services to be provided in December.
Nov. 15
Hesson receives the utility bill for $150. Payment is due in 30 days.
Nov. 20
Customers are billed $750 by Hesson for property services.
Payment is due from the customers in 30 days.
Nov. 30
Hesson received $500 from customers who were billed on November 20th.
Refer to the transactions that occurred at Hesson Properties. Based on these transactions, what is the journal entry to record the November 30th
transaction?
76. Hesson Properties, Inc.
Transactions for Hesson Properties are provided below.
Nov. 1
Hesson purchases two new maintenance carts on credit at $375 each. The carts are added to Hesson's property, plant, and
equipment records. Payment is due in 30 days.
Nov. 8
Hesson accepts $75 of advance payments from customers for services to be provided in December.
Nov. 15
Hesson receives the utility bill for $150. Payment is due in 30 days.
Nov. 20
Customers are billed $750 by Hesson for property services.
Payment is due from the customers in 30 days.
Nov. 30
Hesson received $500 from customers who were billed on November 20th.
Refer to the transactions that occurred at Hesson Properties. Based on these transactions, how much is still owed to Hesson from its customers at the
end of November?
77. Several transactions are listed below, with the accounting equation stated to the right side of each. Use the
following identification codes to indicate the effects of each transaction on the accounting equation: I =
Increase; D = Decrease; NE = No net effect. Write your answers in the space provided under the accounting
equation, being sure to include an identification code for each element of the accounting equation. An example
is provided before the first transaction.
Stockholders'
Assets
=
Liabilities
+
Equity
Example:
Common
stock is
issued to
investors in
the company
I
NE
I
A)
Services are sold for cash.
B)
Equipment is purchased on credit.
C)
Payment is made for equipment purchased on credit.
D)
Services are sold for credit.
E)
Collection of accounts receivable from customer.
F)
Dividends are paid to stockholders.
G)
Land and building are acquired in exchange for shares of
common stock.
H)
Utility bill is received and recorded; will be paid later.
