Chapter 03 – The Accounting Cycle: Capturing Economic Events
Financial and Managerial Accounting, 17e 3-7
CHAPTER 3 NAME #
10-MINUTE QUIZ B SECTION
Enter the following transactions in the two-column journal provided for Charlie’s Cabinetry. You may
omit explanations.
Mar. 2 Purchased auto cleaning supplies from Robert Suppliers for $750 on account.
4 Collected an account receivable of $525 from a customer, Elegant Kitchens.
5 Paid $275 in partial payment of an account payable to Lucy Co for equipment purchased in
February.
7 Issued capital stock in exchange for $5,600 cash.
9 Purchased office equipment from Diamond’s Warehouse for $3,700; paid $1,700 cash and
issued a note payable due in 90 days for the balance.
Date General Journal
20__
Mar 2
4
5
7
9
Chapter 03 – The Accounting Cycle: Capturing Economic Events
CHAPTER 3 NAME #
10-MINUTE QUIZ C SECTION
Capital Financial Advisors, Inc. had the following transactions during January, its first month of
operations:
a Issued to Marvin Tycoon 9,000 shares of capital stock in exchange for his investment of
$45,000 cash.
b Borrowed $30,000 from a bank and signed a note payable due in three months.
c Purchased office furniture costing $19,750; paid $6,000 cash and charged the balance on
account.
d Paid $6,000 of the amount owed for office furniture.
e Issued an additional 2,000 shares of capital stock to an individual who invests $10,000 in the
business.
Instructions
Record the above transactions directly in the T accounts below. Identify each entry in a T
account with the letter shown for the transaction.
Cash
Office Furnishings
Notes Payable
Accounts Payable
Capital Stock
Chapter 03 – The Accounting Cycle: Capturing Economic Events
Financial and Managerial Accounting, 17e 3-9
CHAPTER 3 NAME #
10-MINUTE QUIZ D SECTION
The following transactions occurred during June, the first month of operations for Accurate
Manufacturing.:
* Issued 60,000 shares of capital stock to the owners of the corporation in exchange for $600,000
cash.
* Purchased a piece of land for $250,000, making an $80,000 cash down payment and signing a
note payable for the balance.
* Made a $100,000 cash payment on the note payable from the purchase of land.
* Purchased equipment on credit from National Supply for $40,000.
1 Refer to the above data. The balance in the Cash account at the end of June:
a $52,000. c $420,000.
b $350,000. d $380,000.
2 Refer to the above data. What are total assets of Precision Manufacturing at the end of
June?
a $710,000. c $630,000.
b $890,000. d $460,000.
3 Refer to the above data. What is the total of Precision’s liabilities at the end of June?
a $70,000. c $200,000.
b $110,000. d $240,000.
4 Refer to the above data. What is the total owners’ equity at the end of June?
a $60,000. c $240,000.
b $110,000. d $600,000
Chapter 03 – The Accounting Cycle: Capturing Economic Events
SOLUTIONS TO CHAPTER 3 10-MINUTE QUIZZES
5 D
Learning Objective: 2, 3, 4, 9
QUIZ B
Learning Objective: 2, 3, 4
Date General Journal
20__
Mar 2
Supplies
750
Accounts Payable
750
Bought supplies from Robert Suppliers.
4
Cash
525
Accounts Receivable
525
Collected from Elegant Kitchens
5
Accounts Payable
275
Cash
275
Partial payment on amount due to Lucy Co.
7
Cash
5,600
Capital Stock
5,600
Issued stock.
9
Office Equipment
3,700
Cash
1,700
Notes Payable
2,000
Purchased office equipment from Diamond’s
Warehouse; note due in 90 days.
Chapter 03 – The Accounting Cycle: Capturing Economic Events
QUIZ C
Learning Objective: 2, 3. 4
Cash
Office Furnishings
(a) 45,000
(c) 6,000
(c) 19,750
(b) 30,000
(d) 6,000
(e) 10,000
(b) 30,000
(a) 45,000
(e) 10,000
Chapter 03 – The Accounting Cycle: Capturing Economic Events
Brief
Exercises
Exercises
Problems
Cases
Net
1-10
1 – 15
1
2
3
4
5
6
7
8
1
2
3
4
Time estimate (in minutes)
< 10
< 15
30
30
30
30
35
50
60
60
15
30
5
10
Difficulty rating
E
E
M
M
M
M
M
S
S
S
M
S
E
E
Learning Objectives:
1
1, 15
1. Identify the steps in the accounting
cycle and discuss the role of accounting
records in an organization.
2. Describe a ledger account and a ledger.
1
1, 3, 6, 7, 15
3. Understand how balance sheet
accounts are increased or decreased.
2,4,5
1, 3, 6, 7, 9,
10, 11, 12,
13, 14, 15
4. Explain the double-entry system of
accounting.
2
1, 3, 6, 7, 8
5. Explain the purpose of a journal and
its relationship to the ledger.
1, 2
1, 3, 6, 7,
10, 11, 12
6. Explain the nature of net income,
revenue, and expenses.
5, 6, 7, 8,
9, 10
1, 2, 5, 6, 7,
8, 9, 13, 14
7. Apply the realization and matching
principles in recording revenue and
expenses.
3, 6, 7, 8,
9, 10
1, 2, 8, 9, 15
8. Understand how revenue and expense
transactions are recorded in an
accounting system.
3,4
1, 5, 8, 10,
11, 12, 13,
14
9. Prepare a trial balance and explain its
uses and limitations.
1
1, 4, 10, 11,
12
10. Distinguish between accounting cycle
procedures and the knowledge of
accounting.
1
1, 15
Assignment Guide to Chapter 3