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Exam 2: The Accounting Information System

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Question 51

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Listed below are ten terms followed by a list of phrases that describe or characterize five of the terms. Match each phrase with the best term by placing the letter designating the term in the space provided. -____ Resources owned by a company.

A) Assets
B) Debit
C) Journal entry
D) Liabilities
E) Revenues
F) Expenses
G) Credit
H) General ledger
I) Trial balance
J) Dividends

K) A) and F)
L) B) and I)

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Question 52

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The general ledger includes all accounts used to record the company's transactions.

A) True
B) False

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Question 53

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When a company incurs workers' salaries but does not pay them, how will the basic accounting equation be affected?

When a company pays $2,500 dividends to its stockholders, the transaction should be recorded as:

For each transaction, the total debit amounts must equal the total credit amounts.

Which of the following accounts would normally have a credit balance?

Tyler Incorporated receives $150,000 from investors for issuing them shares of its common stock. Tyler Incorporated records this transaction with a:

Listed below are ten terms followed by a list of phrases that describe or characterize five of the terms. Match each phrase with the best term by placing the letter designating the term in the space provided. -____ Resources earned by providing goods and services to customers.

Record the following transactions for the Stroud Music Store: (a) Provide music lessons to students for $12,000 on account. (b) Purchase music supplies on account, $1,500. (c) Pay rent for the current month, $2,000. (d) Receive $10,000 cash from students in (a) above.

Purchasing office supplies is recorded with a credit to office supplies.

For each transaction recorded in an accounting system, the basic equation that must be maintained at all times is:

Use the following information to prepare a trial balance. $\begin{array} { | l r l r | } \hline \text { Cash } & \$ 6,200 & \text { Dividends } & \$ 1,200 \\\text { Unearned revenue } & 1,200 & \text { Salaries expense } & 2,200 \\\text { Prepaid insurance } & 1,200 & \text { Accounts receivable } & 3,400 \\\text { Accounts payable } & 1,900 & \text { Common stock } & 6,200 \\\text { Retained earnings } & 1,600 & \text { Service revenue } & 7,100 \\\text { Utilities expense } & 3,000 & \text { Maintenance expense } & 800 \\\hline\end{array}$

A company pays $800 dividends to stockholders. Indicate the amount of increases and decreases in the accounting equation.

A company purchases machinery for $15,000 cash. Record the transaction.

On July 5, Harris Company purchased supplies from the hardware store for $600 on account. On July 10, Harris receives a bill from the hardware store as a reminder about the account balance. On July 17, Harris pays the account in full. How does Harris record the transaction on July 17?

Listed below are ten terms followed by a list of phrases that describe or characterize five of the terms. Match each phrase with the best term by placing the letter designating the term in the space provided. -____ Asset and expense accounts normally have this type of balance.

Receiving cash in advance from customers increases the Service Revenue account.

Assume that $18,000 cash is paid for insurance to cover the next year. The appropriate debit and credit are:

Which step in the process of measuring external transactions involves assessing the equality of total debits and total credits?

On December 1, 2012, Bears Inc. signed a contract with a retailer to supply maintenance for the next calendar year. How should this transaction be recorded on December 1, 2012?