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Exam 2: Analyzing Business Transactions

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Question 51

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Entering transactions into the journal is called posting.

A) True
B) False

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Question 52

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In the journal provided,prepare journal entries (in good form)for the following transactions.If no entry is required,write "no entry." Omit explanations. Apr. 1 Investors opened a dry cleaning service, called Same Day Cleaners, by depositing $\$ 60,000$ into a business bank account and receiving 60,000 shares of $\$ 1$ par value stock in exchange. 3 Paid two years' rent in advance, $\$ 14,400$ . 6 Purchased dry cleaning equipment for $\$ 40,000$ . Paid $\$ 8,000$ in cash, the remainder to be paid in two weeks. 9 Hired a part-time worker, to be paid $\$ 300$ per week, starting tomorrow. 17 Paid the worker's weekly wage. 17 Recorded cash received for services performed during the week, $\$ 3,000$ . 20 Paid for the remainder of the equipment purchased on April 6. 21 Received $\$ 200$ in advance of cleaning and boxing a wedding gown. 23 Performed $\$ 500$ of dry cleaning services for Asa's Tuxedo Shop. It will remit payment in three days. 24 Paid the weekly wages. 26 Received payment from Asa's Tuxedo Shop. 30 Received a telephone bill for $\$ 100$ , which will be paid in two weeks.

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Question 53

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When a company has performed a service but has not yet received payment,what is the required journal entry to be recorded?

The accounts in a chart of accounts are normally listed in alphabetical order.

Which of the following terms does not mean the same as the others?

Which of the following errors will not cause the debit and credit columns of a trial balance to be unequal?

Another name for the ledger is the book of original entry.

In the journal provided,prepare journal entries (in good form)for the following transactions.If no entry is required,write "no entry." Omit explanations. May 1 Investors opened a dry cleaning service, called Junction Cleaners, by depositing $\$ 100,000$ into a business bank account and receiving 50,000 shares of $\$ 2$ par value stock in exchange. 3 Paid two years' rent in advance, $\$ 11,200$ . 6 Purchased dry cleaning equipment for $\$ 36,000$ . Paid $\$ 14,000$ in cash, the remainder to be paid in two weeks. 10 Hired a worker, to be paid $\$ 550$ per week. 17 Paid the worker's weekly wage. 17 Recorded cash received for services rendered during the week, $\$ 5,000$ . 20 Paid for the remainder of the equipment purchased on May 6. 21 Received $\$ 240$ in advance of cleaning and boxing a wedding gown. 23 Performed $\$ 390$ of dry cleaning services for Tuxedos Unlimited. It will remit payment in three days. 24 Paid the weekly wages. 26 Received payment from Tuxedos Unlimited. 30 Received a telephone bill for $\$ 114$ , which will be paid in two weeks.

The principal purpose of posting is to

The account Dividends has a normal credit balance.

When a company receives an electric bill but does not pay it right away,what is the required journal entry to be recorded?

Which of the following accounts has a normal debit balance?

If Accounts Payable has debit postings of $17,000,credit postings of $14,000,and a normal ending balance of $6,000,what was its beginning balance?

Which of the following statements is true about a journal entry?

Which pair of accounts follows the rules of debit and credit in the opposite manner?

The recognition issue deals with when a user of financial statements should use accounting information.

The Land and Building accounts may be combined into one account.

All companies use the same standard set of accounts.

A trial balance is normally prepared at the end of the day.

Use this journal entry to answer the following question. $\begin{array}{|l|l|l|r|r|}\hline\text { Nov. } & 16 & \text { Accounts Payable }& 685 \\&&\text { Cash } & & 685\\&&\text { Recorded payment of a liability } \\\hline\end{array}$ Explain how the above journal entry relates to the measurement issues of (a)recognition,(b)valuation,and (c)classification.