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Exam 2: Analyzing and Recording Transactions

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Question 41

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Unearned revenue is classified as _______________ that is satisfied by delivering products or services in the future.

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Question 42

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The owner's withdrawal account normally has a credit balance since it is an equity account.

A) True
B) False

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Question 43

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Crediting an expense account decreases it.

Of the following accounts, the one that normally has a credit balance is:

Unearned revenues are liabilities.

A credit entry:

The account used to record the transfers of assets from a business to its owner is:

Debit means the right side of an account.

The balances for the accounts of Mike's Maintenance Co. for the year ended December 31 are shown below. Each account shown had a normal balance. Calculate the correct balance for Cash and prepare a trial balance.

If a company purchases land paying cash, the journal entry to record this transaction will include a debit to Cash.

A $15 credit to Sales was posted as a $150 credit. By what amount is Sales in error?

Increases in liability accounts are recorded as debits.

Asset accounts normally have credit balances and revenue accounts normally have debit balances.

The credit purchase of a delivery truck for $4,700 was posted to Delivery Trucks as a $4,700 debit and to Accounts Payable as a $4,700 debit. What effect would this error have on the trial balance?

A ___________________________ gives a complete record of each transaction in one place, and shows debits and credits for each transaction.

Revenues and expenses are two categories of ____________________ accounts.

Indicate whether a debit or credit entry would be made to record the following changes in each account. a. To decrease Cash. b. To increase Owner, Capital. c. To decrease Accounts Payable. d. To increase Salaries Expense. e. To decrease Supplies. f. To increase Revenue. g. To decrease Accounts Receivable. h. To increase Owner, Withdrawals.

_____________________________ 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.

Tom Pines decided to open a bed and breakfast in his hometown. Prepare journal entries to record the following transactions.

At the beginning of January of the current year, Thomas Law Center's ledger reflected a normal balance of $52,000 for accounts receivable. During January, the company collected $14,800 from customers on account and provided additional services to customers on account totaling $12,500. Additionally, during January one customer paid Thomas $5,000 for services to be provided in the future. At the end of January, the balance in the accounts receivable account should be: