Accounts are records of increases and decreases in individual financial statement items. True False ANSWER: True DIFFICULTY: Easy Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-01 - LO: 02-01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.01 - Purpose - GAAP ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic A chart of accounts is a listing of accounts that make up the journal. True False ANSWER: False DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-01 - LO: 02-01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.01 - Purpose - GAAP - Measurement BUSPROG: Analytic The of accounts should be the same for each business. True False ANSWER: False DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-01 - LO: 02-01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.03 - Business Forms ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Accounts payable are accounts that you expect will be paid to you. True False ANSWER: False DIFFICULTY: Moderate Bloom's: Remembering trial
Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-01 - LO: 02-01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic A credit to the cash account will increase the account. True False ANSWER: False DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-01 - LO: 02-01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic The cash account will always be debited. True False ANSWER: False DIFFICULTY: Moderate Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-01 - LO: 02-01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic The recording of cash receipts to the cash account will be done by debiting the account. True False ANSWER: True DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-01 - LO: 02-01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic
ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.16 - Current Liabilities Reporting ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic A dividends account represents the amount of earnings paid to the stockholders. True ANSWER: True DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-01 - LO: 02-01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.03 - Business Forms ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Revenues are equal to the difference between cash receipts and cash payments. True False ANSWER: False DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-01 - LO: 02-01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.04 - Cash vs. Accrual ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Expenses result from using up assets or consuming services in the process of generating revenues. True False ANSWER: True DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-01 - LO: 02-01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Stockholders' equity will be reduced by the amount in the dividends account. True
ANSWER: False DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-02 - LO: 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.05 - Accounting Cycle ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic For a transactions for a typical medium-sized business, the accounts payable account is likely to have only credit entries. True False ANSWER: False DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-02 - LO: 02-02 ACCREDITING STANDARDS: - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Dividends decrease stockholders' equity and are listed on the income statement as a deduction from revenue. True False ANSWER: False DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-02 - LO: 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.09 - Financial Statements ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic The normal balance of revenue accounts is a credit. True False ANSWER: True DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-02 - LO: 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic
The normal balance of the dividends account is a True ANSWER: True DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-02 - LO: 02-02 ACCREDITING STANDARDS: - GAAP ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic The normal balance of an expense account is a credit. True False ANSWER: False DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-02 - LO: 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Expense accounts are increased by credits. True False ANSWER: False DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-02 - LO: 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Revenue accounts are increased by credits. True False ANSWER: True
DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-02 - LO: 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Liability accounts are increased by debits. True False ANSWER: False DIFFICULTY: Easy Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-02 - LO: 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Journalizing transactions the double-entry bookkeeping system will eliminate fraud. True False ANSWER: False DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-02 - LO: 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Transactions are listed in the journal chronologically. True False ANSWER: True DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-02 - LO: 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Journalizing is the process of entering amounts in the ledger. True
False ANSWER: False DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-02 - LO: 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic The process of recording a transaction in the journal is called journalizing. True False ANSWER: True DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-02 - LO: 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Transactions are initially entered into a record called a journal. True ANSWER: True DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-02 - LO: 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic The double-entry accounting system records each transaction twice. True False ANSWER: False DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-02 - LO: 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic The increase side of an account is also the side of the normal balance. True False
False ANSWER: False DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-02 - LO: 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Debits will increase unearned revenues and revenues. True ANSWER: DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-02 - LO: 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.04 - Cash vs. Accrual ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic All stockholders' equity accounts record increases to the accounts with credits. True False ANSWER: False DIFFICULTY: Challenging Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-02 - LO: 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Journalizing always eliminates fraudulent activity. True False ANSWER: False DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-02 - LO: 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.01 - Purpose ACCT.ACBSP.APC.06 - Recording Transactions
Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-03 - LO: 02-03 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic The post reference notation used in the journal is the page number. True False ANSWER: False DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-03 - LO: 02-03 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic A notation in the post reference column of the general journal indicates that the amount has been posted to the ledger. True False ANSWER: True DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-03 - LO: 02-03 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic The order of the flow of accounting data is (1) record in the ledger, (2) record in the journal, (3) prepare the financial statements. True False ANSWER: False DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-03 - LO: 02-03 ACCREDITING STANDARDS: ACCT.ACBSP.APC.05 - Accounting Cycle - Measurement BUSPROG: Analytic
True ANSWER: False DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-04 - LO: 02-04 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.09 - Financial Statements ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Posting a part of a transaction to the wrong account will cause the trial balance totals to be unequal. True False ANSWER: False DIFFICULTY: Challenging Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-04 - LO: 02-04 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.09 - Financial Statements ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic The erroneous arrangement of digits, such as writing $45 as $54, is called a slide. True False ANSWER: False DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-04 - LO: 02-04 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Journalizing a transaction with both the debit and the credit for $69 instead of $96 will cause the trial balance to be out of balance. True ANSWER: DIFFICULTY: Moderate Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-04 - LO: 02-04
assets, liabilities, stockholders' equity, revenues, expenses assets, liabilities, revenues, expenses, stockholders' equity ANSWER: c DIFFICULTY: Easy Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-01 - LO: 02-01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP - Financial Statements ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Which are the parts of the T account? title, date, total date, debit side, credit side title, debit side, credit side title, debit side, total ANSWER: c DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-01 - LO: 02-01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic The chart of accounts is designed to alphabetize the accounts to make reading easier for financial statement users organize accounts in order of dollar amount to simplify the accounting information for users summarize the transactions and determine ending account balances meet the information needs of a company's managers and other users of its financial statements ANSWER: d DIFFICULTY: Challenging Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-01 - LO: 02-01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP - Financial Statements ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Which group of accounts is comprised of only assets? Cash, Accounts Payable, Buildings Accounts Receivable, Revenue, Cash Prepaid Expenses, Buildings, Patents
ANSWER: d DIFFICULTY: Challenging Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-01 - LO: 02-01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP - Financial Statements ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic The stockholders' equity will be reduced by all of the following except revenues expenses dividends all of these ANSWER: a DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-01 - LO: 02-01 ACCREDITING STANDARDS: - GAAP ACCT.ACBSP.APC.09 - Financial Statements ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic The accounts in the ledger of Monroe Entertainment Co. are listed below. All accounts have normal balances. Accounts payable $1,500 Fees earned $3,600 Accounts receivable 1,800 Insurance expense 1,300 Prepaid insurance 2,000 Land 3,000 Cash 3,200 expense 1,400 Dividends 1,200 Common 8,800 Total assets are a. $10,000 b. $8,000 c. $9,700 d. $9,800 ANSWER: a DIFFICULTY: Challenging Bloom's: Applying LEARNING OBJECTIVES: - LO: 02-01 ACCREDITING - GAAP ACCT.ACBSP.APC.09
revenues the asset account the common stock account liabilities ANSWER: b DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-02 - LO: 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Net income will result when revenues (credits) > expenses (debits) revenues (debits) > expenses (credits) expenses (credits) = revenues (debits) revenues (credits) = expenses (debits) ANSWER: a DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-02 - LO: 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.09 - Financial Statements ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic of the following will increase stockholders' equity? expenses > revenues the company pays dividends revenues > expenses cash is received from customers on account ANSWER: c DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-02 - LO: 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.09 - Financial Statements ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Which of the following situations increase stockholders' equity? Supplies are purchased on account.
ANSWER: c DIFFICULTY: Moderate Applying LEARNING OBJECTIVES: FNMN.WARD.16.02-03 - LO: 02-03 ACCREDITING STANDARDS: - Accounting Cycle ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic What is the posting reference that will be in the prepaid insurance account? 11 15 3 13 ANSWER: c DIFFICULTY: Moderate Bloom's: Applying LEARNING OBJECTIVES: FNMN.WARD.16.02-03 - LO: 02-03 ACCREDITING STANDARDS: - Accounting Cycle - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic What posting references will be in the journal entry? a. 15, 11 b. 15, 3 c. 11, 3 d. 3, 15 ANSWER: a DIFFICULTY: Challenging Bloom's: Applying LEARNING OBJECTIVES: FNMN.WARD.16.02-03 - LO: 02-03 ACCREDITING STANDARDS: ACCT.ACBSP.APC.05 - Accounting Cycle ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic The chart of accounts for the Miguel Company includes the following: Account Name Account Number Cash 11 Accounts Receivable 13 Prepaid Insurance 15
BUSPROG: Analytic An overpayment error was discovered in computing and paying the wages of a Jamison Tree Trimming employee. When Jamison receives cash from the employee for the amount of the overpayment, which of the following entries will Jamison make? Cash, debit; Wages Expense, credit Wages Payable, debit; Wages Expense, credit Wages Expense, debit; Cash, credit Cash, Wages Payable, credit ANSWER: a DIFFICULTY: Challenging Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-04 - LO: 02-04 ACCREDITING STANDARDS: ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic If the two totals of a trial balance are not equal, it could be due to failure to record a transaction recording the same erroneous amount for both the debit and the credit parts of a transaction an error in determining the account balances, such as a balance being incorrectly computed recording the same transaction more than once ANSWER: c DIFFICULTY: Challenging Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-04 - LO: 02-04 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.09 - Financial Statements ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic When a transposition error is made on the trial balance, the difference between the debit and credit totals on the trial balance will be zero twice the amount of the transposition one-half the amount of the transposition divisible by 9 ANSWER: d DIFFICULTY: Moderate Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-04 - LO: 02-04 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.09 - Financial Statements ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic
DIFFICULTY: Moderate Bloom's: Applying LEARNING OBJECTIVES: FNMN.WARD.16.02-02 - LO: 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic On November 1, Nikle Company made a cash payment of $200,000 on a note payable that was generated in the purchase of a building and land. Provide the journal entry for this transaction. ANSWER: Nov. 1 Payable 200,000 Cash 200,000 Made payment on note payable. DIFFICULTY: Moderate Applying LEARNING OBJECTIVES: FNMN.WARD.16.02-02 - LO: 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.06 - Recording Transactions - Measurement BUSPROG: Analytic On January 7, stockholders invest $45,000 to initiate the operation of a business, JumpStart. Provide the journal entry for this transaction. ANSWER: Jan. 7 Cash 45,000 Common Stock 45,000 Invest cash in JumpStart. DIFFICULTY: Moderate Bloom's: Applying LEARNING OBJECTIVES: FNMN.WARD.16.02-02 - LO: 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic On January 8, stockholders transfer ownership of several pieces of office equipment to the new business, JumpStart, for common stock. When new, these items were worth $72,500. The fair market value of the equipment is $60,000. Journalize this transfer. ANSWER: Jan. 8 Office Equipment 60,000 Common Stock 60,000 Invested equipment in business. While stockholders may have paid $72,500 for this equipment sometime in the past, it should be transferred into the company at fair market value (FMV), $60,000. DIFFICULTY: Challenging Bloom's: Applying LEARNING OBJECTIVES: FNMN.WARD.16.02-02 - LO: 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic
On August 30, JumpStart incurred the following expenses: Payment to the landlord for August rent, $2,300 Payment to the Gas & Electric Company for August’s bill, $525 Payment of employee wages for the last half of August, $1,750 Payment of shopping center’s parking lot cleaning fee, $275 Journalize these payments as one compound journal entry. ANSWER: Aug. 30 Rent Expense 2,300 Utilities Expense 525 Wages Expense 1,750 Maintenance Expense 275 Cash 4,850 Paid expenses. DIFFICULTY: Challenging Bloom's: Applying LEARNING OBJECTIVES: FNMN.WARD.16.02-02 - LO: 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.04 - Cash vs. Accrual ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic On October 30, JumpStart pays $3,330 in dividends to its stockholders. Journalize this event. ANSWER: Oct. 30 Dividends 3,330 Cash 3,330 Payment of dividends to stockholders. DIFFICULTY: Easy Bloom's: Applying LEARNING OBJECTIVES: FNMN.WARD.16.02-02 - LO: 02-02 ACCREDITING STANDARDS: - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic 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. Write your answers in the space provided under the accounting equation. You need an identification code for each element of the accounting equation. An example is given before the first transaction. I-Increase D-Decrease NE-No Effect Assets = Liabilities + Stockholders’ Equity Example A stockholder invests in his new business by giving equipment valued at $3,500. I NE I (a) Cash sales are made. _____ _____ ​ _____
ANSWER: (a) Cash 18,000 Common Stock 18,000 Equipment 27,000 Cash 10,000 Notes Payable 17,000 Rent Expense 2,300 Cash 2,300 Supplies 1,500 Accounts Payable 1,500 Accounts Receivable 9,800 Fees Earned 9,800 Cash 7,500 Fees Earned 7,500 Accounts Payable 1,200 Cash 1,200 Wages Expense 3,425 Cash 3,425 Cash 7,900 Accounts Receivable 7,900 (j) Dividends Cash 1,875 1,875 DIFFICULTY: Challenging Bloom's: Applying LEARNING OBJECTIVES: FNMN.WARD.16.02-02 - LO: 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic On January 12, JumpStart Co. purchased $870 in office supplies. Journalize this transaction as if JumpStart paid cash. (1) Journalize this transaction as if JumpStart placed it on account. (b) (2) On January 18, JumpStart pays the amount due. Journalize this event. ANSWER: (a) Jan. 12 Office Supplies 870 Cash 870 (b)(1) Jan. 12 Office Supplies 870 Accounts Payable 870
​ ​ 3. Accounts Payable 6. Accounts Receivable ANSWER: 1. Credit entries only, normal credit balance Debit entries only, normal debit balance Both and credit entries, normal credit balance Both debit and credit entries, normal debit balance Both debit and credit entries, normal debit balance Both debit and credit entries, normal debit balance DIFFICULTY: Challenging Bloom's: Applying LEARNING OBJECTIVES: FNMN.WARD.16.02-02 - LO: 02-02 FNMN.WARD.16.02-03 - LO: 02-03 ACCREDITING STANDARDS: - GAAP ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic The bookkeeper for Brockton Industries prepared the following journal entries and posted the entries to the general ledger as indicated in the T accounts presented. Assume that the dollar amounts and the descriptions of the entries are correct. July 3 Accounts Receivable 1,000 Service Revenue 1,000 Customers were billed for services completed. Cash 500 Accounts Receivable 500 Payment is received from a customer billed for services on July 3. Office Supplies 600 Accounts Payable 600 Purchased office supplies on credit; payment is due in 30 days. 25 Office Furniture 700 Cash 700 Payment is made for office furniture received on July 25. ACCOUNTS RECEIVABLE SERVICE REVENUE 7/3 7/3 500 CASH ACCOUNTS PAYABLE 7/11 7/25 700 7/12 OFFICE SUPPLIES OFFICE FURNITURE 7/12 7/25
Bloom's: Applying LEARNING OBJECTIVES: FNMN.WARD.16.02-05 - LO: 02-05 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.09 - Financial Statements ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Match each of the following accounts with its proper account group from groups listed below. Assets Liabilities Stockholders’ Equity Revenue Expenses DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-01 - LO: 02-01 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.ACBSP.APC.09 - Financial Statements ACCT.ACBSP.APC.13 - Long-term Assets Reporting ACCT.ACBSP.APC.15 - Current Assets Reporting ACCT.ACBSP.APC.16 - Current Liabilities Reporting ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Unearned Rent ANSWER: b Prepaid Insurance ANSWER: a Fees Earned ANSWER: d Patents ANSWER: a Dividends ANSWER: c
For each of the following accounts, indicate whether its normal balance is on the credit side or the debit side of the T account. Credit side Debit side DIFFICULTY: Moderate Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-02 - LO: 02-02 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Common Stock ANSWER: a Accounts Receivable ANSWER: b Accounts Payable ANSWER: a Interest Earned ANSWER: a Copyrights ANSWER: b Several of errors can be made during the journalizing and posting process. Match the following with their best description. balance preparation errors Account balance errors Posting errors DIFFICULTY: Challenging Bloom's: Remembering LEARNING OBJECTIVES: FNMN.WARD.16.02-04 - LO: 02-04 ACCREDITING STANDARDS: ACCT.ACBSP.APC.02 - GAAP
ACCT.ACBSP.APC.06 - Recording Transactions ACCT.AICPA.FN.03 - Measurement BUSPROG: Analytic Balance incorrectly computed. ANSWER: b Debit or credit posting omitted. ANSWER: c amount posted to an account. ANSWER: c Column incorrectly added. ANSWER: a Balance entered on side of account. ANSWER: b Amount incorrectly entered on trial balance. ANSWER: a Balance entered in wrong column or omitted. ANSWER: a Debit posted as credit, or vice versa. ANSWER: c