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Exam 2: The Accounting Cycle: During the Period

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Question 1

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Bostel wanted to expand the size of its warehouse in order to generate more profits.The company decided to purchase the building adjacent to its existing warehouse.The company pays for the building by borrowing from the bank.The purchase would be recorded as:

A) Debit Cash;credit Notes Payable.
B) Debit Buildings;credit Cash.
C) Debit Buildings;credit Notes Payable.

D) A) and C)
E) None of the above

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Question 2

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External events include all of the following except:

A) Paying rent.
B) Purchasing equipment.
C) Using office supplies.

D) B) and C)
E) All of the above

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Question 3

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The process of transferring the debit and credit information from the journal to individual accounts in the general ledger is called journalizing.The process is called posting.

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

The following amounts are reported in the ledger of Mariah Company: What is the balance in the Common Stock account? $\begin{array} { | l | r | } \hline \text { Assets } & \$ 80,000 \\\hline \text { Liabilities } & 36,000 \\\text { Retained Earnings } & 12,000 \\\hline\end{array}$

Revenues have what effect on the accounting equation?

A journal provides a chronological record of all transactions affecting a firm.

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

Assume that Sallisaw Sideboards,Inc.had a retained earnings balance of $10,000 on April 1,and that the company had the following transactions during April.Issued common stock for cash,$5,000.Provided services to customers on account,$2,000.Provided services to customers in exchange for cash,$900.Purchased equipment and paid cash,$4,300.Paid April rent,$800.Paid employees' salaries for April,$700.What was Sallisaw's retained earnings balance at the end of April?

A transaction is initially recorded in the general ______,and then subsequently posted to the general ______.

The Accounts Payable account has a beginning balance of $12,000 and the company purchased $50,000 of supplies on account during the month.The ending balance was $10,000.How much did the company pay to creditors during the month?

Consider the following list of accounts: Accounts Payable Cash Prepaid Rent Common Stock Salaries Payable Equipment Supplies Rent Expense How many of these accounts have a normal credit balance?

Which of the following is not part of measuring external transactions?

Liability accounts increase with a debit and decrease with a credit.Liability accounts increase with a credit and decrease with a debit.

A trial balance is a list of all accounts and their balances at a particular date,showing that assets equal liabilities.The trial balance shows that total debits equal total credits.

Which of the following would increase assets and increase liabilities?

Incurring an expense for advertising on account would be recorded by:

The Accounts Receivable account has a beginning balance of $10,000 and the company provides services of $50,000 on account during the month.The ending balance was $12,000.How much did the company receive from customers during the month?

Consider the following transactions: Issued common stock for cash.Purchased equipment by signing a note payable.Paid rent for the current month.Collected cash from customers on account.How many of these four transactions increased the given company's total assets?

On September 30,MFP Co.paid employee salaries of $7,000,including $1,000 it owed to its employees last month.What are the effects of this transaction on the accounting equation?