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    denali9696's Avatar
    denali9696 Posts: 9, Reputation: 0
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    #1

    Apr 13, 2008, 02:14 PM
    Accounting entries and meanings
    Hello All,

    I would like to request help in the following questions listed bellow. I think they are correct, but I'm not sure. If someone would please take a few minutes to look at them and let me know if I am on the right track, and on the ones that are not correct, how to determine the correct answer. Any assistance given is greatly appreciated. Thank you all in advance.

    1. A debit is:
    A) An increase in an account.
    B) The right-hand side of a T-account.
    C) A decrease in an account.
    D) The left-hand side of a T-account. (Answer)
    E) An increase to a liability account.

    2. Of the following accounts, the one that normally has a credit balance is:
    A) Cash.
    B) Office Equipment.
    C) Sales Salaries Payable. (Answer)
    D) Owner, Withdrawals.
    E) Sales Salaries Expense.

    3. If assets are $99,000 and liabilities are $32,000, then equity equals:
    A) $ 32,000.
    B) $ 67,000. (Answer)
    C) $ 99,000.
    D) $131,000.
    E) $198,000.

    4. Internal users of accounting information include:
    A) Shareholders.
    B) Managers. (Answer)
    C) Lenders.
    D) Suppliers.
    E) Customers.

    5. If equity is $300,000 and liabilities are $192,000, then assets equal:
    A) $108,000.
    B) $192,000.
    C) $300,000.
    D) $492,000. (Answer)
    E) $792,000.

    6. An account used to record the owner's investments in the business is called a(n):
    A) Withdrawals account.
    B) Capital account. (Answer)
    C) Revenue account.
    D) Expense account.
    E) Liability account.

    7. Rocky Industries received its telephone bill in the amount of $300, and immediately paid it. Rocky's general journal entry to record this transaction will include a
    A) Debit to Telephone Expense for $300. (Answer)
    B) Credit to Accounts Payable for $300. (Answer)
    C) Debit to Cash for $300.
    D) Credit to Telephone Expense for $300.
    E) Debit to Accounts Payable for $300.

    8. Wisconsin Rentals purchased office supplies on credit. The general journal entry made by Wisconsin Rentals will include a:
    A) Debit to Accounts Payable.
    B) Debit to Accounts Receivable.
    C) Credit to Cash.
    D) Credit to Accounts Payable. (Answer)
    E) Credit to Wisconsin Rentals, Capital.

    9. A debit is:
    A) An increase in an account.
    B) The right-hand side of a T-account.
    C) A decrease in an account.
    D) The left-hand side of a T-account. (Answer)
    E) An increase to a liability account.

    PLEASE SKIP NUMBER TEN
    10. Robert Haddon contributed $70,000 in cash and some land worth $130,000 to open a new business, RH Consulting. Which of the following general journal entries will RH Consulting make to record this transaction?
    A)

    B)

    C)

    D)

    E)
    Robert Haddon, Capital 200,000
    Assets $200,000


    11. If Tim Jones, the owner of Jones Hardware proprietorship, uses cash of the business to purchase a family automobile, the business should record this use of cash with an entry to:
    A) Debit Salary Expense and credit Cash.
    B) Debit Tim Jones, Salary and credit Cash.
    C) Debit Cash and credit Tim Jones, Withdrawals.
    D) Debit Tim Jones, Withdrawals and credit Cash.
    E) Debit Automobiles and credit Cash.

    I don’t know this answer

    12. Creditors' claims on the assets of a company are called:
    A) Net losses.
    B) Expenses.
    C) Revenues.
    D) Equity.
    E) Liabilities. (Answer)




    13. The description of the relation between a company's assets, liabilities, and equity, which is expressed as Assets = Liabilities + Equity, is known as the:
    A) Income statement equation.
    B) Accounting equation. (Answer)
    C) Business equation.
    D) Return on equity ratio.
    E) Net income.

    14. A report that lists accounts and their balances, in which the total debit balances should equal the total credit balances, is called a(n):
    A) Account balance.
    B) Trial balance. (Answer)
    C) Ledger.
    D) Chart of accounts.
    E) General Journal.

    15. Internal users of accounting information include:
    A) Shareholders.
    B) Managers. (Answer)
    C) Lenders.
    D) Suppliers.
    E) Customers.

    16. The difference between a company's assets and its liabilities, or net assets is:
    A) Net income. (Answer)
    B) Expense.
    C) Equity.
    D) Revenue.
    E) Net loss.

    17. A balance sheet lists:
    A) The types and amounts of the revenues and expenses of a business.
    B) Only the information about what happened to equity during a time.
    C) The types and amounts of assets, liabilities, and equity of a business as of a specific date. (Answer)
    D) The inflows and outflows of cash during the period.
    E) The assets and liabilities of a company but not the owner's equity.

    18. The record in which transactions are first recorded is the:
    A) Account balance.
    B) Ledger.
    C) Journal. (Answer)
    D) Trial balance.
    E) Cash account.

    19-30 Leonard Matson completed these transactions during December of the current year. Write the journal entry for each transaction.

    (Skip question 19-30)
    CaptainForest's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
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    #2

    Apr 13, 2008, 06:12 PM
    1) Correct
    2) Correct
    3) Correct
    4) Correct
    5) Correct
    6) Correct

    7) Just answer A. The JE would be: Dr. Telephone Expense 300, Cr. Cash 300. Since they paid it right away, no AP account would have been set up.

    8) Correct
    9) Correct (but isn't this the same question as question 1?)

    11) Answer D……The car is NOT for business, rather personal. So Tim took the money for his own personal use. Therefore, Dr. Withdrawals, Cr. Cash

    12) Correct
    13) Correct
    14) Correct
    15) Correct

    16) Answer C. The difference between Assets and Liabilities is Equity. Think of the accounting equation…assets = liabilities + equity…to rearrange that equation, it can be written as assets – liabilities = equity

    17) Correct
    18) Correct
    jkhartm's Avatar
    jkhartm Posts: 1, Reputation: 1
    New Member
     
    #3

    Apr 15, 2008, 05:51 AM
    Is there a circumstance when income is deferred and treated as an asset?

    I am looking at financial statements for a small college that has deferred income as a liability for fees received in advance for services not yet rendered, and could therefore, have to be returned.

    Thank you.
    CaptainForest's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
    Ultra Member
     
    #4

    Apr 15, 2008, 01:28 PM
    Quote Originally Posted by jkhartm
    Is there a circumstance when income is deferred and treated as an asset?

    I am looking at financial statements for a small college that has deferred income as a liability for fees received in advance for services not yet rendered, and could therefore, have to be returned.

    Thank you.
    Yeah, that is unearned revenue. (regarding the income treated as a liability)

    When someone pays you in advance, and you have not earned the revenue yet, but have received the cash upfront.
    bahan's Avatar
    bahan Posts: 5, Reputation: 1
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    #5

    Jun 19, 2008, 05:50 AM
    Nice questions
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
    Uber Member
     
    #6

    Jun 19, 2008, 08:19 PM
    Is there a circumstance when income is deferred and treated as an asset?
    The answer to that specific part of the question is no.

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