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Exam 3: Processing Accounting Information

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Question 41

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Described below are several transactions that an organization like the Hummingbird Co.might record.Several accounts from the organization's financial statements also are listed below.Using these account titles,record each transaction in proper journal entry format in the general journal provided.A written explanation for each journal entry is not required. ? $\begin{array} { l l } \text { Accounts: } \\\text { Cash } & \text { Common Stock } \\\text { Accounts Receivable } & \text { Sales Revenue } \\\text { Musical Instruments } & \text { Selling Expenses } \\& \text { General \& Administrative Salaries } \\\text { Accounts Payable } & \text { Expense }\\\text { Deposits Received in Advance }\end{array}$ ? A) Customers are mailed bills for tickets, $\$ 225,000$ . B) Customers pay for tickets in advance, $\$ 130,000$ . C) Administrative employees are paid their monthly sal aries, $\$ 14,000$ . D) An invoice is received for new musical instruments purchased, $\$ 15,200$ ; payment is due in 30 days. E) Payments received from customers for amounts billed in a previous transaction amount to $\$ 135,000$ . F) Payment is made for the instruments invoice received in a previous transaction. ?

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Question 42

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Services are provided for customers who are sent bills for the amount they owe.For this transaction,identify the effect on the accounting equation.

A) Assets increase and liabilities increase.
B) Assets increase and stockholders' equity increases.
C) Liabilities increase and stockholders' equity decreases.
D) Liabilities decrease and assets decrease.

E) B) and D)
F) C) and D)

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Question 43

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The correct term for the process of recording the economic effects of business transactions in a book of original entry is

Which of the following would be a case where an event as a transaction is not supported by a source document?

The payment of wages to employees is an internal event.

Blake and Ryan each invest $30,000 in a business and are given shares of stock in Jones Industries as evidence of their ownership interests.For this transaction,identify the effect on the accounting equation.

Which of the following transactions does not affect the total assets of Vertican Sailing Corp.?

Dividends are a determinant of net income.

A trial balance can be distributed to stockholders in place of the balance sheet.

Several terms that represent components of a bookkeeping system are listed below.For each term,write a brief explanation of how that component is used in a bookkeeping system.Space is provided for your answer immediately below each term. A) Accounts B) Chart of accounts C) Double-entry system with debits and credits D) General journal E) General ledger F) Trial balance

Rise Corp.received payment from its customers for previous sales on credit.What was the impact on its working capital?

The issuance of common stock increases both ____________________ and stockholders' equity.

A company's chart of accounts will reflect the nature of its business.

All transactions refer to external events.

When making a general journal entry,there can only be one debit and one credit.

A trial balance that balances provides proof that all transactions were correctly journalized and posted to the ledger.

Presented below are a list of source documents and a list of transactions.indicate next to each transaction which source document serves as evidence for the recording of the transaction

Which pair of accounts has the same set of rules for debit and credit entries?

XYZ Corp.made cash sales to customers.What effect does this transaction have on the accounting equation?

Wolfe Inc. Wolfe Inc.reports these account balances at January 1,2017: ? $\begin{array} { l r } \text { Retained Earnings } & \$ 49,000 \\\text { Accounts Receivable } & 20,000 \\\text { Accounts Payable } & 24,000 \\\text { Capital Stock } & 185,000 \\\text { Land } & 153,000 \\\text { Cash } & 13,000 \\\text { Equipment } & 20,000 \\\text { Notes Payable } & 28,000 \\\text { Buildings } & 80,000\end{array}$ ? -See the account balances for Wolfe Inc. ? In Wolfe's trial balance prepared on January 1,2017,the total of the credit column is