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Exam 2: The Accounting Cycle: During the Period

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Question 1

Multiple Choice

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Sooner purchased office supplies on account.The transaction would be recorded as:

A) Debit Supplies,Credit Cash
B) Debit Cash,Credit Accounts Payable
C) Debit Accounts Payable,Credit Supplies
D) Debit Supplies,Credit Accounts Payable

E) A) and B)
F) B) and C)

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Question 2

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Purchasing office supplies on account causes assets to increase and liabilities to increase.

A) True
B) False

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Question 3

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Consider the following list of accounts: Cash Retained Earnings Service Revenue Utilities Expense Salaries Expense Accounts Receivable Accounts Payable Common Stock Equipment Dividends How many of these accounts have a normal debit balance?

Purchasing supplies for cash has what effect on the accounting equation?

When a company provides services on account,the accounting equation would be affected as follows:

Providing services and receiving cash will:

Record the following transactions.If an entry is not required,state "No Entry." (a)Started business by issuing 10,000 shares of common stock for $20,000. (b)Hired Rebecca as an administrative assistant,promising to pay her $2,000 every two weeks. (c)Rented a building for three years at $500 per month and paid six months' rent in advance. (d)Purchased equipment for $5,400 cash. (e)Purchased $1,800 of supplies on account. (f)Provided services to customers for $7,800 cash. (g)Paid employee salaries,$5,200. (h)Paid for supplies purchased in item (e). (i)Paid $800 for current advertising in a local newspaper. (j)Paid utility bill of $1,300 for the current month.

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

Jerome purchased a building for his business by signing a note to be repaid over the next ten years.Which of the following correctly describes how to record this transaction?

When the company pays stockholders a dividend,what is the effect on the accounting equation for that company?

If the liabilities of a company increased by $55,000 during a month and the stockholders' equity decreased by $21,000 during that same month,did assets increase or decrease and by how much?

Selling common stock for cash is recorded with a debit to common stock.

Receiving cash from an account receivable:

External transactions are transactions the firm conducts with a separate economic entity,such as selling products to a customer,purchasing supplies from a vendor,paying salaries to an employee,and borrowing money from a bank.

A debit to an account balance always results in the balance increasing.

Clement Company paid an account payable related to a previous utility bill of $1,000.This transaction should be recorded as follows on the payment date:

The owner of an office building should report rent collected in advance as a debit to Cash and a credit to:

Summer Leasing received $12,000 for 24 months rent in advance.How should Summer record this transaction?

On January 1,Brad Inc.sold $30,000 in products to a customer on account.Then on January 10,Brad collected the cash on that account.What is the impact on Brad's accounting equation from the collection of cash on January 10?

Which of the following accounts would normally have a credit balance?