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Exam 2: Analyzing Transactions

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Question 41

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The normal balance of an expense account is a credit.

A) True
B) False

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Question 42

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Net income will result when

A) revenues (credits) > expenses (debits)
B) revenues (debits) > expenses (credits)
C) expenses (credits) = revenues (debits)
D) revenues (credits) = expenses (debits)

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

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Question 43

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When an account receivable is collected in cash, the total assets of the business increase.

The accounts in the ledger of Monroe Entertainment Co. are listed in alphabetical order. All accounts have normal balances. Prepare a trial balance. The total of the debits is

The double-entry accounting system records each transaction twice.

Which of the following accounts are debited to record increase in balances?

Which of the following entries records the receipt of cash for two months' rent? The cash was received in advance of providing the service.

On the chart of accounts, the balance sheet accounts are normally listed in the following order

Which of the following applications of the rules of debit and credit is true?

The erroneous moving of an entire number one or more spaces to the right or left, such as writing $85 as $850, is called a transposition.

Discuss and describe how errors in accounts can be found.

Which of the following describes the classification and normal balance of the fees earned account?

Even when a trial balance is in balance, there may be errors in the individual accounts.

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.

Unearned Revenues account is an example of a liability.

On November 10th, JumpStart Co. provides $2,900 in services to clients. At the time of service, the clients paid $600.00 in cash and put the balance on account. (a) Journalize this event. (b) On November 20th, JumpStart Co. clients paid an additional $900 on their accounts due. Journalize this event. (c) Calculate the amount of accounts receivable on November 30th.

Answer the following questions for each of the errors listed below, considered individually: Present your answers in columnar form, using the following headings: Errors:

All of the following occur with a double-entry accounting system except:

Debiting the cash account will increase the account.

The journal includes both debit and credit accounts for each transaction.