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Exam 2: Debits and Credits: Analyzing and Recording Business Transactions

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Question 81

True/False

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Accounts Payable increases on the credit side of the account.

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Question 82

Multiple Choice

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A credit to an asset account was posted to a liability account. This error would cause

A) assets to be understated.
B) liabilities to be overstated.
C) Capital to be understated.
D) None of the above are correct.

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Question 83

Multiple Choice

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The beginning balance in the Computers account was $2,500. The company purchased an additional $500 worth of computers. The balance in the account is

The entry to record Tom's payment of a home telephone bill is

What is X-cel Company's net income or net loss if it had Revenue of $1,800, Salary Expense of $500, Utility Expense of $250, and Withdrawals of $1,000 during October?

An account had a $500 credit starting balance. There were debit postings of $400 and credit postings of $150 during the month. The ending balance is

What would be the effect on accounts if the owner withdrew cash?

The trial balance is a financial statement.

A compound entry is when more than one transaction occurs.

Which of the following accounts would be increased by a debit?

Capital and Expenses are reported on the Statement of Owner's Equity.

Identify whether a debit or credit would be correct for each of the following account changes. Use a Dr. (debit) or Cr. (credit). ___Dr___ 0. Increase Cash ________ 1. Increase Equipment ________ 2. Decrease Accounts Receivable ________ 3. Decrease in Accounts Payable ________ 4. Increase in Salaries Expense ________ 5. Increase in Service Fees ________ 6. Decrease in Cash ________ 7. Increase J. Russell, Capital ________ 8. Increase J. Russell, Withdrawals ________ 9. Increase Rent Expense ________ 10. Decrease Equipment

Selected accounts from the ledger of Thomas Company appear below. For each account, indicate the following:

a. In the first column at right, indicate the type of each account using the following abbreviations:
Asset - A	Revenue - R	None of the above - N
Liability - L	Expense - E

b. In the second column, indicate the normal balance of the account by inserting a Dr. or Cr.
Account	Type of Account	Normal Balance
1. Office Supplies	________	________
2. Accounts Receivable	________	________
3. Fees Earned	________	________
4. Thomas, Withdrawals	________	________
5. Accounts Payable	________	________
6. Salaries Expense	________	________
7. Thomas, Capital	________	________
8. Accounts Receivable	________	________
9. Equipment	________	________
10. Telephone Expense	________	________

What device is used to record the increases and decreases caused by business transactions to individual assets, liabilities, and owner's equity?

Dennis, owner of Dennis' Golf Center, withdrew $700 in cash from the business. Record the transaction by

The following is a list of accounts and their balances for Myra's Company for the month ended May 31, 2020. Prepare a trial balance in good form. $\begin{array}{l l l l}\begin{array} { r r r r } \text {Cash} &\$1,380 &\text {Myra, Withdrawals} &\$980 \\\text {Accounts Payable} &500 &\text {Accounts Receivable} &1,030\\\text {Office Equipment} &2,260 &\text {Service Fees} &1,835\\\text {Myra, Capital} &3,965 &\text {Rent Expense} &650\\\end{array}\end{array}$

The left side of any account is the

Debits must always equal credits.

The owner invested personal equipment in the business. To record this transaction,

Determine the beginning owner's equity of a business having an ending owner's equity of $3,500, additional investments of $500 withdrawals of $400, and net loss of $750.