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Exam 13: The Double-Entry Accounting System

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Question 21

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A company's adjusted trial balance provides the information needed to prepare the balance sheet and income statement.

A) True
B) False

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Question 22

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Warren Company began the accounting period with a $48,000 debit balance in its accounts receivable account. During the accounting period, the company recorded revenue on account amounting to $108,000. The accounts receivable account at the end of the accounting period contained a $24,000 debit balance. Based on this information, what isthe amount of cash collected from customers during the period?

A) $90,000
B) $120,000
C) $132,000
D) $36,000

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

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Question 23

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To record an asset source transaction, an asset account would be debited and a liability or stockholders' equityaccount credited.

A transaction has been recorded in the T-accounts of Gibbs Company as follows: Which of the following could be an explanation for this transaction?

Indicate how each event affects the financial statements. Use the following letters to record your answer in the box shown below. If an event increases one account and decreases another account equally within the same element, record I/D. If an event has no impact on the element, record NA. You do not need to enter amounts. Increase = I Decrease = DNot Affected = NA A transaction recorded as a debit to Land and a credit to Cash.

The three primary asset use transactions are incurring expenses, accruing liabilities, and paying dividends.

An increase to a liability account is recorded with a debit entry.

What is the term used to describe the left side of a T-account?

Many companies choose to end their fiscal years during a part of the year when they expect low activity.

What effect do credits have on asset accounts? On stockholders' equity accounts?

Abbott Company purchased $7,600 of merchandise inventory on account. Which of the following entries would be required to record this transaction?

Explain how the following general journal entry affects the accounting equation.

The trial balance of Barger Company at the end of the accounting period, immediately prior to recording closing entries, showed the following: What will the balance of the retained earnings account be after the closing entries are recorded?

For each of the following journal entries, describe the event or adjustment that would have prompted the entry. The first has been completed for you as an example.

What are the meanings of the terms "debit" and "credit" and what are the effects of each on the various types of accounts?

Indicate how each event affects the financial statements. Use the following letters to record your answer in the box shown below. If an event increases one account and decreases another account equally within the same element, record I/D. If an event has no impact on the element, record NA. You do not need to enter amounts. Increase = I Decrease = DNot Affected = NA A transaction recorded as a debit to Cash and a credit to Accounts Receivable.

Valley Packaging Company's adjusted trial balance showed a zero balance in retained earnings. Which of the following is the most likely explanation for this?

Indicate how each event affects the financial statements. Use the following letters to record your answer in the box shown below. If an event increases one account and decreases another account equally within the same element, record I/D. If an event has no impact on the element, record NA. You do not need to enter amounts. Increase = I Decrease = DNot Affected = NA A transaction recorded as a debit to Office Supplies and a credit to Accounts Payable.

The following is a list of adjusted account balances for Giddeon Company as of December 31, Year 1: Required:a)Prepare an adjusted trial balance.b)Prepare an income statement and balance sheet using those adjusted account balances.

The general journal is a list of a business's accounts and their account numbers.