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Exam 2: The Accounting Cycle: During the Period

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Question 71

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A credit to an account balance always results in the balance decreasing.

A) True
B) False

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Question 72

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A company receives a $50,000 cash deposit from a customer on October 15 but will not provide services until November 20.Which of the following statements is true?

A) The company records service revenue on October 15.
B) The company records cash collection November 20.
C) The company records unearned revenue on October 15.
D) The company records nothing on October 15.

E) A) and D)
F) A) and C)

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Question 73

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Rite Shoes was involved in the transactions described below.Record each transaction.If an entry is not required,state "No Entry." (a)Purchased $8,200 of supplies on account. (b)Paid weekly salaries,$920. (c)Provide services to customers: Cash: $7,100;On account: $5,300. (d)Paid for supplies purchased in (a)above. (e)Placed an order for $6,200 of supplies.

Which of the following transactions would cause a decrease in both assets and stockholders' equity?

Listed below are ten terms followed by a list of phrases that describe or characterize five of the terms.Match each phrase with the best term by placing the letter designating the term in the space provided. -____ Asset and expense accounts normally have this type of balance.

Listed below are ten terms followed by a list of phrases that describe or characterize five of the terms.Match each phrase with the best term by placing the letter designating the term in the space provided. -____ Refers to the right side of an account.

Providing services on account would be recorded with a:

Which of the following is true about a "credit"? I.It is part of the double-entry procedure that keeps the accounting equation in balance. II) It represents a decrease to assets. III) It represents an increase to liabilities. IV) It is on the right side of a T-account.

Consider the following accounts: Utilities Expense Accounts Payable Service Revenue Common Stock How many of these accounts are increased with debits?

Pumpkin Inc.sold $500 in pumpkins to a customer on account on January 1.On January 11 Pumpkin collected the cash from that customer.What is the impact on Pumpkin's accounting equation from the collection of cash?

Daniel Dino Restaurant owes employee salaries of $15,000.This would be recorded as:

Incurring employees' salaries but not paying them causes no change to stockholders' equity.

Listed below are ten terms followed by a list of phrases that describe or characterize five of the terms.Match each phrase with the best term by placing the letter designating the term in the space provided. -____ Convention used to record transactions of a company.

Unearned Revenue is a liability account.

Providing services to customers for cash causes stockholders' equity to increase.

The Accounts Payable account has a beginning balance of $12,000 and the company purchased $50,000 of supplies on account during the month.The ending balance was $10,000.How much did the company pay to creditors during the month?

On March 3,Cobra Inc.purchased a desk for $450 on account.On March 22,Cobra purchased another desk for $500 also on account,and then on March 24,Cobra paid $400 on account.At the end of March,what amount should Cobra report for desks (assuming these two desks were the only desks they had) ?

Liability accounts increase with a credit and decrease with a debit.

A company incurs employee salaries of $4,200 but does not pay them.Record the transaction.

Finnish Motors has the following balance sheet accounts: Land $150,000 Equipment 90,000 Salaries Payable 12,000 Notes Payable 99,000 Supplies 10,000 Cash 25,000 Common Stock 40,000 Retained Earnings 100,000 Accounts Payable ? Prepaid Rent ? If the company has total liabilities and stockholders' equity of $290,000,what is the balance of the company's Prepaid Rent account?