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Exam 2: Analyzing Transactions

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Question 61

True/False

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The double-entry accounting system records each transaction twice.

A) True
B) False

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Question 62

Multiple Choice

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A patient has a physical examination and asks the bookkeeper to mail the bill.The bookkeeper should

A) make no entry until the cash is received
B) Cash,debit;Accounts Receivable,credit
C) Cash,debit;Fees Earned,credit
D) Accounts Receivable,debit;Fees Earned,credit

E) None of the above
F) A) and B)

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Question 63

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Which of the following stockholder equity accounts follow the same debit and credit rules as liabilities?

Journal entries can have more than two accounts as long as the debits equal the credits.

For a month's transactions for a typical medium-sized business,the accounts payable account is likely to have only credit entries.

An account is said to have a debit balance if

Assets are increased with debits and decreased with credits.

Consuming goods and services in the process of generating revenues results in expenses.

Which of the following entries records the cash sale of capital stock to stockholders?

On January 1,2011,Cary Parsons established Cary's Catering Service.Listed below are accounts to use for transactions (a)through (d),each identified by a number.Following this list are the transactions that occurred during the first month of operations.You are to indicate for each transaction the accounts that should be debited and credited by placing the account number(s)in the appropriate box.

In which order are the accounts listed in the chart of accounts?

The right hand side of a T account is known as a debit and the left hand side is known as a credit.

All nine transactions for Dalton Survey Company for September,the first month of operations,are recorded in the following T accounts: Indicate the following for each debit and each credit: Present your answers in the following form:

To determine the balance in a prepaid expense account,subtract credits from debits.

Revenues are equal to the difference between cash receipts and cash payments.

Expense accounts are increased by credits.

McMann Company has a condensed income statement as shown:: $\begin{array}{|l|l|l|}\hline & \mathbf{2 0 1 4} & 2013 \\\hline \text { Sales } & \$ 150,000 & \$ 165,500 \\\hline \text { Total operating expenses } & 133,000 & 147,500 \\\hline \text { Net income } & 17,000 & 18,000 \\\hline\end{array}$ Using horizontal analysis,calculate the amount and percent change for Sales.Round to one decimal place.

Which side of the account increases a cash account?

The normal balance of a capital stock account is a debit.