Question 1

Barnes Company showed the following balances at the end of its first year: $\begin{array}{lr}
\text { Cash } & \$ 14,000 \
\text { Prepaid insurance } & 700 \
\text { Accounts receivable } & 3,500 \
\text { Accounts payable } & 2,800 \
\text { Notes payable } & 4,200 \
\text { Common stock } & 5,400 \
\text { Dividends } & 700 \
\text { Revenues } & 24,000 \
\text { Expenses } & 17,500
\end{array}$ Mc. 141 (count) What did Barnes Company show as total credits on its trial balance?

Accepted Answer

The answer of Barnes Company showed the following balances at...

Question 2

The first step in the recording process is to

Accepted Answer

Before recording a transaction, it is important to analyze the effect it will have on the accounts involved. This helps ensure that the transaction is recorded accurately and in the appropriate accounts. The other options listed come later in the recording process.

Question 3

The usual sequence of steps in the transaction recording process is

Accepted Answer

The answer of The usual sequence of steps in the...

Question 4

During 2014, its first year of operations, Jane's Bakery had revenues of $65,000 and expenses of $33,000. The business paid cash dividends of $18,000. What is the balance in Retained Earnings at December 31, 2014?

Accepted Answer

Retained Earnings = Revenues - Expenses - Dividends = $65,000 - $33,000 - $18,000 = $14,000 credit.

Question 5

At October 1, 2014, Metz Industries had an Accounts Payable balance of $70,000. During the month, the company made purchases on account of $50,000 and made payments on account of $80,000. At October 31, 2014, the Accounts Payable balance is

Accepted Answer

The beginning balance was $70,000. Purchases increased the balance by $50,000, and payments decreased it by $80,000. Thus, the ending balance is $70,000 + $50,000 - $80,000 = $40,000 credit.

Question 6

At September 1, 2014, Kern Enterprises reported a cash balance of $70,000. During the month, Kern collected cash of $30,000 and made disbursements of $50,000. At September 30, 2014, the cash balance is

Accepted Answer

The cash balance at the end of September is calculated by taking the beginning balance of $70,000, adding the cash collected of $30,000, and subtracting the disbursements of $50,000, resulting in a $50,000 debit balance.

Question 7

Which of the following accounts has a normal credit balance?

Accepted Answer

The answer of Which of the following accounts has a...

Question 8

During February 2014, its first month of operations, the owner of Schwenn Enterprises invested cash of $40,000. Schwenn had cash sales of $8,000 and paid expenses of $14,000. Assuming no other transactions impacted the cash account, what is the balance in Cash at February 28?

Accepted Answer

The cash balance is calculated as the beginning cash balance plus cash receipts minus cash payments. The beginning cash balance is $40,000, cash receipts are $8,000, and cash payments are $14,000. Therefore, the cash balance at February 28 is $40,000 + $8,000 - $14,000 = $34,000.

Question 9

During January 2014, its first month of operation, Osborn Enterprises earned net income of $1,700 and paid dividends to the owners of $500. At January 31, the balance in Retained Earnings will be

Accepted Answer

Retained Earnings is calculated as net income minus dividends. Therefore, $1,700 (net income) - $500 (dividends) = $1,200 credit balance in Retained Earnings.

Question 10

At January 1, 2014, Troyer Industries reported Retained Earnings of $280,000. During 2014, Troyer had a net loss of $60,000 and paid dividends to the stockholders of $40,000. At December 31, 2014, the balance in Retained Earnings is

Accepted Answer

The retained earnings at the end of the year is calculated as the beginning retained earnings minus the net loss and dividends paid: $280,000 - $60,000 - $40,000 = $180,000.

Question 11

Winrow Company showed the following balances at the end of its first year: $$\begin{array} { l r } 
\text { Cash } & \$ 11,000 \
\text { Prepaid insurance } & 500 \
\text { Accounts receivable } & 2,500 \
\text { Accounts payable } & 2,000 \
\text { Notes payable } & 3,000 \
\text { Common stock } & 5,000 \
\text { Dividends } & 500 \
\text { Revenues } & 17,000 \
\text { Expenses } & 12,500
\end{array}$$ What did Winrow Company show as total credits on its trial balance?

Accepted Answer

The answer of Winrow Company showed the following balances at...

Question 12

At September 1, 2014, Baxter Inc. reported Retained Earnings of $282,000. During the month, Baxter generated revenues of $40,000, incurred expenses of $24,000, purchased equipment for $10,000 and paid dividends of $4,000. What is the balance in Retained Earnings at September 30, 2014?

Accepted Answer

The answer of At September 1, 2014, Baxter Inc. reported...

Question 13

In recording accounting transactions, evidence that a transaction has taken place is obtained from

Accepted Answer

Source documents are the original documents that provide evidence to support accounting transactions. Examples include invoices, receipts, bank statements, and contracts. The Internal Revenue Service, public relations department, and Securities and Exchange Commission may provide information related to accounting transactions, but they are not the primary source of evidence for those transactions.

Question 14

After a business transaction has been analyzed and entered in the book of original entry, the next step in the recording process is to transfer the information to

Accepted Answer

The information from the book of original entry needs to be transferred to the appropriate ledger accounts in order to have an accurate record of the company's financial transactions. This is called posting and ensures that the financial statements are accurate. The other options are not correct as they do not represent the next step in the recording process.

Question 15

At December 1, 2014, Orear Company's Accounts Receivable balance was $5,600. During December, Orear had credit sales of $15,000 and collected accounts receivable of $12,000. At December 31, 2014, the Accounts Receivable balance is

Accepted Answer

The ending Accounts Receivable balance is calculated as the beginning balance ($5,600) plus credit sales ($15,000) minus collections ($12,000), resulting in $8,600 debit.

Question 16

During January 2014, Carey Services Inc. paid a cash dividends of $2,000. This transaction

Accepted Answer

Paying cash dividends reduces stockholders' equity because dividends are distributions of earnings to shareholders, decreasing retained earnings.

Question 17

On June 1, 2014, England Inc. reported a cash balance of $21,000. During June, England made deposits of $8,000 and made disbursements totaling $24,000. What is the cash balance at the end of June?

Accepted Answer

The cash balance at the end of June is calculated by taking the initial balance, adding deposits, and subtracting disbursements: $21,000 + $8,000 - $24,000 = $5,000 debit balance.

Question 18

At January 31, 2014, the balance in Goebel Inc.'s supplies account was $700. During February. Goebel purchased supplies of $600 and used supplies of $800. At the end of February, the balance in the Supplies account should be

Accepted Answer

The balance at the end of February is calculated as the beginning balance ($700) plus purchases ($600) minus used supplies ($800), resulting in a $500 debit balance.

Question 19

Which of the following accounts has a normal debit balance?

Accepted Answer

Prepaid Rent is an asset account, and asset accounts have normal debit balances. Accounts Payable, Retained Earnings, and Common Stock are all equity or liability accounts, and these accounts have normal credit balances.

Question 20

All of the following statements regarding the double-entry system are true except

Accepted Answer

The answer of All of the following statements regarding the...

Quiz 3: The Accounting Information System