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Exam 2: The Recording Process

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Question 101

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The explanation column of the general ledger

A) is completed without exception.
B) is nonexistent.
C) is used infrequently.
D) shows account titles.

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

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Question 102

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The process of entering an amount on the left side of an account is called ____________ the account, and making an entry on the right side is called _________________ the account.

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Question 103

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The account titles used in journalizing transactions need not be identical to the account titles in the ledger.

If a company has overdrawn its bank balance, then

The final step in the recording process is to

Another name for journal is

A general ledger should be arranged in the order in which accounts are presented in the financial statements, beginning with the balance sheet accounts.

At September 1, 2010, Crews Co. reported owner's equity of $136,000. During the month, Crews generated revenues of $20,000, incurred expenses of $12,000, purchased equipment for $5,000 and withdrew cash of $2,000. What is the amount of owner's equity at September 30, 2010?

Prepare a trial balance from the ledger accounts of Attica Company as of January 31, 2010.

The trial balance will not balance when incorrect account titles are used in journalizing or posting.

Your roommate, a marketing major, thinks that debit means decrease and credit means increase. And, that every account can be debited and credited and as result, every account can have both a debit and a credit balance. Explain to your roommate (1) the meaning of debit and credit; (2) which accounts can only be debited, which can only be credited, and which can be both debited and credited; and (3) which accounts normally have debit balances and which credit balances.

For each transaction given, enter in the tabulation given below a "D" for debit and a "C" for credit to reflect the increases and decreases of the assets, liabilities, and owner's equity accounts. In some cases there may be a "D" and a "C" in the same box. Transactions: 1. Owner invests cash in the business. 2. Pays insurance in advance for six months. 3. Pays secretary's salary. 4. Purchases office supplies on account. 5. Pays electricity bill. 6. Borrows money from local bank. 7. Makes payment on account. 8. Receives cash due from customers. 9. Provides services on account. 10. Owner withdraws assets from the business.