Generally Accepted Accounting Principles and Cash
1. The following transactions have been journalized and posted to the proper accounts.
1. Mark Call invested $7,000 cash in his new design services business.
2. The business paid the first month's rent with $700 cash.
3. The business purchased equipment by paying $2,000 down and executing a note payable for $4,500.
4. The business purchased supplies for $850 cash.
5. The business billed its clients a total of $4,000 for design services rendered.
6. The business collected $3,000 on account from one of its clients.
What is the total amount of assets after all the above transactions have been completed?
Answer: $14,800
2. An adjusting entry that debits Accounts receivable is an example of a(n):
Answer: accrued revenue. 3. Which of the following is NOT an example of a source document?
Answer: Journal 4. ABC Services reported the following transactions for September, 2013.
A) The owner opened the business with a capital contribution of $23,500 cash. It was credited to Capital.
B) The business purchased office equipment for $11,500. The business paid $2,500 cash down and put the balance on a note payable.
C) The business paid insurance expense of $1,350 cash.
D) The business paid a utility bill for $980 cash.
E) The business paid $2,000 cash for September rent.
F) The business had sales of $12,000 in September. Of these sales, 60% were cash sales, and the balance was credit sales.
G) The business paid $9,700 cash for office furniture.
What are the total liabilities at the end of September, 2013?
Answer: $9,000 5. The accountant for Hobson Electrical Repair Company failed to make an adjusting entry to record $5,000 of unpaid salaries for the last two weeks of the year. Which of the following is TRUE? Answer: Total expenses are understated.
6. Employees of Robert Rogers, CPA worked during the last two weeks of December. They received their
1. Mark Call invested $7,000 cash in his new design services business.
2. The business paid the first month's rent with $700 cash.
3. The business purchased equipment by paying $2,000 down and executing a note payable for $4,500.
4. The business purchased supplies for $850 cash.
5. The business billed its clients a total of $4,000 for design services rendered.
6. The business collected $3,000 on account from one of its clients.
What is the total amount of assets after all the above transactions have been completed?
Answer: $14,800
2. An adjusting entry that debits Accounts receivable is an example of a(n):
Answer: accrued revenue. 3. Which of the following is NOT an example of a source document?
Answer: Journal 4. ABC Services reported the following transactions for September, 2013.
A) The owner opened the business with a capital contribution of $23,500 cash. It was credited to Capital.
B) The business purchased office equipment for $11,500. The business paid $2,500 cash down and put the balance on a note payable.
C) The business paid insurance expense of $1,350 cash.
D) The business paid a utility bill for $980 cash.
E) The business paid $2,000 cash for September rent.
F) The business had sales of $12,000 in September. Of these sales, 60% were cash sales, and the balance was credit sales.
G) The business paid $9,700 cash for office furniture.
What are the total liabilities at the end of September, 2013?
Answer: $9,000 5. The accountant for Hobson Electrical Repair Company failed to make an adjusting entry to record $5,000 of unpaid salaries for the last two weeks of the year. Which of the following is TRUE? Answer: Total expenses are understated.
6. Employees of Robert Rogers, CPA worked during the last two weeks of December. They received their