2.01-Apply procedures to prepare and post journal entries for a sole
proprietorship.
Textbook Chapters: 3 & 4
I.
II.
III.
IV.
II.
Recording Journal Entries for a Sole Proprietorship
A. A journal will be used to record all transactions in this accounting cycle.
B. Source documents will be used to document these transactions.
C. Transactions will be recorded by date.
Correcting Errors While Recording Transactions in the General Journal – Standard Accounting
Practices
A. Errors should be corrected so there is no doubt as to what the correct entry should have
been.
B. If one item in the entry is incorrect, draw a line through the incorrect item and write the
correct item above the line.
C. If the entire entry is incorrect, draw a line through the entire entry and then record the
correct entry on the blank journal lines immediately below the incorrect entry.
D. If there are correct entries already recorded below the incorrect entry, draw lines through all
the incorrect items and record the correct information directly above the line.
Posting From a Journal to the General Ledger
A. Posting is the transferring of information from a journal entry to a ledger account. It is used
to summarize and show in one place all the changes made to a single account.
B. Correcting Entries are used when a journal entry has a mistake and has already been
posted. The source document for a correcting entry is a memorandum. A new journal entry
is made to reverse the original entry for the account(s) in error and to enter the correct
account(s) and amount. This new journal entry must then be posted.
C. Proving Cash is the process of determining that the amount of available cash agrees with
the balance of the cash account. Cash can be proved at any time by comparing the cash
balance in the checkbook to the balance in the cash account. If the balances agree, then
cash is proved.
Procedure for Journalizing Transactions
A. Analyze the transaction. Identify the accounts affected, classify the accounts affected, and
determine how each account increases or decreases.
B. Determine which account is debited and which account is credited and the dollar amount of
this transaction.
C. Draw a T-account and record the debit(s) and credit(s).
D. Journalize the transaction.
1. Record the date in the Date column.
2. Record the name of the account to be debited in the Account Title column.
3. Record the debit amount in the Debit column on the same line as the account title.
4. On the next line, record the name of the account to be credited in the Account Title
column.
5. Record the credit amount in the Credit column on the same line as the account title.
6. Record the source document in the Document Number column.
Procedure for Posting From a Journal to the General Ledger
A. Write the date of the journal entry in the Date column of the account.
B. Write the journal page number in the post reference column of the account.
C. Write the debit amount or the credit amount (whichever applies to this account) under the
appropriate column (Debit or Credit) of the account.
D. Write the new account balance in the appropriate amount column (Balance Debit or Balance
Credit).
E. Return to the journal. In the Post Reference column of the journal record the account
number of the account to which the entry was posted.
III.
Procedures for Posting From a Multicolumn Journal to the General Ledger
A. Posting the total of the Sales Credit column
1. Write the date in the Date column of the ledger account Sales.
2. Write the journal page number in the Post. Ref. column of the account.
3. Write the column total from the journal in the Credit column of the account.
4. Write the new balance in the Balance Credit column of the account.
5. Return to the journal and write the Sales account number (410) in parentheses below the
Sales Credit column total.
B. Posting the total of the Cash Debit column
1. Write the date in the Date column of the ledger account Cash.
2. Write the journal page number in the Post. Ref. column of the account.
3. Write the column total from the journal in the Debit column of the account.
4. Write the new account balance in the Balance Debit column of the account.
5. Return to the journal and write the Cash account number (110) in parentheses below the
Cash Debit column total.
C. Posting the total of the Cash Credit column
1. Write the date in the Date column of the ledger account Cash.
2. Write the journal page number in the Post. Ref. column of the account.
3. Write the column total from the journal in the Credit column of the account.
4. Write the new account balance in the Balance Debit column of the account.
5. Return to the journal and write the Cash account number (110) in parentheses below the
Cash Credit column total.
KEY TERMS






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
Ledger
General ledger
Account number
File maintenance
Opening an account
Posting
Correcting entry
Proving cash
2.01 Sample Questions
1.
What is the correct journal entry for the
transaction, PAID CASH FOR PRINTER
CARTRIDGES?
A.
Debit Owner's drawing and credit
Cash
B.
Debit Cash and credit Owner's
Capital
C.
Debit Supplies and credit Cash
D.
Debit Miscellaneous Expense
and credit Cash
2.
What is the correct journal entry for the
transaction PAID CASH FOR
MISCELLANEOUS EXPENSE, $400?
A.
Debit Cash and credit
Miscellaneous Expense
B.
Debit Cash and debit
Miscellaneous Expense
C.
Debit Miscellaneous Expense
and credit Cash
D.
Debit Supplies and credit
Miscellaneous Expense
3.
What is the correct journal entry for the
transaction PAID CASH FOR A DELIVERY
(MISCELLANEOUS EXPENSE), $25?
A.
Debit Supplies and credit
Miscellaneous Expense
B.
Debit Miscellaneous Expense
and credit Cash
C.
Debit Cash and credit
Miscellaneous Expense
D.
Debit Cash and credit Truck
Expense
4.
What is the correct entry for the
transaction, PAID $150 FOR ADVERTISING?
A.
Credit Cash and credit
Advertising Expense
B.
Debit Advertising Expense and
credit Cash
C.
Debit Cash and credit Advertising
Expense
D.
Debit Cash and credit
Miscellaneous Expense
5.
What is the correct entry for the
transaction, PAID CASH FOR NEWSPAPER
ADVERTISEMENT, $200?
A.
Debit Cash and credit Advertising
Expense
B.
Debit Cash and credit
Miscellaneous Expense
C.
Credit Cash and credit
Advertising Expense
D.
Debit Advertising Expense and
credit Cash
6.
What is the correct journal entry for the
transaction, PAID CASH TO JOHN SMITH,
OWNER FOR PERSONAL USE, $500?
A.
Debit Cash and credit John
Smith, Capital
B.
Debit Cash and credit John
Smith, Drawing
C.
Debit John Smith, Capital, and
credit Cash
D.
Debit John Smith, Drawing and
credit Cash
7.
What is the correct journal entry for the
transaction, PAID CASH TO MARK
JOHNSON, OWNER FOR PERSONAL USE,
$900?
A.
Debit Cash and credit Mark
Johnson, Capital
B.
Debit Cash and credit Mark
Johnson, Drawing
C.
Debit Mark Johnson, Capital, and
credit Cash
D.
Debit Mark Johnson, Drawing
and credit Cash
8.
A journal's column totals are General
Debit, $500; General Credit, $200; Sales
Credit, $750; Cash Debit, $1,000; Cash Credit,
$600. This means that the:
A.
Cash debit column is incorrect.
B.
General credit column is
incorrect.
C.
Journal does not prove.
D.
Journal proves.
9.
A journal's column totals are General
Debit, $500; General Credit, $200; Sales
Credit, $350; Cash Debit, $1,000; Cash Credit,
$950. This means that the:
A.
Cash debit column is incorrect.
B.
General credit column is
incorrect.
C.
Journal does not prove.
D.
Journal proves.
10.
William has almost finished updating the
Supplies account at the end of the month. He
has transferred all of the information in the
General Journal to the General Ledger. What
is the LAST step for William to do?
A.
Balancing the journal.
B.
Proving cash.
C.
Record a new account balance.
D.
Record an account number in the
journal.
11.
Mike is posting journal entries to the
General Ledger. He has just calculated the
new account balance in the credit column for
Sales. What is the NEXT step in the posting
procedure?
A.
Write the account number
B.
Record the account number that
the entry was posted to in the journal in
the post reference column.
C.
Write the debit amount
D.
Record the source document in
the Document Number Column.
2.02--Apply procedures to prepare financial statements for a sole proprietorship.
Textbook Chapters: 6 & 7
I.
II.
III.
IV.
V.
VI.
A fiscal period is the specific length of time covered by the financial reports of a business. For
example, an annual report covers a fiscal period of one year, but a quarterly report includes
accounting data for three months. At the end of the fiscal period, the financial information of the
business is summarized and reported.
A worksheet is a columnar accounting form that is used to summarize the general ledger
information needed to prepare the financial statements for a business. A worksheet is used to:
A. Summarize general ledger account balances to prove debits equal credits.
B. Plan changes to bring the general ledger accounts up to date.
C. Separate the general ledger account balances in order to prepare the financial statements.
D. Calculate net income or net loss.
An income statement reports net income or net loss over a defined period of time. It is
prepared from the Income Statement section on the worksheet and provides information needed
to make good business decisions.
A balance sheet summarizes what a business owns, what a business owes, and the current net
worth on a specific date. It is prepared from the Balance Sheet section on the worksheet.
The GAAP Matching Principle is one of the fundamental guidelines established by the
Financial Accounting Standards Board and states that each expense item related to revenue
earned must be recorded in the same accounting period as the revenue it helped to earn.
(GAAP = Generally Accepted Accounting Principles)
Procedures for Preparing a Worksheet
A. Enter the heading of the worksheet.
1. Write the company name on the first line.
2. Write the name of the document being prepared on the second line.
3. Write the date of the document, For the Month Ended July 31, 20--, on the third line.
B. Prepare the Trial Balance section of the worksheet.
1. Write the general ledger account titles in the Account Title column.
2. Write the general ledger debit balances in the Debit column and the general ledger credit
balances in the Credit column.
3. Rule a single line across the two Trial Balance columns below the last amounts. (A
single line drawn under a column means that the amounts above the line are ready to be
totaled.)
4. Add each column. If the two column totals are the same, then debits equal credits in the
general ledger accounts. If not, check and correct errors.
5. Write the total of each column below the single line.
6. Rule double lines across both Trial Balance columns. (Double lines mean that the totals
just above the ruling have been verified as correct and no other entries need to be
made.)
C. Prepare the adjustments in the Adjustments section of the worksheet.
(Only those
using SW Books)
1. Write the debit amount in the Adjustments Debit column and the credit amount in the
Adjustments Credit column. The adjustment amount equals the ending balance in the
account minus the amount on hand at the end of the fiscal period.
2. Rule a single line across the two Adjustments columns on the same line as the single
line for the Trial Balance columns.
3. Add both Adjustments columns. If the two amounts are the same, then debits equal
credits. If not, check and correct errors.
II.
4. Rule double lines across both Adjustments columns to show that the totals have been
verified as correct.
D. Extend the balance sheet account balances to the Balance Sheet section on the worksheet.
(Note: Those using the SW books will have to update their accounts with the adjustments.)
E. Extend the income statement account balances to the Income Statement section on the
worksheet. (Note: Those using the SW books will have to update their accounts with the
adjustments.)
F. Calculate and record net income or net loss on the worksheet.
G. Total and rule the worksheet.
1. Rule a single line across the four Income Statement and Balance Sheet columns.
2. Add each of the Income Statement and Balance Sheet columns and write the totals
below the single line.
3. Calculate net income or net loss by subtracting the Income Statement Debit column from
the Income Statement Credit column. Note: If Sales (total revenues) are greater than
Expenses, the company has net income. If Sales (total revenues) are less than
Expenses, the company has a net loss. Write the words Net Income or Net loss in the
Account Title column on the same line as the amount calculated. If the company has net
income, record the amount under the Income Statement Debit column. If the company
has a net loss, record the amount under the Income Statement Credit column.
4. Rule a single line across the four Income Statement and Balance Sheet columns just
below the net income or net loss amount.
5. If a net income was calculated, then the amount of net income is written under the
subtotal in the Balance Sheet Credit column. If a net loss was calculated, then the
amount of net loss is written under the subtotal in the Balance Sheet Debit column.
6. Rule a single line under the net income or net loss amount across all four Income
Statement and Balance Sheet columns.
7. Add the subtotal and net income (or net loss) for each column to get proving totals for
the Income Statement and Balance Sheet columns. Write the totals below the single
line. Check for equality in each pair of columns.
8. Rule double lines across the Income Statement and Balance Sheet columns.
Procedures for Preparing an Income Statement
A. Enter the heading of the income statement.
1. Center the name of the company on the first line.
2. Center the name of the report on the second line.
3. Center the date of the report, For the Month Ended, July 31, 20--, on the third line.
B. Prepare the Revenue, Expenses, and Net Income sections.
1. Write the name of the first section, Revenue, at the left of the wide column on the first
line.
2. Write the title of the revenue account, Sales, on the next line, indented from the margin.
3. Record the balance of the Sales account on the same line in the second amount column.
4. Write the name of the second section, Expenses, at the left of the wide column on the
next line.
5. Write the title of each expense account in the wide column, indented from the margin.
6. Write the balance of each expense account in the first amount column on the same line
as the account title.
7. Rule a single line across the first amount column under the last expense account
balance to indicate addition.
8. Write the words Total Expenses on the next blank line indented from the margin in the
wide column.
9. Record the amount of total expenses on the same line in the second amount column.
III.
10. Calculate and verify the amount of net income or net loss.
a. Calculate net income or net loss by subtracting total expenses from total revenue. (If
expenses are greater than sales then there is a net loss.)
b. Compare the amount of net income (or loss) with the net income (or loss) amount on
the worksheet. If the amounts are not the same, an error has been made and must
be corrected.
11. Rule a single line across the second amount column just below the total expenses.
12. Write the words Net Income (or Net Loss) on the next line at the left margin of the wide
column.
13. On the same line, record the amount of net income (or net loss) in the second amount
column.
14. Rule double lines across both amount columns below the amount of net income to show
that the amount has been verified as correct.
C. Calculate the component percentages – the percentage relations between one financial
statement item and the total that includes that item.
1. Total Expense Component Percentage = Total Expenses ÷ Total Sales
2. Net Income Component Percentage = Net Income ÷ Total Sales
Procedures for Preparing a Balance Sheet
A. Enter the heading of the balance sheet.
1. Center the name of the company on the first line.
2. Center the name of the report on the second line.
3. Center the date of the report, July 31, 20--, on the third line.
B. Prepare the Assets and Liabilities sections of the balance sheet.
1. Write the title of the first section, Assets, in the middle of the left wide column.
2. Write the title of all asset accounts under the heading.
3. Record the balance of each asset account in the left amount column on the same line as
the account title.
4. Write the title of the next section, Liabilities, in the middle of the right wide column.
5. Write the titles of all liability accounts under the heading.
6. Record the balance of each liability account in the right amount column on the same line
as the account title.
7. Rule a single line across the right amount column under the last amount to indicate
addition.
8. Write the words Total Liabilities in the right wide column on the next blank line.
9. Record the total of all liabilities in the right amount column.
C. Prepare the Owner’s Equity section of the balance sheet.
1. Write the title of the section, Owner’s Equity, in the middle of the right wide column on
the next line below Total Liabilities.
2. Write the title of the owner’s capital account on the next line.
3. Record the current amount of owner’s equity in the right amount column.
a. Current Capital = Capital account balance plus Net Income minus Drawing account
balance
b. Current Capital = Capital account balance minus Net Loss minus Drawing account
balance
4. Rule a single line under the last amount in the longer left amount column.
5. Rule a single line in the right amount column on the same line.
6. Write the words Total Assets on the next line in the left wide column.
7. Record the amount of total assets in the left amount column.
8. Write the words Total Liabilities and Owner’s Equity in the right wide column on the same
line as Total Assets.
9. Record the amount of total liabilities and owner’s equity in the right amount column.
10. Compare the totals of the two amount columns. The total should be in balance – assets
should equal liabilities plus owner's equity.
11. Rule double lines across both the left and right amount columns just below the column
totals to show that the totals have been verified as correct.
KEY TERMS
Fiscal period
Worksheet
Trial balance
Adjustments
Balance sheet
Income statement
Net income
Net loss
Matching Principle
Ruling
2.02--Sample Questions
1.
If the beginning supplies balance is
$2,200, and the ending supplies balance is
$700, the correct adjustment on the work sheet
is to debit:
A.
Supplies and credit Supplies
Expense $700.
B.
Supplies and credit Supplies
Expense $1,500.
C.
Supplies Expense and credit
Supplies $700.
D.
Supplies Expense and credit
Supplies $1,500.
2.
If the beginning prepaid insurance
balance is $2,000, and the ending value of the
insurance is $800, the correct adjustment on
the work sheet is to debit:
A.
Insurance Expense and credit
Prepaid Insurance $1,200.
B.
Insurance Expense and credit
Prepaid Insurance $800.
C.
Prepaid Insurance and credit
Insurance Expense $1,200.
D.
Prepaid Insurance and credit
Insurance Expense $800.
3.
If the beginning prepaid insurance
balance is $3,400, and the ending value of the
insurance is $1,200, the correct adjustment on
the work sheet is to debit:
A.
Insurance Expense and credit
Prepaid Insurance $1,200.
B.
Insurance Expense and credit
Prepaid Insurance $2,200.
C.
Prepaid Insurance and credit
Insurance Expense $1,200.
D.
Prepaid Insurance and credit
Insurance Expense $2,200.
Jackson Company has Sales of $7,500. The
company has the following expenses:
Advertising Expense - $1,300
Insurance Expense - $850
Rent Expense - $900
Supplies Expense - $250
Utilities Expense - $175
4.
What is the component percentage for
Total Expenses?
A.
36.6%
B.
20.9%
C. 46.3%
D. 51.3%
Jackson Company has Sales of $7,500. The
company has the following expenses:
Advertising Expense - $1,300
Insurance Expense - $850
Rent Expense - $900
Supplies Expense - $250
Utilities Expense - $175
5.
What is the component percentage for
Utilities Expense?
A.
2%
B.
2.5%
C. 2.3%
D. 16%
C.
D.
Net income of $1,350.
Net loss of $1,350.
6.
Mary is preparing a Balance Sheet.
When she completes the Owner's Equity
Section, what should the end result be?
A.
The Total Assets are greater than
the Total Liabilities.
B.
The Total Assets are less than
the Owner's Equity.
C.
The Total Assets should equal
Total Liabilities plus Owner's Equity.
D.
The Total Assets plus Total
Liabilities equal Owner's Equity.
10.
When preparing an Income Statement,
after all account total debits and credits are
entered correctly, verified and totaled, what is
the next step?
A.
Add each column to verify that
debits equal credits.
B.
Write each column's total below
the single line.
C.
Double rule across both amount
columns.
D.
Single rule across both amount
columns below the last amounts.
7.
John is preparing an Income Statement.
He has written the titles of each expense
account in the Expenses Section. What should
John do NEXT?
A.
Record the balance of the
revenue account.
B.
Write the balance of each
expense account.
C.
Calculate the net income or net
loss.
D.
Double rule across both amount
columns.
11.
If the beginning supplies balance is
$1,800, and the ending supplies balance is
$300, the correct adjustment on the work sheet
is to debit:
A.
Supplies and credit Supplies
Expense $500.
B.
Supplies and credit Supplies
Expense $1,000.
C.
Supplies Expense and credit
Supplies $500.
D.
Supplies Expense and credit
Supplies $1,500.
8.
Samuel was asked to prepare a
financial statement to determine whether or not
the costs of doing business exceeded the
revenue during the past year. What is the
LAST Samuel will do in preparing this
statement?
A.
Write the name of the company.
B.
Prepare the Revenue Section.
C.
Calculate the net income or net
loss.
D.
Calculate the component
percentages.
12.
Mary is preparing a Balance Sheet.
What must she do after she completes the
heading information?
A.
Prepare the Asset section.
B.
Write the titles of all the liability
accounts.
C.
Prepare the Owner's Equity
section.
D.
Double rule across the left and
right columns.
9.
The ABC Manufacturing Company's
Income Statement worksheet shows total
debits of $600 and total credits of $750. ABC
Manufacturing Company has a:
A.
Net loss of $150.
B.
Net income of $150.
13.
Sam is preparing an Income Statement
from the Work Sheet in Group Material 2.02 C.
What is the component percentage for Total
Expenses?
A.
33.3%
B.
60 %
C.
66.7%
D.
100%
2.03-Apply accounting procedures to prepare end of period adjusting and
closing entries.
Textbook Chapters: 8
I.
II.
III.
IV.
V.
VI.
II.
III.
Adjusting entries are journal entries recorded to update general ledger accounts at the end of
the fiscal period. Adjusting entries are recorded on the next page following the last daily
transaction for the month.
Closing entries are journal entries that prepare temporary accounts for a new fiscal period.
A. Temporary accounts are used to accumulate information until it is transferred to the
owner’s capital account. They include revenue, expense, owner’s drawing account, and the
income summary account.
B. Temporary accounts show the changes to the owner’s capital account during a fiscal period.
C. At the end of the fiscal period, temporary accounts are summarized, balances are
transferred to the owner’s capital account, and the accounts then have zero balances.
Permanent accounts are used to accumulate information from one fiscal period to another.
A. They include assets, liabilities, and owner’s equity accounts.
B. The ending account balances for the permanent accounts become the opening balances for
the next fiscal period.
The Income Summary account is used to accumulate and summarize the closing entries for
the revenue and expense accounts for a fiscal period.
A. There is no normal balance side to the Income Summary account. The balance side is
determined after the amounts from the income and expense accounts are posted.
B. If revenue is greater than expenses, the Income Summary account will have a credit
balance, reflecting net income.
C. If expenses are greater than revenue, the Income Summary account will have a debit
balance, reflecting net loss.
To ensure that debits equal credits after closing entries are posted, a Post-Closing Trial
Balance is prepared. Only the accounts that have a balance, which include assets, liabilities,
and owner’s equity, or the permanent accounts, are recorded on a Post-Closing Trial Balance.
Procedure for Preparing End of Period Adjusting Entries
A. Write the heading, Adjusting Entries, in the middle of the Account Title column of the journal.
(There are no source documents; therefore, the heading is written only once for all adjusting
entries.)
B. Write the date in the Date column.
C. Write the title of the account debited in the Account Title column.
D. Record the debit amount in the General Debit column on the same line as the title.
E. Write the title of the account credited in the Account Title column.
F. Record the credit amount in the General Credit column on the same line as the title.
Procedure for Preparing End of Period Closing Entries
A. Journalize an entry to close income statement accounts that have a credit balance.
B. Journalize an entry to close income statement accounts that have a debit balance.
C. Journalize an entry to transfer net income or net loss to the owner’s capital account and
close the income summary account.
D. Journalize an entry to close the owner’s drawing account.
Procedure for Preparing a Post-Closing Trial Balance
A. Write the heading “Post-Closing Trial Balance” in the heading Section.
B. Write the account titles of all general ledger accounts that have balances in the Account
Title column.
C. Write the account balance in the appropriate amount column – Debit or Credit.
D. Rule a single line below the last amount in each column.
E. Write the word Totals on the line below the last account title.
F. Write the column totals on the line below the rule. The two totals should be the same;
debits = credits.
G. Rule with double lines below the totals indicating the totals are verified as correct.
KEY TERMS
Adjusting entries
Permanent accounts
Temporary accounts
Income summary accounts
Closing entries
Post-closing trial balance
Accounting cycle
2.03--Sample Questions
1.
Mary is closing the income summary
account. Her company had a net loss of
$2,000. The correct journal entry is to debit:
A.
Drawing, and credit Income
Summary, $2,000.
B.
Owner's equity, and credit
Income Summary, $2,000.
C.
Sales, and credit Income
Summary, $2,000.
D.
Income Summary, and credit
Drawing, $2,000.
2.
When closing the Miscellaneous
Expense account, debit:
A.
Owner's Equity and credit
Miscellaneous Expense
B.
Miscellaneous Expense and
credit Owner's Equity.
C.
Miscellaneous Expense and
credit Income Summary.
D.
Income Summary and credit
Miscellaneous Expense
3.
Adam is preparing the Post-Closing Trial
Balance. He has recorded all the account
balances in the correct column. What will he do
NEXT?
A.
Rule a single line below the last
amount in each column
B.
Write the account balance in
either the debit or credit column
C.
Write the account titles of all
general ledger accounts that have
balances in the Account Title column
D.
Write the heading
4.
Mary is preparing the closing entries for
her company. After she has closed the Income
Summary account, what will she do NEXT?
A.
Journalize an entry to transfer net
income or net loss to the owner's capital
account and close the income summary
account
B.
Journalize an entry to close the
owner's drawing account
C.
Journalize an entry to close
income statement accounts that have a
debit balance
D.
Journalize an entry to close
income statement accounts that have a
credit balance
5.
The Sales account has a balance of
$3,875. To close the Sales account, debit:
A.
Sales $3,875 and credit Income
Summary $3,875.
B.
Income Summary $3,875 and
credit Sales $3,875.
C.
Sales $3,875 and credit Owner's
Equity $3,875.
D.
Owner's Equity $3,875 and credit
Sales $3,875.
6.
Steve is preparing the Post-Closing Trial
Balance. After he has written "Post Closing
Trial Balance" in the heading section, what will
he do NEXT?
A.
Rule a single line below the last
amount in each column
B.
Write the account balance in
either the debit or credit column
C.
Write the account titles of all
general ledger accounts that have
balances in the Account Title column
D.
Write the account totals
7.
On the last day of April, Jack prepared
the adjusting entries for his company. He has
written "Adjusting Entries" in the Account Title
column and recorded April 30 in the date
column. What will Jack do NEXT?
A.
Record the credit amount in the
General Credit column
B.
Record the debit amount in the
General Debit column
C.
Write the title of the account
credited in the Account Title column
D.
Write the title of the account
debited in the Account Title column
8.
The owner's drawing account has a
balance of $275. The correct entry to close the
drawing account would be to debit:
A.
Drawing, credit owner's equity
account for $275.
B.
Drawing, credit Income Summary
for $275.
C.
Owner's equity account, credit
drawing account for $275.
D.
Income summary, credit drawing
account for $275.
9.
The beginning Prepaid Insurance
balance is $3,700 and the ending Prepaid
Insurance balance is $2,200. The correct
adjusting entry will be to debit:
A.
Prepaid Insurance and credit
Insurance Expense $1,500.
B.
Insurance Expense and credit
Prepaid Insurance $1,500.
C.
Prepaid Insurance and credit
Insurance Expense $3,700.
D.
Insurance Expense and credit
Prepaid Insurance $3,700.
10.
Michael is preparing the closing entries
for his company. He has closed all the income
statement accounts that have a credit balance.
What is the NEXT step that he will perform?
A.
Journalize an entry to transfer net
income or net loss to the owner's capital
account and close the Income Summary
account
B.
Journalize an entry to close the
owner's drawing account
C.
Journalize an entry to close
income statement accounts that have a
debit balance
D.
Journalize an entry to close
income statement accounts that have a
credit balance
11.
When closing the Advertising Expense
account, debit:
A.
Owner's Equity and credit
Advertising Expense
B.
Advertising Expense and
credit Income Summary.
C.
Income Summary and credit
Advertising Expense
D.
Advertising Expense and credit
Owner's Equity.
12.
In preparing adjustment entries for his
company, Steve has written "Insurance
Expense" in the Account Title column. What
will he do NEXT?
A.
Record the debit amount in the
General Debit column
B.
Record the credit amount in the
General Credit column
C.
Write the title of the account
debited in the Account Title column
D.
Write the title of the account
credited in the Account Title column
13.
The beginning supplies balance is
$2,300 and the ending supplies balance is
$2,200. The correct adjusting entry will be to
debit:
A.
Supplies and credit Supplies
Expense $100.
B.
Supplies and credit Supplies
Expense $2,300.
C.
Supplies Expense and credit
Supplies $100.
D.
Supplies Expense and credit
Supplies $2,300
.
2.00 Sample Questions Key
2.01
2.02
2.03
1. C
2. C
3. B
4. B
5. D
6. D
7. D
8. C
9. D
10. D
11. B
1. D
2. A
3. B
4. C
5. C
6. C
7. B
8. D
9. B
10. C
11. D
12. A
1. B
2. D
3. A
4. B
5. A
6. C
7. D
8. C
9. B
10. C
11. C
12. A
13. C
13. C