The basic purpose of a trial balance is to list all of the accounts in the gener
ID: 2577923 • Letter: T
Question
The basic purpose of a trial balance is to
list all of the accounts in the general ledger
list all of the accounts in the general ledger that have a balance
be sure that all journal entries have been recorded
verify that the total credits equal the total debits
3.5 points
QUESTION 2
A sale on account would be recorded a journal entry by:
Debiting revenue.
Crediting liabilities.
Crediting assets.
Debiting accounts receivable.
3.5 points
QUESTION 3
On Jan. 1st, 2016, Phoenix Corp. paid $3,000 for 3 months of insurance coverage. Phoenix Corp. uses an accounting period of one month.
Please 1). make a journal entry to record the payment on Jan. 1st, 2016, and
2). make an adjusting journal entry required at Jan. 31st, 2016.
Path: p
Words:0
8 points
QUESTION 4
On August 1, 2018, Rocket Retailers adopted a plan to discontinue its catalog sales division, which qualifies as a separate component of the business according to GAAP regarding discontinued operations. The disposal of the division was expected to be concluded by June 30, 2019. On January 31, 2019, Rocket's fiscal year-end, the following information relative to the discontinued division was accumulated:
Operating loss Feb. 1, 2018–Jan. 31, 2019: $115,000
Estimated operating losses, Feb. 1–June 30, 2019: 80,000
Impairment of division assets at Jan. 31, 2019: 10,000
In its income statement for the year ended January 31, 2019, Rocket would report a before-tax loss on discontinued operations of:
$(65,000)
$(195,000)
$(125,000)
$(115,000)
3.5 points
QUESTION 5
Fundamental qualitative characteristics of accounting information are:
Relevance and comparability.
Comparability and consistency.
Faithful representation and relevance.
Neutrality and consistency.
3.5 points
QUESTION 6
In terms of debits and credits, which types of accounts will have the same (debit or credit) normal balances?
dividends, expenses, assets
assets, capital stock, revenues
retained earnings, dividends, liabilities
expenses, liabilities, capital stock
3.5 points
QUESTION 7
Jet Set Leasing received $6,000 for 12 months rent in advance. How should Jet Set Leasing record this transaction?
Dr. Prepaid rent $6000
Cr. Cash $6000
Dr. Prepaid rent $6000
Cr. Rent revenue $6000
Dr. Rent revenue $6000
Cr. Unearned rent revenue $6000
Dr. Cash $6000
Cr. Unearned rent revenue $6000
3.5 points
QUESTION 8
Which of the following items would not be included as a cash flow from operating activities in a statement of cash flows for a retail company?
Payment of income taxes
Collection of interest on a note
Purchase of inventory
Purchase of land
3.5 points
QUESTION 9
On Feb. 1st, 2015, Phoenix Corp. borrowed $200,000 at a rate of 9% per year. Interest is due on the first day of each month. Phoenix Corp. uses an accounting period of one month.
Please 1). make a journal entry to record the payment on Feb. 1st,2015 and
2). make an adjusting journal entry required at Feb. 28th, 2015.
Path: p
Words:0
8 points
QUESTION 10
On Nov. 1st, 2015, Phoenix Corp. received $24,000 from Arcadia High School for 3 months rent in advance. Phoenix Corp. uses an accounting period of one month.
Please 1). make a journal entry to record the payment on November. 1st,2015, and
2). make an adjusting journal entry required at November. 30th, 2015.
Path: p
Words:0
8 points
QUESTION 11
During 2016, Tony Romo decided to review Jessica Simpson’s financial statement to control her high expenditures in Mexico. The Jessica Simpson company reports an increase of $20,000 in assets and increase of $10,000 in liabilities. What is the change in her owners’ equity?
$10,000 increase.
$10,000 decrease.
$30,000 increase.
$30,000 decrease.
3.5 points
QUESTION 12
The distinction between operating and nonoperating income relates to:
continuity of income.
primary activities of the reporting entity.
consistency of income stream.
reliability of measurements.
3.5 points
QUESTION 13
Making and collecting loans and disposing of property, plant, and equipment are:
Investing activities.
Financing activities.
Operating activities.
Liquidity activities.
list all of the accounts in the general ledger
list all of the accounts in the general ledger that have a balance
be sure that all journal entries have been recorded
verify that the total credits equal the total debits
Explanation / Answer
1. The basic purpose of a trial balance is to: verify that the total credits equal the total debits.
Trial balance is prepared to check the arithmatical accuracy of all the ledgers. If the sum of debit balance equals to the sum credit balances that shows the arithmatical accuracy of the ledger balances made.
2. A sale on account would be recorded a journal entry by: Debiting accounts receivable.
Journal entry for sales on account -
Accounts receivable a/c Dr. $xxx
Sales a/c Cr. $xxx
3. Journal Entries
01.01.2016
Prepaid Insurance A/c Dr. $3000
Cash A/c Cr. $3000
(Insurance coverage for 3 months)
31.01.2016
Insurance exp A/c (3000/3) Dr. $1000
Prepaid Insurance A/c Cr. $1000
(Insurance exp for one month adjusted from prepaid insurance)
5. Accounting information provides mainly the following qualitative characteristics: Reliability,Relevance, Comparability & Consistency.
According to the options provided in the question its hard to choose any one.
6. Assets - Debit bal
Liabilities - Credit bal
Dividends - Debit balance
Capital stock - Credit bal
Revenues - Credit bal
Expenses - Debit bal
Retained earnings - credit bal
So, accounts having same type of normal balances are: dividends, expenses, assets
7. Jet Set Leasing received $6,000 for 12 months rent in advance.
Journal Entry
Dr. Cash A/c $6000
Cr. Unearned rent revenue A/c $6000
Cash is an assets, so having balance debit will be increased by inflow. And rent received for future period is unearned rent revenue having credit balance.
8. Payment of income taxes - Operational activity
Collection of interest on a note - Operational activity
Purchase of inventory - Operational activity
Purchase of land- Investing Activity
So, Purchase of land will not come into Operating activity in the cash flow items.
9. Journal Entries
Feb 01, 2015
Bank A/c Dr. $200,000
9% Loan A/c Cr. $200,000
( Loan taken on 9% interest per annum)
Feb 28, 2015
Interest on loan A/c [(200,000*9%)*1/12] Dr. $1500
Outstanding interest on loan A/c Cr. $1500
(Interest due on 28th feb @9% on $200,000)
10. Journal Entries
Nov 01, 2015
Cash A/c Dr. $24,000
Unearned rent revenue A/c Cr. $24,000
(Rent for 3 months received in advance)
Nov 30, 2015
Unearned rent revenue A/c Dr. $8,000
Rent revenue (24000/3) Cr. $8,000
(Rent for the month of Nov adjusted from unearned rent revenue)
11. Increase in assets = $20,000
Less: Increase in Liabilities = $10,000
Net Increase in Owner's Equity = $10,000
12. Operating incomes are those incomes which are related to normal course of business function and recurring in nature.
Non operating incomes are not from ordinary course of business function and also may not be recurring in nature.
On these basis Operating and Non-Operating incomes are distinguished.
So, The distinction between operating and nonoperating income relates to: primary activities of the reporting entity. & consistency of income stream.
13. Making & collecting loans & disposing of property, plant, and equipment are of Investing Activities in nature.
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.