Questions and Answers
A check deposited to the bank for payment of an agent's bill (from the market center) is a _____ to 'Accounts Receivable- Agents'.
Credit (CR)
Recording depreciation affects the accounts below. Please select the appropriate debit (DR) and credit (CR):
Depreciation Expense = Debit (DR) Accumulated Depreciation = Credit (CR)
What happens to accumulated interest?
Goes up annually until you sell it
When the proceeds from a loan are received, the entry to 'notes payable' is a __________.
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A check deposited to the bank for payment of an agent's bill (from the market center) is a _____ to 'cash- operating account'.
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Items were returned to the vendor. The vendor issued a credit memo for $55 prior to the invoice being paid. The entry should be recorded as __________.
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Which of the following would be a Debit (DR) on the balance sheet?
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Which of the following would be a Credit (CR) on the balance sheet?
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When you receive the payment from the agent for the $40 copier invoice, the entry should be recorded as __________.
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Which of the following are NOT on the Income Statement?
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Which of the following would be a Debit (DR) on the Income Statement?
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Which of the following would be a credit on the Income Statement?
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A refund check issued to an agent for the amount he overpaid for his office rent is a ______ to 'other income- rent' and a _______ to 'cash- operating' account.
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Which of the following would be a Debit (DR) on the balance sheet?
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Which of the following would be a Credit (CR) on the balance sheet?
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Upon receipt of a vendor's invoice ($100) for the purchase of for sale signs, an entry should be made in ______________.
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Upon receipt of a vendor's invoice where office supplies were bought for $300, the initial entry would be recorded as __________.
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Which of the following would be a credit (CR) on the Income Statement?
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When issuing an invoice to an agent for $40 for copies, the entry should be recorded as __________.
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A $40 invoice to an agent for copies should be recorded in the __________.
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What is the Accounts Receivable Journal?
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What is the Purchase Journal?
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What is the Cash Receipts Journal?
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For the year, depreciation has been accrued for a total of $20,000. It is determined at year-end that the depreciation expense is actually $18,000. The adjusting entry to correct the accrual would be _____
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If using cash accounting principles, invoices would be recorded __________.
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Sales totaled $500,000, fixed expenses were $26,000, and variable expenses were 75% of sales. What is the net income before tax?
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'Accumulated depreciation' should be shown on the financial statement as _______.
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Bank statements should be reconciled by someone who does NOT do the ________.
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Bank reconciliation should be done ________.
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When an agent prepays their annual expenses on January 1st for $200, the following entry would be made:
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An agent prepaid their expenses for $200 on January 1. The agent then accrued $20 in copier expenses during the month. This should be recorded as:
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Study Notes
Accounting Entries and Concepts
- Credit to "Accounts Receivable- Agents" when a check is deposited for payment of an agent's bill.
- Recording depreciation involves debiting Depreciation Expense and crediting Accumulated Depreciation.
- Accumulated Interest increases annually until an asset is sold.
- Proceeds from a loan are recorded as a credit to "notes payable."
- Debit to "cash- operating account" when a check is deposited for payment of an agent's bill.
Returns and Vendor Transactions
- When items are returned to a vendor and a credit memo is issued, the entry is a debit to Accounts Payable and credit to Supplies.
- Prepaid Expense (like office lease) is recorded as a debit on the balance sheet.
- Common Stock is recognized as a credit on the balance sheet.
Income and Expense Recognition
- Receipt of payment from an agent for a copier invoice is recorded as a debit to Cash and a credit to Accounts Receivable.
- Cash and Notes Payable do not appear on the Income Statement.
- Insurance Expense shows as a debit on the Income Statement, while other income from Rent is a credit.
Refunds and Adjustments
- A refund to an agent for overpayment of rent is recorded as a debit to "other income- rent" and a credit to "cash- operating."
- Distribution/Dividend is a debit on the balance sheet; Accumulated Depreciation is a credit.
Purchase and Expense Journal Entries
- Upon receiving a vendor's invoice for a purchase, it should be recorded in Purchases.
- The entry for purchased office supplies would debit Supplies and credit Accounts Payable.
- Sales Commission Income appears as a credit on the Income Statement.
Invoicing and Receivables
- When issuing an invoice to an agent for services, record as a debit to Accounts Receivable and a credit to Other Income.
- Invoices for agents for copies must be recorded in the Accounts Receivable Journal.
Journal Types and Cash Accounting
- The Purchase Journal captures purchases from vendors.
- The Cash Receipts Journal is for transactions involving invoices, not cash.
- In cash accounting, invoices are only recorded when paid.
Financial Metrics and Reconciliation
- Total sales of $500,000 with $26,000 in fixed expenses and 75% variable expenses yield a net income before tax of $99,000.
- "Accumulated depreciation" is regarded as a contra-asset on financial statements.
- Bank statements should be reconciled monthly by someone not involved in making deposits.
Prepaid and Accrued Expenses
- Prepayment of expenses by an agent should be recorded as a debit to Cash and a credit to Prepaid Expense Liability.
- Accrued copier expenses of $20 by an agent should adjust the recorded liability and reflect as a credit to Other Income.
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Description
This quiz covers essential accounting entries and concepts, including transactions involving Accounts Receivable, Accounts Payable, and the recognition of income and expenses. Understand how to record depreciation, vendor transactions, and various financial events effectively.
