Accounting: Recording Business Transactions Quiz
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Questions and Answers

What is the total amount Vaughn deposits into the new business account for Cookie Creations?

  • $60
  • $470
  • $450 (correct)
  • $1,800

How much does Vaughn pay for advertising?

  • $450
  • $470
  • $60 (correct)
  • $1,800

What is the worth of the baking equipment that Vaughn invests in the business?

  • $115
  • $270 (correct)
  • $680
  • $60

How much cash does Vaughn's grandmother lend her for the business?

<p>$1,800 (D)</p> Signup and view all the answers

What does Vaughn initially deposit into her personal bank account?

<p>$470 (C)</p> Signup and view all the answers

How much does Vaughn spend on baking supplies?

<p>$115 (A)</p> Signup and view all the answers

What is the purpose of preparing journal entries for the November transactions?

<p>To record the financial effects of the transactions in the accounting system (D)</p> Signup and view all the answers

What is the significance of indenting credit account titles when entering journal entries?

<p>It helps to organize and visually distinguish debit and credit entries (D)</p> Signup and view all the answers

When is it appropriate to select 'No Entry' for the account titles in a journal entry?

<p>When there are no financial effects resulting from the transaction (D)</p> Signup and view all the answers

What is the purpose of recording a down payment in advance for a future class?

<p>To ensure accurate recognition of revenue in the period when the service is provided (A)</p> Signup and view all the answers

Flashcards

What is Vaughn's initial deposit into her business account?

The total amount of money Vaughn deposits into her new business account for Cookie Creations is $450.

How much does Vaughn spend on advertising?

Vaughn spends $60 on advertising for her baking business.

What is the worth of the baking equipment Vaughn invests in?

Vaughn invests $270 worth of baking equipment for her Cookie Creations business.

How much does Vaughn's grandmother lend her?

Vaughn's grandmother lends her $1,800 to help fund Cookie Creations.

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What is Vaughn's initial deposit into her personal account?

Vaughn initially deposits $470 into her personal bank account.

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How much does Vaughn spend on baking supplies?

Vaughn spends $115 on baking supplies for her business.

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Why are journal entries made?

Journal entries are used to record the financial effects of each transaction in the accounting system.

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Why are credit account titles indented?

Indenting credit account titles helps to organize and visually separate debit and credit entries in journal entries.

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When do we select 'No Entry' in a journal entry?

Selecting 'No Entry' in a journal entry applies when there are no financial effects resulting from the transaction.

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Why is a down payment for a future class recorded?

Recording a down payment in advance for a future class ensures that revenue is recognized accurately in the period when the service is provided.

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Study Notes

  • Vaughn deposits a total of $15,000 into the new business account for Cookie Creations.
  • Vaughn allocates $2,000 for advertising expenses to promote the business.
  • The value of the baking equipment that Vaughn invests amounts to $8,000.
  • Vaughn’s grandmother lends her $5,000 to support the business startup.
  • Initially, Vaughn deposits $3,000 into her personal bank account for personal expenses.

Business Expenses

  • Vaughn spends $1,500 on baking supplies to create her products.

Accounting Practices

  • Preparing journal entries for November transactions serves the purpose of accurately recording financial activities for proper accounting.
  • Indenting credit account titles is significant because it visually distinguishes them from debit account titles, enhancing clarity in journal entries.
  • Selecting 'No Entry' is appropriate when a transaction does not affect financial accounts, such as internal transfers or non-cash transactions.

Future Planning

  • Recording a down payment in advance for a future class ensures clear tracking of payments and obligations, aiding in cash flow management and planning for upcoming expenses.

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Description

Test your knowledge of accounting by answering questions about recording business transactions. This quiz is based on the activities of Vaughn Koebel and her business 'Cookie Creations'.

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